Metsä Board Annual Review 2024

Together with our customers and partners, we continuously develop solutions to replace fossil-based packaging materials and improve packaging recyclability.

Our goal is to achieve fossil-free production and products by 2030, supporting our customers in reaching their sustainability targets.

Metsä Board Annual review 2024

Contents

Business operations and value creation

This is Metsä Board 2

CEO’s review 4

Strategy and financial targets 6

Value creation 8

Financ ial de velopment

Key figures 10

Report of the Board of Directors 12

• Sustainability statement 20

General information 20

E – Environment 37

S – Social responsibility 70

G – Governance 89

Annexes to the Sustainability statement 96

Consolidated financial statements 98

Notes to the consolidated financial statements 102

Parent company financial statements 150

Notes to the parent company financial statements 153

The Board’s proposal to the Annual General Meeting for the distribution of funds 166

Auditor’s Report 167

Sustainability statement assurance report 171

Shares and shareholders 173

Ten years in figures 177

Taxes 178

Production capacities 179

Calculation of key ratios and comparable performance measures 181

Corpora te go vernance

Corporate governance statement 183

• Board of Directors of Metsä Board 190

• Corporate Management Team of Metsä Board 194

Remuneration report 196

Investor relations and investor information 201

Metsä Board Sustainability Review 2024 presents Metsä Board’s key sus- tainability objectives and achievements in 2024. The review will be available in March 2025.

1

High-quality and lightweight fresh fibre paperboards

We focus on high-quality and recyclable fresh fibre board made of renewable wood fibre, which is mainly used in consumer packaging and retail packaging solutions. Good availability of Northern European wood fibre and high self-sufficiency in pulp and energy enable the growth and development of our paperboard business.

Strong position in a growing market

We are a leading producer of folding boxboard and white kraftliners in Europe, and globally the biggest producer of coated white kraft- liners. In the USA, we are the largest supplier of folding boxboard. The global demand for paperboards is expected to grow at an annual rate of slightly over 4%. (Source: Smithers Information Ltd.).

Paperboards with low carbon footprint

Our products promote the circular economy and help our customers to reduce the use of plastic. Lightweight paperboards produced resource- efficiently with mainly fossil-free energy enable reduction of the carbon footprint of packaging.

Targeted investments for sustainable growth

Population growth, urbanisation and plastic replacement will increase the demand for fibre-based packaging materials in the long term. We respond to this demand with sustainable growth investments and innovative packaging solutions. With mill-specific investments we improve our competitiveness and accelerate our goal of fossil-free production and products by the end of 2030.

This is Metsä Board

We are part of Metsä Group

Metsä Group is largest purchaser of wood in Finland and responsible for Metsä Board’s wood procurement. As part of Metsä Group, we are committed to the principles of regenerative forestry . Our self-sufficiency in pulp is secured by our 24.9% ownership in Metsä Fibre, the global leading producer of market softwood pulp.

Metsä Group

The parent company Metsäliitto Cooperative is composed of more than 90,000 Finnish forest owners.

Sales

EUR 5.7 billion

Comparable operating result

EUR 203 million

Personnel

9,600

METSÄ SPRING    Innovation company

Metsäliitto Cooperative 100%

Wood Products

Metsä Wood

Metsäliitto Cooperative 50.1%

Itochu Corporation 25.0% Metsä Board 24.9%

Pulp and sawn timber

Metsä Fibre

Wood Supply and Forest Services

Ownership

Metsäliitto Cooperative 100%

Metsäliitto Cooperative 52% (69% of votes)

The company is listed on Nasdaq Helsinki

Paperboard

Metsä Board

Metsäliitto Cooperative 100%

Tissue and greaseproof papers

Metsä Tissue

EUR 0.6 billion

EUR 2.3 billion

1,700

1,500

Sales

EUR 2.4 billion

Personnel

700

EUR 1.9 billion

EUR 1.2 billion

2,300

2,500

Read more

Read more

2

Focus on profitability

In 2024, we continued implementing our strategy through investments and development projects. In the current challenging market situation, securing the competitiveness and profitability is increasingly important. We have a strong foundation based on top professionals, high-quality products, and a solid financial position.

occurred at Metsä Fibre’s Kemi bioproduct mill, shutting down the integrated mill’s pulp production for several weeks, which affected our linerboard production. Thanks to our organisation’s profes- sional action and cooperation with Metsä Group mills, we restarted linerboard production faster than expected and minimised the negative impact on our customers.

Our financial position remains solid, although the ratio of net debt to comparable EBITDA rose to 2.0. However, this was mainly due to weaker profitability. The Board of Directors proposes that we pay a dividend of EUR 0.07 per share for 2024, which corre- sponds to 98% of our net result.

Investments targeted at sustainable growth

In 2023, we completed two significant investments in Husum and Kemi, which increased our annual paperboard capacity by 240,000 tonnes. This capacity is expected to be fully available to the market as of 2026. In 2024, we also decided not to invest in Kaskinen, where a pre-feasibility study was underway for a new folding boxboard mill with an annual capacity of 800,000 tonnes. Our decision was due to the high cost level, which clearly exceeded our original estimate and meant that the investment no longer met our financial targets. However, the pre-feasibility study results were useful for the investment programme we launched in 2024 to mod- ernise the Simpele board mill. We are also planning investments at our other mills to improve the competitiveness of our products and mills and achieve fossil-free production by the end of 2030.

Ensuring profitability and competitiveness is increasingly important

To secure profitability, we have adjusted our production to match weaker demand and have temporarily laid off some of our personnel. We have focused on the customer relationships that benefit most from the performance and added value offered by our premium paperboards. We have invested in the maintenance of our mills and made targeted investments to further improve our

Volatility in the market

The year 2024 started positively, as paperboard demand picked up from the previous year’s record low level. In the second half of the year, activity slowed down, and our total paperboard deliveries, roughly 1.5 million tonnes, remained below our capacity. Similar to the previous year, we adjusted our production at several mills to match low demand. Despite the slight increase in consumer purchasing power, demand for fresh fibre paperboards continued to be curbed by cautious purchasing behaviour and consumption focusing on services rather than products. The paperboard market has also been impacted by the strong growth in Asian paperboard capacity and increased paperboard imports, especially to Turkey, the Middle East and South America.

Volatility was also seen in the pulp market. In Europe, demand was clearly stronger in the first half of the year compared to the second half. In China, market pulp purchases were at a near standstill from summer to early autumn. The increase in softwood market pulp prices was not enough to compensate for the negative impact of low delivery volumes and high production costs, and this was also reflected in the profitability of our associated company, Metsä Fibre.

The second consecutive challenging year

In 2024, our sales were EUR 1.9 billion, and our comparable operat- ing result was EUR 69 million. Our return on capital employed was around 3%, compared to our target of at least 12%. In addition to muted sales, our profitability was negatively affected by high-cost level, for which we must continue to prepare. The price level of pulpwood, our main raw material, has nearly doubled over the last three years. The supply of northern pulpwood has decreased con- siderably due to the discontinuation of wood imports from Russia, while wood consumption has at the same time increased.

In 2024, unexpected events beyond our control also weighed on our results. In the first half of the year, political strikes in Finland stopped the transport of goods to our mills, and we had to halt production at nearly all our Finnish mills. In March, a gas explosion

4

Purpose

Advancing the bioeconomy and circular economy by efficiently processing northern wood into first-class products.

Strategic programmes

We have five strategic programmes. Each programme has objectives and concrete measures that contribute to our growth in fibre-based packaging materials and the renewal of our industrial operations.

Values

Reliability • Cooperation • Responsible profitability • Renewal

Our strategy highlights solutions that promote circular economy

Our competitiveness is based on premium products and services, as well as on the efficiency of our industrial operations. Our strategy emphasises packaging solutions that promote circular economy, replacing use of plastic. In 2024, we implemented our strategy and vision through a number of measures.

Vision

Preferred supplier of innovative and sustainable fibre-based packaging solutions, creating value for customers globally

Strategy

We grow in fibre-based packaging materials and renew our industrial operations.

STRATEGIC PROGRAMME

TARGET

MAIN ACTIONS IN 2024

Premium supplier

High-quality and reliable products and services with excellent customer experience

- Sale of Husum and Kemi’s new paperboard capacity

- Improving supply chain resilience

- Customer satisfaction, Net Promoter Score of 33

Effective innovation

Developing packaging solutions, lightweighting packaging and reducing plastic

- Customer workshops in Äänekoski, 49 workshops in total

- Improving quality of folding boxboard produced at Simpele mill

- Pre-engineering to improve performance of Kyro mill’s barrier boards

Safe and efficient operations and organic growth

Continuous improvement of occupational safety and opertional efficiency, growth investments

- Targeted programmes to improve occupational safety

- Implementation of Simpele mill investment plan and planning of future investments

Leader in sustainability

Fossil-free production and products by 2030

- Definition and prioritisation of planned investments to achieve taget of fossil-free production and products

- Renewed turbine of Kyro bioenergy plant

Motivated people

A diverse, equal and inclusive culture with well- being at work and continuous skills development

- Anonymous recruitment as main recruitment method

- Personnel survey combined with ethics barometer

- Metsä Group’s internal academy trainings

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Resources

Business model

People and partnerships

Around 2,300 employees in 17 countries

60 apprentices, around 270 summer employees, thesis workers and trainees

Active cooperation with local communities and educational institutions

Production and supply chain

Approximately 3,100 suppliers

8 production units in Finland and Sweden

Deliveries to around 90 countries

Natural resources

6.8 million m 3 of sourced wood of which 92% is certified

Total energy consumption 8.3 TWh of which 89% is fossil-free

Water withdrawals 106 million m 3

335,000 tonnes of purchased pigments, binders, other raw materials and packaging materials

Intangible assets

R&D expenditure EUR 7.4 million

An Excellence Centre in Äänekoski, Finland, and a satellite centre in Norwalk, the United States

Recognition for premium quality paperboards

Economic capital

Capital invested EUR 2.4 billion

Approximately 64,000 shareholders in B series and 11,000 in A series

We produce resource-efficient fresh fibre paperboards from

renewable raw materials, which support the principles of the

circular economy and offer an alternative to fossil-based packaging

materials. We are part of Metsä Group, and benefit from its unique

value chain, from pure northern fibre to premium end products. We

have high energy self-sufficiency, and our holding in our associated

company Metsä Fibre ensures our over self-sufficiency in pulp.

Our production is located in Finland and Sweden, and we have

sales around the world. Our main markets are Europe and North

America.

Other

4% (of sales)

Market pulp

14% (of sales)

Folding boxboard 57% (of sales)

Our sales in 2024 EUR 1,939 million

White kraftliners

25% (of sales)

We create value and well-being for several stakeholders

We are continuously looking for opportunities to grow profitably and sustainably, and to generate value for our stakeholders with our operations. We help our customers achieve their sustainability targets with our paperboards and our expert services that support the circular economy.

Reported figures are from 2024

8

600

500

400

300

200

100

0

400

300

200

100

0

-100

350

300

250

200

150

100

50

0

350

300

250

200

150

100

50

0

12

9

6

3

0

600

500

400

300

200

100

0

30

25

20

15

10

5

0

30

25

20

15

10

5

0

25

20

15

10

5

0

20

21

22

23

24

20

21

22

23

24

20

21

22

23

24

20

21

22

23

24

20

21

22

23

24

20

21

22

23

24

20

21

22

23

24

20

21

22

23

24

20

21

22

23

24

20

21

22

23

24

20

21

22

23

24

Key figures

SALES

EUR million

2,500

2,000

1,500

1,000

500

0

Paperboard deliveries

1,000 tonnes

Metsä Board’s market pulp deliveries 1)

1,000 tonnes

COMPARABLE EBITDA

EUR million, % of sales

Cash flow from operations

EUR million

COMPARABLE Operating result

EUR million, % of sales

Capital employed, EUR million

return on capital employed, %

INTEREST-BEARING NET DEBT, EUR million

INTEREST-BEARING Net debt / EBITDA, comparable

TOTAL INVESTMENTS

EUR million

TOTAL RECORDABLE INJURY FREQUENCY (TRIF)

per million hours worked

2,500

2,000

1,500

1,000

500

0

2.0

1.5

1.0

0.5

0

-0.5

Personnel at the end of perioD

2,500

2,000

1,500

1,000

500

0

2,000

1,500

1,000

500

0

600

500

400

300

200

100

0

1) includes chemical pulp and high-yield pulp (BCTMP)

Wood 20%

Pulp * 16%

Logistics 15%

Chemicals 15%

Energy 10%

Other variable 2%

Personnel 11%

Other fixed 10%

TOTAL COSTS 2024 EUR 1.7 billion

Development of key figures per share can be found on page 176.

*) Pulp: Metsä Board purchases all external pulp from its associated company Metsä Fibre, of which Metsä Board owns 24.9%. Metsä Fibre’s pulp cost structure in 2024: wood 57%, chemicals 11%, logistics 9%, energy 5%, personnel and other fixed 17%.

10

Report of the Board of Directors 2024

future investment and development needs into account. According to the previous dividend policy, Metsä Board aimed to distribute at least 50% of the result for the financial period in dividends every year. For 2024, the Board of Directors proposes a dividend of EUR 0.07 per share, correspond- ing to 98% of the result for the financial period. (2023: EUR 0.25 per share, 94% of the result)

Business environment

Paperboards

Population growth, urbanisation and replacing plastic are global trends that will increase demand for fibre-based packaging in the long term. Consumer preferences favour fossil-free packaging materials, and several brand owners are committed to ambitious targets to reduce plastic use in their packaging. Premium fresh fibre paperboards are lightweight and fully recyclable, making them a very suitable match for the EU’s more stringent regulation. The carbon footprint of material-efficient fresh fibre paper- boards mainly produced with fossil-free energy is also smaller than that of many other packaging materials.

In the first half of 2024, demand for paperboards picked up from the record-low level of 2023 caused by considerable inventory adjustments in the value chain. However, growth subsided towards the end of the year. Slowing inflation and decreasing interest rates have boosted consumers’ purchasing power to some extent, but consumers remain cautious in their purchase decisions. In addition, consumption focuses on products rather than services.

The folding boxboard market has been shaken by strong growth in Asian paperboard capacity and the resulting increase in paperboard imports, especially to the EMEA region and South America.

In 2024, European folding boxboard producers’ deliveries to Europe increased from the previous year. Meanwhile, the deliveries of white kraft- liners remained stable. The market prices of white kraftliners were stable, while those of folding boxboard declined from the previous year.

Metsä Board accounted for 32% (32) of the overall deliveries of Euro- pean folding boxboard producers and for 55% (50) of exports from Europe.

At the end of 2024, Metsä Board accounted for 38% of folding boxboard production capacity and for 33% of white kraftliner production capacity in Europe.

(Sources: Fastmarkets FOEX, Fastmarkets RISI, Pro Carton, Cepi Containerboard, websites of benchmark companies)

Market pulp

Metsä Board and its associated company Metsä Fibre sell mainly long-fibre market pulp to Europe and Asia.

Demand for market pulp in Europe was stronger in the first half of the year than in the second. In China, demand for market pulp was at the nor- mal level in early and late 2024, but at a near standstill from the summer to

Metsä Board’s business

Metsä Board produces recyclable premium fresh fibre paperboards and is Europe’s largest producer of folding boxboard and white kraftliners. The company’s folding boxboard is mainly used to package consumer products such as food and pharmaceuticals, while its white kraftliners are mainly used for various packaging needs in the retail sector. Metsä Board’s main market areas are Europe and North America.

The company also produces chemical pulp and bleached high-yield pulp (BCTMP), which are used in its own paperboard production, with some sold as market pulp. Metsä Board owns 24.9% of its associated company Metsä Fibre, a global leader in the production of long-fibre market pulp.

In 2024, Metsä Board’s total paperboard capacity was around 2.3 million tonnes, and its pulp and BCTMP capacity was 1.7 million tonnes.

The company covers its energy consumption with its own production and supplementary purchases from the market. Most of the electricity consumption is covered by the company’s own production and by electricity purchased from Pohjolan Voima and Metsä Fibre. Metsä Board has a 2.6% holding in Pohjolan Voima, from which it purchases electricity at cost price.

Strategy and financial targets

According to its strategy, Metsä Board aims to grow in fibre-based packaging materials and renew its industrial operations. The company implements its strategic programmes, including growth and development investments, to improve the mills’ production and resource efficiency and reduce the carbon footprint of products. Metsä Board’s production is located near the most important raw material, high-quality northern fibre. The company’s high self-sufficiency in pulp and energy offers a competitive advantage.

Metsä Board’s decision-making is guided by financial and sustainability targets. The company focuses on the continuous improvement of cost-effectiveness and on customer accounts which benefit from the high performance of the company’s products and services. The objective is to distribute a competitive dividend and retain a strong balance sheet.

Financial targets and dividend policy

Metsä Board aims for a comparable return on capital employed of at least 12%. In 2024, the realisation was 3.2% (2023: 5.1%)

Another target is for the ratio of interest-bearing net liabilities to comparable EBITDA (rolling 12 months) to be a maximum of 2.5. In 2024, the actual value was 2.0 (2023: 0.7).

In 2024, Metsä Board revised the company’s dividend policy. According to the new dividend policy, Metsä Board aims to distribute a dividend of at least half the result for the financial period over time, taking the company’s

12

Report of the Board of Directors

early autumn. In China, market pulp demand has been reduced by paper and paperboard producers’ production curtailments.

In 2024, the supply of long-fibre market pulp was restricted by the polit- ical strikes in Finland, Metsä Fibre’s planned and unplanned production shutdowns, global bottlenecks in logistics, and the capacity shutdowns carried out in 2023.

In Europe, the market price of long-fibre pulp (PIX) increased rapidly in the first half of 2024, declining slightly in the second half. In China, the price level of long-fibre pulp remained at nearly the same level as the previous year. The market prices of short-fibre pulp decreased sharply in the second half of the year in both China and Europe.

Sales and result

Metsä Board’s sales were EUR 1,938.6 million (1,941.9). Folding boxboard accounted for 57% (59) of sales, while 25% (24) of sales came from white kraftliner, 14% (13) from market pulp, and 4% (4) from other operations. By region, 67% (66) of sales came from EMEA, 27% (27) from Americas and 6% (7) from APAC.

Sales, EUR million

Comparable operating result, % of sales

Sales and COMPARABLE Operating result-%

3,000

2,500

2,000

1,500

1,000

500

0

EUR million

25

20

15

10

5

0

%

22

23

24

The comparable operating result was EUR 69.0 million (122.2), and the operating result was EUR 62.3 million (120.8). Items affecting compara- bility totalled EUR -6.7 million in the financial period. They comprised a write-down of EUR -7.6 million for the prefeasibility study of the Kaskinen folding boxboard mill, EUR -0.5 million for the sale of the discontinued sales company in Russia and EUR 1.4 million for items related to the business of the associated company Metsä Fibre.

Total paperboard deliveries were 1,472,000 (1,373,000) tonnes, of which 65% was delivered to the EMEA region, 31% to the Americas, and 4% to the APAC region. Metsä Board’s deliveries of market pulp were 400,000 (394,000) tonnes, of which 78% was delivered to the EMEA region, and 22% to the APAC region.

The gas explosion at Metsä Fibre’s Kemi bioproduct mill was estimated to have a negative impact of roughly EUR 40 million, and the political strikes in Finland were estimated to have a negative impact of roughly EUR 25 million, on Metsä Board’s comparable operating result in January– December. The comparable operating result for July–December includes EUR 30.5 million in insurance compensation received in relation to the gas explosion. All these figures include the impact from Metsä Fibre’s share of the result.

In January–December, the comparable operating result was weakened especially by the lower average price of folding boxboard. In turn, profita- bility improved due to higher paperboard delivery volumes. The average market pulp prices were higher than in the previous year.

Exchange rate fluctuations, including hedges, had a positive impact of approximately EUR 5 million on the result compared to the comparison period.

Chemicals and energy costs decreased, but wood costs increased. Logistics costs and fixed costs were higher than in the previous year.

Unused emissions allowances were sold for approximately EUR 35 million (55) in the financial period.

Depreciation increased due to the significant investments at the Husum and Kemi paperboard mills, which were completed in 2023.

The associated company Metsä Fibre’s share of Metsä Board’s com- parable result in January–December was EUR -10.2 million (28.2). Metsä Fibre’s comparable operating result was weakened by the gas explosion at the Kemi bioproduct mill and the political strikes in Finland. Profitability was also negatively affected by high wood costs and depreciation that increased from the previous year. Average market pulp prices increased but the average prices of other end products such as electricity and pulp production by-products decreased.

Financial income and expenses totalled EUR -10.8 million (0.1), including foreign exchange rate differences from trade receivables, trade payables, financial items and the valuation of currency hedging instruments, totalling EUR -2.8 million (2.6).

The result before taxes was EUR 51.4 million (120.9). The comparable result before taxes was EUR 58.2 million (122.6). Income taxes amounted to EUR -12.0 million (-19.3).

Earnings per share were EUR 0.07 (0.27), and comparable earnings per share were EUR 0.09 (0.27). The return on equity was 2.0% (4.7), and the comparable return on equity was 2.3% (4.8). The return on capital employed was 2.9% (5.0), and the comparable return on capital employed was 3.2% (5.1).

Cashflow

Net cash flow from operations in January–December 2024 was EUR 37.8 million (1–12/2023: 342.8). Working capital increased by EUR 96.3 million (a decrease of 105.8). Working capital increased due to higher production and sales volumes. Cash flow for the financial period includes a dividend of EUR 9.8 million from the associated company Metsä Fibre (EUR 82.8 million).

Balance sheet and financing

Metsä Board’s equity ratio at the end of the review period was 64% (31 December 2023: 67) and the net gearing ratio was 18% (7). The ratio of interest-bearing net liabilities to comparable EBITDA in the previous 12 months was 2.0 (0.7).

At the end of the financial period, interest-bearing liabilities totalled EUR 527.4 million (31 December 2023: 438.1). Non-euro-denominated loans accounted for 9.2 % of loans, and floating-rate loans for 40.9 %, the rest being fixed-rate loans. The average interest rate on liabilities was 2.7 %

14

Report of the Board of Directors | Metsä Board Annual review 2024

(2.6), and the average maturity of non-current liabilities was 2.2 years (3.1). The interest rate maturity of loans was 19.8 months (30.6).

Interest-bearing net liabilities totalled EUR 344.9 million (31 December 2023: 144.0).

The available liquidity was EUR 382.6 million (31 December 2023: 491.6), consisting of the following items: liquid assets and investments of EUR 182.6 million; and a syndicated credit facility (revolving credit facility) of EUR 200.0 million. Of the liquid assets, EUR 179.2 million consisted of short-term deposits with Metsä Group Treasury, and EUR 3.4 million consisted of cash funds and investments. In addition to items reported as liquidity, the liquidity reserve is complemented by Metsä Group’s internal short-term credit facility of EUR 150 million and a EUR 200 million commer- cial paper programme, of which EUR 30 million was issued at the end of the review period.

The fair value of other non-current investments was EUR 219.7 million (31 December 2023: 254.4). The change in value was related to the change in the fair value of Pohjolan Voima Oyj’s shares.

An average of 7.9 months of the net foreign currency exposure was hedged, including the hedging of the balance sheet position of trade receivables and trade payables.

Metsä Board has investment grade credit ratings from S&P Global and Moody’s Investor Service. Metsä Board’s rating by S&P Global is BBB-, with a stable outlook. The company’s rating by Moody’s is Baa2, with a stable outlook.

Investments

In 2024, overall investments totalled EUR 175.4 million (1–12/2023: 228.7), with growth and development investments accounting for 71%, and main- tenance investments for 29%. Of total investments, the company’s own property, plant and equipment amounted to EUR 163.8 million (223.0), and leased property, plant and equipment to EUR 11.6 million (5.7).

In 2023, two significant investments were completed at the Kemi and Husum paperboard mills, which will increase Metsä Board’s annual paperboard capacity by approximately 240,000 tonnes. The total value of the investments was EUR 340 million, divided across 2022–2024.

Metsä Board Group companies are parties to legal proceedings concern- ing disputes related to obligations and liabilities under delivery contracts for major investment projects. In addition, these investment projects involve outstanding disputes, which may also lead to the initiation of new arbitration or litigation.

Renewal of the Simpele paperboard mill

Metsä Board is renewing the folding boxboard machine at its Simpele mill to improve the quality of folding boxboard, increase production efficiency and enable the replacement of fossil fuels in paperboard production. The renewal will also increase the mill’s annual production capacity by around 10,000 tonnes. The value of the investment is approximately EUR 60 million. It will be spread across 2024–2026. The investment is expected to be completed in the second half of 2025.

Renewal of the Husum port concept

Due to the growing logistics volumes of the Husum integrated mill, the Husum port concept has been renewed. The value of the investment, mainly consisting of new warehouse capacity, was approximately EUR 20 million, and it was completed in 2024.

ERP investment

As part of Metsä Group, Metsä Board is modernising its ERP system. The investment will gradually improve Metsä Group’s operational efficiency and ability to create new data-driven functions in areas such as business management and customer support. Metsä Wood, Metsä Group’s wood products industry, successfully deployed the system in early 2025. Metsä Board’s share of the total value of the ERP investment is at least EUR 80 million, and the schedule for the system’s deployment will be specified during the first quarter of 2025.

Planned investments

Metsä Board is planning development investments at its current mills to further improve the competitiveness of its mills and products and support its target of fossil-free production by the end of 2030.

The following phases of the investment programme aimed at modern- ising the Simpele paperboard mill involve renewals to mechanical pulp production and paperboard finishing, as well as a new power plant. At the Kyro board mill, plans are being made to improve the performance of barrier boards and expanding end-use areas. The total cost of investments in the Simpele and Kyro paperboard mills is expected to be EUR 250 million in the next ten years. At the Husum pulp mill, plans are continuing for the renewal of the drying machine and the fibre line.

At the Husum integrated mill in Sweden, a programme is underway to introduce new products on the current white kraftliner production line (BM 2). The goal is to find innovative solutions for the growing food and food service packaging segment.

Metsä Board will regularly report on the progress of the investments in its interim reports and in separate releases if required.

R&D activities

In the circular economy for fibre-based packaging material, Metsä Board’s task is to provide markets with premium fresh fibre paperboards as resource efficiently as possible, help replace fossil-based materials and reduce the carbon footprint of packaging. Ensuring and developing the recyclability and compostability of paperboards is of key importance

Reducing the weight of paperboard is one of the focal areas of Metsä Board’s product development. Apart from the use of fossil free energy in production, the light weight of paperboard plays a significant role in reduc- ing the carbon footprint. In 2024, a carbon footprint report comparing dif- ferent paperboard grades in medical packaging, validated by a third party, was published, according to which, Metsä Board’s paperboards enabled a carbon footprint considerably smaller than that of grades representative of European paperboards on average.

The development of bio-based barrier coating for end uses in food packaging is another focal area in product development. At the Kyro board

15

Report of the Board of Directors | Metsä Board Annual review 2024

Any other potential changes in the industrial and trade policies of leading industrialised countries, the materialisation of geopolitical risks or an esca- lation of geopolitical risks may lead to more extensive measures restricting trade or the use of international sanctions. The possible consequences of these include a further slowdown in the recovery and growth of the global economy, and even a curtailment of global trade flows. Any sanctions and restrictions on international trade may affect the demand for Metsä Board’s products and the company’s profitability.

Pulp price risk

Metsä Board is more than self-sufficient in pulp through its 24.9% holding in Metsä Fibre. The market price of pulp strengthening (weakening) by 10% would have a positive (negative) impact of roughly EUR 50 million on Metsä Board’s operating result. This sensitivity includes the impact on the holding in Metsä Fibre. In the global pulp market, structural changes in customers’ pulp use, increasing competition and new production capacity may have a negative impact on the demand and price trend of market pulp.

Impact of the Chinese economy

China is an important market area especially for Metsä Board’s associated company Metsä Fibre, as nearly half its market pulp is sold to China. Chi- nese economic growth has slowed down due to challenges in the country’s real estate market and tight corporate regulation. Domestic consumer demand is also weak, and central government’s recovery measures have not halted the slowdown in growth. In addition, demographic factors and increasing geopolitical tension, especially between China and the US, may affect China’s future economic development. Should relations between the EU and China deteriorate, or the Chinese economy and consumer demand slow down further, these may have a negative impact on the demand for market pulp or paperboards on the Chinese market. Problems in China’s industrial sector may increase the problems and costs of global delivery chains.

Sustainability

Sustainability-related risks and their impacts on the company are sepa- rately discussed in this report’s Sustainability statement.

Operational risks

Cost and availability risks of raw materials

Significant or unforeseen changes in the prices of Metsä Board’s most important raw materials – wood, energy and chemicals – and any problems with their availability, may reduce profitability, threaten business continuity, and put the implementation and profitability of planned development investments at risk.

The discontinuation of wood supply from Russia has made the pulpwood market situation in the Baltic Sea area tighter and has led to a steep increase in the price of wood. Challenges in the availability of wood could affect production continuity and thus the sales of the company’s products and its profitability. Should the conflict in the Middle East spread, it may affect the price of oil and natural gas. Changes in the prices of electricity, natural gas or chemicals, or challenges in their availability, as well as changes in the prices of emission allowances, may have a negative impact on Metsä Board’s profitability.

In addition, the availability of transport capacity and a steep increase in market prices may negatively affect the company’s profitability. Attacks on ships in the Red Sea are hampering sea transports between Europe and Asia, causing additional costs and delays in deliveries. Prolonged instability in the region’s safety situation may have a negative impact on the product deliveries of Metsä Board and its associated company Metsä Fibre.

Changes in exchange rates may affect the costs of some production inputs. The Group aims to hedge against these risks by making long-term supply agreements and related derivatives contracts.

Concentration of operations in a limited geographical area

Seven of Metsä Board’s eight production units are located in Finland, and one of them is located in Sweden. Finland has a history of labour disputes in both the forest industry and the distribution chain of forest industry products. These may have a negative impact on production volumes and customer deliveries and weaken the company’s competitiveness and profitability. Labour disputes in Sweden may also interfere with Metsä Board’s production and customer deliveries and have a negative impact on the company’s business operations.

Continuity risks

The continuity of mills’ production may be impacted by large-scale fires or explosions, significant equipment malfunctions, serious accidents, extreme weather phenomena and environmental damage, for example. In addition, labour disputes, cyberattacks and malware, and the ensuing long-term malfunctions in IT systems, employees falling ill due to infectious diseases, availability issues concerning the most important raw materials and disruptions in the logistics chain may suspend the entire business or parts of it.

Interruptions in production or the supply chain may influence the continuity of customer service and delivery reliability. If such interruptions continue for a long time, the resulting financial losses may be substantial and result in the permanent loss of customers. To protect itself against these risks, the company has prepared contingency plans and obtained insurance protecting property and business.

The amount and costs of property damage and business interruption, as well as the approval of related compensation, may involve uncertainties. The availability and pricing of renewable insurance may involve uncertainty and possible additional costs.

Business development

The development and growth of Metsä Board’s business requires strategic choices that involve risks. The uncertainties in question involve the selection and timing of growth investments, for example, as well as the development of sales and the customer portfolio. The growth of the paperboard business and the introduction of new production to the market are dependent on successful sales. The commercialisation of new products involves uncertainties that, should they be realised, could have a negative impact on the demand for Metsä Board’s products and the company’s prof- itability. Increasing sales on a global scale also involves cost and exchange rate risks.

The business is also developed by modernising the production tech- nology, efficiency programmes, product development and harmonising business processes. If development projects and investments significantly exceed their costs, or if their completion is delayed or their production

17

or commercial objectives are not met, this could negatively affect the company’s profitability.

Corporate and security risks

Risks to corporate security include shortcomings and neglect in personal safety and security and safety at work and in the management of financial misconduct, any negative information manipulation and cyber threats, threats affecting the supply chains, and the adequacy of internal control. A cyberattack on information systems could lead to a leak of sensitive information and damage the company’s reputation. Operating processes related to corporate security and the guidelines, training and internal control related to the management of threat factors are developed contin- uously, and exercises on the management of crisis situations are organised on a regular basis.

Personnel availability and retention

Metsä Board pays attention to ensuring the availability and retention of competent personnel through various personnel development pro- grammes and successor plans, and by investing in its employer image. Metsä Board also prepares for retirements and other personnel risks through the promotion of multiple skills and work ability as well as through job rotation.

Liability risks

Metsä Board’s business involves liability risks, such as contractual, envi- ronmental and product liability risks. Liability risks are managed by way of efficient business processes, contract training, management practices, quality control and transparent operations. Some of the operational liabil- ity risks have been hedged with insurance policies.

Business ethics

Risks related to business ethics are discussed in this report’s Sustainability statement.

Financial risks

Financial and exchange rate risks

As a result of potential financial market disturbance, the operations of credit and bond markets may become more difficult, which may affect the company’s ability to acquire long-term debt financing at a competitive price. The financial risks are managed in accordance with the treasury policy approved by Metsä Board’s Board of Directors. The purpose is to hedge against considerable financial risks, balance cash flow and give the business enough time to adjust to changing conditions.

Metsä Board sells its products in several countries and is therefore susceptible to fluctuations in exchange rates. The US dollar strengthening by 10% against the euro would have a positive impact of approximately EUR 85 million on Metsä Board’s annual operating result. Correspondingly, the Swedish krona strengthening by 10% would have a negative impact of approximately EUR 55 million. The British pound strengthening by 10% would have a positive impact of approximately EUR 15 million. The impact of weakened exchange rates would be the opposite. The sensitivities do not include the impact of hedging.

Credit risks

The management of credit risks related to commercial operations is the responsibility of Metsä Board’s executive management and Metsä Group’s centralised credit control. Metsä Board’s management determines the lim- its on credit extended to customers and the applicable terms of payment in cooperation with the centralised credit control. As a rule, credit insurance covers nearly all credit risks. Metsä Board’s customer credit risk was at a normal level in 2024. The main principles of credit control are defined in the credit guidelines of the risk management policy approved by the compa- ny’s Board of Directors.

Metsä Board’s financial risks and their management are described in more detail in Note 5.6 (Management of financial risks) to the consolidated financial statements in the 2024 Annual Review.

Shares and trading

Metsä Board has two series of shares. Each series A share entitles its holder to twenty (20) votes at a General Meeting of Shareholders, and each series B share entitles the holder to one (1) vote. All shares carry the same right to receive a dividend. Metsä Board’s shares are listed on the Nasdaq Helsinki.

At the end of December 2024, closing price of Metsä Board’s B share on the Nasdaq Helsinki was EUR 4.24. The share’s highest and lowest prices were EUR 8.11 and EUR 3.97, respectively. Correspondingly, the closing price of the A share was EUR 5.60; the share’s highest and lowest prices were EUR 9.62 and EUR 5.40, respectively.

In January–December, the average daily trading volumes of the B and A shares on the Nasdaq Helsinki were around 379,200 shares and around 2,000 shares respectively. The total trading volume of the B share was EUR 603 million, and the total trading volume of the A share was EUR 4 million.

At the end of December 2024, the market value of all Metsä Board shares was EUR 1.6 billion, of which the market value of the B shares and the A shares accounted for EUR 1.4 billion and EUR 0.2 billion respectively.

Metsä Board’s major shareholder Metsäliitto Cooperative holds approx- imately 52% of Metsä Board’s shares and approximately 69% of votes. As Metsä Board is an entity controlled by Metsäliitto Cooperative, Metsäliitto Cooperative’s ownership also includes the 466,496 own shares held by Metsä Board.

International and nominee-registered investors held approximately 9% (9) of all shares

Governance

Metsä Board’s statutory administrative bodies are the Annual General Meeting, the Board of Directors and the CEO. The Board of Directors has general authority and, accounting for the scope and quality of the compa- ny’s operations, it is responsible for matters that are strategic, far-reaching and unusual in nature, and therefore not part of the company’s day-to-day business operations. The company’s operational management is handled by the CEO, supported by the Corporate Management Team, the members of which are not members of the Board of Directors. The tasks and respon- sibilities of the different corporate bodies are determined in accordance with the Finnish Limited Liability Companies Act.

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Report of the Board of Directors | Metsä Board Annual review 2024

Metsä Board’s Board of Directors has nine members, four of whom are women. A majority of Board members (six of nine) are independent of both the company and its biggest shareholders. Three members of the Board of Directors are not independent of Metsäliitto Cooperative. During the 2024 financial period, the Board of Directors held a total of 15 meetings, at which the attendance of Board members was 96% (97 in 2023).

Resolutions of the Annual General Meeting and the Board or Directors’ authority to issue shares

The 2024 Annual General Meeting (AGM) was held on 26 March 2024 in Espoo. The AGM supported all the proposals made by the Board of Directors.

The General Meeting resolved that a dividend of EUR 0.25 would be distributed per share. The dividend was paid on 9 April 2024.

The AGM resolved to remove the requirement to publish the notice of a general meeting in a Finnish newspaper of general circulation from the Articles of Association. The AGM also resolved to fully remove the section on matters discussed at a general meeting and the section concerning the auditor deeming them to be unnecessary provisions in the Articles of Association

The AGM resolved to keep the annual remuneration of the members of the Board of Directors unchanged, so that the Chair would be paid EUR 99,000, the Vice Chair EUR 85,000, and ordinary members EUR 67,000 per year. The AGM resolved that approximately half the annual remuner- ation would be paid in the company’s series B shares to be acquired from public trading. The transfer of such shares is restricted for a two-year period. Meeting fees were increased to EUR 1,000 (from EUR 800) for each meeting of the Board of Directors and its Committees that a member attends. Meeting fees are paid in cash. Furthermore, the AGM resolved to keep the monthly remuneration paid to the Chair of the Audit Committee unchanged at EUR 900.

The AGM confirmed the number of members of the Board of Directors as nine (9) and elected the following persons as Board members: Raija-Leena Hankonen-Nybom, MSc (Economics); Erja Hyrsky, MSc (Economics); Ilkka Hämälä, MSc (Engineering); Mari Kiviniemen, MSocSc (Economics); Jussi Linnaranta, MSc (Agriculture and Forestry); Jukka Moisio, MSc (Economics); Mikko Mäkimattila, MSc (Agriculture and Forestry); Juha Vanhainen, MSc (Engineering); and Leena Craelius, MSc (Economics). The term of office of the members of the Board of Directors expires at the end of the next AGM.

At its first meeting, the Board of Directors elected Ilkka Hämälä as its Chair and Jussi Linnaranta as its Vice Chair. The Board of Directors made the following decisions on committees: Raija-Leena Hankonen-Nybom was elected Chair of the Audit Committee, and Leena Craelius, Mari Kiviniemi, Jukka Moisio and Juha Vanhainen were elected members of the Audit Committee. Ilkka Hämälä was elected Chair of the Nomination and HR Committee, and Erja Hyrsky, Jussi Linnaranta and Mikko Mäkimattila were elected as members of the Committee.

The AGM resolved to authorise the Board of Directors to decide on the issuance of shares, the transfer of treasury shares and the issuance of

special rights referred to in chapter 10, section 1 of the Finnish Companies Act. The authorisation applies to B-shares. By virtue of the authorisation the Board is entitled to issue up to 35,000,000 new B-series shares, including shares to be issued pursuant to rights entitling to shares. The number of shares corresponds to approximately 10% of all current shares The authorisation is effective until 30 June 2025.

The AGM resolved to authorise the Board to decide on the repurchase of the company’s own series B shares. The number of the company’s own shares to be repurchased under the authorisation will not exceed 1,000,000 series B shares, which corresponds to approximately 0.3% of all shares in the company. The authorisation is effective until 30 June 2025.

Near-term outlook

The overall demand for consumer products and fresh fibre paperboards is influenced by the development of consumers’ purchasing power and general purchasing behaviour. Paperboard capacity, which is growing faster than demand, may cause imbalances, especially in the European paperboard market.

In January–March 2025, Metsä Board’s paperboard delivery volumes are expected to increase from the previous quarter (10–12/2024: 342,000 tonnes). Sales prices in local currencies are expected to remain stable.

Total costs, excluding pulp costs, are expected to remain at the previous quarter’s level.

There are no planned annual maintenance shutdowns at the mills in January–March.

Demand for softwood market pulp is expected to remain stable in Europe and China. Pulp capacity closures and restrictions related to the availability of wood raw material in North America, announced last year, will continue to reduce the supply of softwood market pulp. Demand for sawn timber is expected to remain at the current level.

Associated company Metsä Fibre’s result share is expected to improve from the previous quarter.

In January–March 2025, exchange rate fluctuations, including the impact of hedges, will have a flat impact on the result compared to October–December 2024 and slightly positive impact compared to January–March 2024.

Board of Directors’ proposal for the distribution of profits

The distributable funds of the parent company on 31 December 2024 were EUR 479.0 million, of which the retained earnings for the financial year are EUR 268.4 million.

The Board of Directors proposes to the Annual General Meeting conven- ing on 20 March 2025 that a dividend of EUR 0.07 per share be distributed for the 2024 financial period.

The proposed dividend corresponds to 98% of the earnings per share for 2024. The amount of dividend totals approximately EUR 25 million.

The dividend will be paid to shareholders who are registered in the com- pany’s shareholders register held by Euroclear Finland Oy on the dividend payment record date of 24 March 2025. The Board of Directors proposes 31 March 2025 as the dividend payment date.

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Sustainability statement

General disclosures

Reporting principles

Sustainability statement reporting principles

Basic information

Metsä Board Corporation and its subsidiaries form a forest industry group (“Metsä Board” or “group”). Metsä Board’s business operations comprise folding boxboards, white kraftliners and market pulp. Reporting covers the entire group and all the companies in which the group directly or indirectly holds more than 50% of the votes unless otherwise stated in connection with the disclosed information. Metsä Board owns 24.9% of its associated company Metsä Fibre Oy (“Metsä Fibre”), and financial reporting includes the share of Metsä Fibre’s net results and equity corresponding to this holding. The scope of consolidation is the same as that in the financial statements. The consolidation principles are discussed in greater detail in the consolidated financial statements under 7. Group structure . In sustain- ability reporting, the share corresponding to this holding is not included in Metsä Board’s sustainability information. Instead, Metsä Fibre is accounted for as part of the value chain. For example, Metsä Fibre’s Scope 1 and Scope 2 emissions are accounted for in the emissions from Metsä Board’s value chain (Scope 3). Metsä Board is part of Metsä Group, which publishes a Sustainability statement encompassing all of Metsä Group.

In Metsä Board’s Sustainability statement, reporting mainly focuses on the Metsä Board Group. As Metsä Board follows Metsä Group’s policies and processes and uses Metsä Group’s shared services, reference is made to Metsä Group in some cases. Production unit-specific key figures related to the environment and employees are disclosed on page 97.

The Sustainability statement is published annually as part of the Report of the Board of Directors. The reporting period coincides with that of financial reporting – that is, the financial period from 1 January 2024 to 31 December 2024.

Basis for preparation

The Sustainability statement is prepared in accordance with sustainability reporting standards (European Sustainability Reporting Standards, ESRS) referred to in Chapter 7 of the Accounting Act and with the Article 8 of Taxonomy Regulation.The progress made in Metsä Board’s 2030 sustaina- bility targets is also reported in this Sustainability statement.

The disclosed sustainability matters and key figures are based on a dou- ble materiality assessment updated in 2024. The reporting requirements of the European Sustainability Reporting Standards that are material to the company’s operations, products and stakeholders were chosen based on the materiality assessment. Further information about the materiality assessment and its results is provided on pages 26–28.

The reporting principles for metrics related to each topic are described at the end of each section. Of the metrics, the greatest uncertainty concerns calculations involving the use of default coefficients such as greenhouse gas emissions or carbon storage coefficients. Estimates have been used to calculate Scope 3 emissions. The reporting principles for Scope 3 emissions are discussed on pages 50–51. Moreover, a breakdown

of the capital expenditure for actions or the expenditure’s allocation to the promotion of different areas is not presented for all investments, as some of the expenses are indirect and are incurred as part of other investments. In these cases, the total value of the investment is reported.

The Sustainability statement has been assured (limited assurance) by KPMG Oy Ab, an independent third party. Assurance was conducted in accordance with the ISAE 3000 international assurance standard (Revised).

Comparative metrics were not assured as part of the 2024 assurance. This applies to comparative data for 2018, 2022 and 2023.

The reported ESRS information, Metsä Board’s own metrics and their location in the Sustainability statement are indicated in the content index. The index also presents the ESRS indicators identified as being non-mate- rial for Metsä Board.

On its website, Metsä Board has separately published content indices that comply with the requirements of the SASB Pulp & Paper Products industry standard and the TCFD and TNFD recommendations. TCFD and TNFD information is not included in the scope of assurance. SASB informa- tion, excluding the share of grid electricity and the amount of energy sold, is based on Metsä Board’s Sustainability statement, which is assured by a third party (limited assurance).

Risk management and internal controls of sustainability reporting

Metsä Board’s sustainability reporting complies with Metsä Group’s com- mon principles and processes for statutory reporting, risk management and internal control.

In sustainability reporting, internal control is based on risk identification, analysis and a focus on the most material risks identified, as well as the best practices of internal control. Metsä Group’s internal control unit and internal control processes, as well as its risk management process, comply with the principles of the COSO (ERM) framework. The sustainability reporting control environment emphasises the company’s values, management’s commitment to sustainable operations, a corporate culture emphasising ethics and sustainability, policies promoting sustainable operations, centralised business processes, professional employees, and transparent operations.

Metsä Board’s Chief Financial Officer, supported by the sustainability function, is in charge of the implementation of sustainability reporting. In its sustainability reporting, the company uses Metsä Group’s head office support functions, especially financial services.

The risks identified in sustainability reporting include the accuracy of information and the timing of reporting. To ensure that the disclosed infor- mation is accurate and appropriately timed, Metsä Group has defined and adopted a governance model that specifies the roles and responsibilities in sustainability reporting. Metsä Group has included the capacities required to produce the disclosed information in the common business processes that Metsä Board and Metsä Group’s other business areas and head office functions follow in their operations.

The owners of business processes ensure that the process environment can transparently produce the required information for disclosure. The responsibility for the accuracy of content, as well as compliance with reporting schedules and the provision of material to Metsä Group Account- ing, is assigned to the roles in Metsä Group’s business areas and service functions specified in the governance model.

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Report of the Board of Directors | Metsä Board Annual review 2024

CEO and Corporate Management Team

Metsä Board’s CEO is in charge of the implementation of sustainability measures in accordance with the Board’s instructions. Once a year, the CEO reports to the Board on material impacts, risks and opportunities related to sustainability and on the progress made in achieving sustaina- bility targets by presenting a sustainability review and a separate environ- mental review to the Board, either alone or jointly with the company’s sus- tainability specialists. In addition, the CEO presents an occupational safety review to the Board of Directors and jointly with the SVP, Development, an R&D review twice a year. The CEO reports to the Board without delay on all sustainability-related risks with a significant impact on the company.

In 2024, the Corporate Management Team had six (6) members, of whom 83% were men (5), and 17% were women (1). The representation of employees in the company’s management is organised so that the management team of each of the company’s production units includes one employee representative.

The company’s Corporate Management Team prepares sustainabili- ty-related matters before the CEO presents them to the Board of Directors and for its part, supervises the implementation of the approved sustaina- bility measures and sustainability-related impacts, risks and opportunities regularly at its meetings.

Of the Corporate Management Team’s members, the SVP, Development is responsible for research and product development, and for business development and sustainability. The SVP, Development reports monthly to the Corporate Management Team on topical sustainability-related matters that affect the company. Metsä Board’s and Metsä Group’s sustainability specialists present a review of sustainability matters to the Corporate Management Team twice a year. The SVP, Development participates in the management team of Metsä Group’s sustainability process and reports the results of sustainability measures to the team quarterly.

The SVP, Development manages Metsä Board’s product safety and sustainability function, which includes the company’s Product Safety and Sustainability Director and several specialists. The team works in close cooperation with production, wood supply, procurement and logistics, HR, marketing and sales, communications, investor relations, finance, and legal affairs. Wood supply and procurement are centrally handled in Metsä Group.

In turn, the company’s CFO heads Metsä Board’s Risk Committee, which handles sustainability risks as part of the company’s general risk assessment.

The Corporate Management Team regularly discusses reviews related to occupational safety, the environment, energy, information security, current regulation and compliance. In addition, the Corporate Management Team discusses the internal control monitoring report, including sustainability controls and their results, twice a year.

Integration of sustainability-related performance in incentive schemes

At Metsä Board, remuneration is based on the following principles:

Ensuring sustainable and responsible business operations

Ensuring performance and profitable growth

Supporting competence development and renewal

Consistency, competitiveness and transparency.

To ensure the sustainability and responsibility of its business, Metsä Board uses remuneration to support the achievement of its strategic, operational

and sustainability targets. The company encourages activities in line with its values and interests – responsible profitability, reliability, renewal and cooperation. At least one sustainability target is included in the annual performance-based remuneration of every Metsä Board employee. The target-setting model will continue to encourage the continuous assess- ment and improvement of sustainability matters.

The principles of Metsä Board’s remuneration and the overall remuneration of the administrative, management and supervisory bodies are described in greater detail in the 2024 Remuneration Report and Remuneration Policy .

The Board of Directors approves the CEO’s salary and remuneration, as well as the principles applied to the remuneration of other members of the Corporate Management Team. The Board of Directors also approves the structure, target group, principles and indicators of the company’s remuneration schemes and the relevant target values for the indicators. The Board of Directors’ Nomination and HR Committee assists the Board in handling matters related to the remuneration, terms of employment and rewarding of management and prepares the Board’s decisions concerning management remuneration. The CEO decides on the compensation of other Corporate Management Team members in cooperation with the Chair of the Board of Directors and in accordance with the principles approved and guidelines issued by the Board. The remuneration of the Board of Directors is not linked to Metsä Board’s performance.

In 2024, the maximum level of remuneration available in the CEO’s short-term incentive system was, accounting for Metsä Group’s EBIT multiplier, 75% of the fixed annual salary. The reward is based on Metsä Board’s operating result (50% weighting) and the strategic targets defined by the Board of Directors (50% weighting), including the sustainability targets, as well as the realisation of Metsä Group’s EBIT multiplier. In 2024, the CEO’s sustainability targets were related to occupational safety and strategic programmes, the goals of which include reducing fossil-based CO 2 emissions, promoting the use of fossil-free raw materials and reducing process water use in production. The weighting of the CEO’s occupational safety target was 10%, and its realisation was 132%.

In 2024, the maximum level of remuneration available in the short-term incentive system for other Corporate Management Team members was, accounting for Metsä Group’s EBIT multiplier, at most 50% or 62.5% of the fixed annual salary. The reward is based on Metsä Board’s operating result (50% weighting) and the targets of its own responsibility area, including sustainability targets (50% weighting), as well as the realisation of Metsä Group’s EBIT multiplier. In 2024, the sustainability targets of other Cor- porate Management Team members were related to occupational safety, wellbeing at work, fossil-free products and production, the development of recyclable, compostable and bio-based products, and strategic pro- grammes, the goals of which include reducing fossil-based CO 2 emissions, promoting the use of fossil-free raw materials and reducing process water use in production. The weighting of sustainability targets was on average 16 % for the other Corporate Management Team members, and their realisation was on average 102%.

Business model, value chain and strategy

Business model and value chain

Metsä Board uses renewable raw materials to produce premium resource-efficient fresh fibre paperboards that support the principles of the circular economy and offer an alternative to fossil-based packaging

23

Report of the Board of Directors | Metsä Board Annual review 2024

Interests and views of stakeholders

This table includes a summary of Metsä Board’s key stakeholders, and of how themes important to them are considered in the company’s strategy and business model.

Stakeholder

Stakeholder engagement

Themes important to stakeholders

Impact on operations, business model and strategy

Own workforce

Employee survey and Pulse survey

Cooperation with employee representatives

Safety and health at work and related observations

Compliance and Ethics Channel

Health and safety

Diversity, equality and inclusion (DEI)

Competence development and good leadership

Working conditions and other work-related rights

Organisation’s resilience

Certified safety management systems

Metsä For All vision

Anonymous recruitment

Metsä Group’s academies and other training

Development of leadership and key capabilities

Measures determined based on the employee survey

Customers, consumers and end-users

Continuous dialogue and cooperation

Events and training

Customer experience surveys

Customer feedback forms

Sustainability assessments

Contact forms on web pages

Information about product performance and sustainability

Product safety and quality

Sustainable forest management and biodiversity

Climate change mitigation across the value chain

Climate change adaptation

Products replacing fossil-based materials and recyclable products

Carbon footprint of products and the use and development of life-cycle calculation

Strategy of regenerative forestry

Resource-efficient production

Product safety and quality, and certified management systems

Up-to-date product information

Shareholders, analysts and other capital market representatives

Continuous dialogue and cooperation

Investor meetings and events coordinated by the company and/or brokerage firms, including mill visits

Financial reporting and releases

Annual General Meeting

Cooperation with external assessors and credit rating agencies

Climate change mitigation across the value chain

Climate change adaptation

Paperboard as a replacement for plastic

Biodiversity and availability of wood raw material

Human rights and diversity

Management of sustainability risks and good governance

Impact of sustainability regulation on the demand for paperboard and availability of wood raw material

Investments in fossil-free production and products, and the improvement of the mill’s production and resource efficiency

Forest certification and regenerative forestry

Metsä For All vision

Sustainability targets in management remuneration

Definition and management of sustainability risks and assess- ment of financial impacts

Suppliers and workers in the supply chain

Supplier days

Cooperation forums for occupational safety

Cooperation survey for suppliers

Sustainability working group activi- ties with partner suppliers

Continuous dialogue and cooperation

Compliance and Ethics Channel

Safety and health

Working conditions and other work-related rights

Climate change mitigation across the value chain

Climate change adaptation

Biodiversity

Circular economy

Certified safety management systems

Proactive model for combating the grey economy in construc- tion projects

Strategy of regenerative forestry

Joint sustainability targets with partner suppliers

Measures defined based on the cooperation survey for suppliers

Assessment of suppliers’ sustainability as part of the selection process and cooperation

Local communities

Open house and other events at production units

Consultation of local communities in investment projects

Cooperation days

Compliance and Ethics Channel

Local impacts of mills such as noise, dust and odour nuisance

Climate change mitigation and climate change adaptation

Biodiversity

Promotion of employment, livelihood and entre- preneurship; tax revenue

Inclusive cooperation and decision-making

Resource-efficient and fossil-free production, waste-free production

Best available techniques

Regenerative land-use policies and biodiversity plans at mills

Indigenous peoples (the Sámi)

Bilateral meetings

Cooperation days

Compliance and Ethics Channel

Rights of indigenous peoples

Safeguarding traditional livelihoods

Climate resilience of northern nature

Free, prior and informed consent

Intergenerational and experimental knowledge of indigenous peoples alongside scientific knowledge

Inclusive cooperation and decision-making

Engagement of suppliers knowledgeable about the rights of the Sámi

When planning and implementing wood supply and forestry work, measures are taken to locally ensure that the reindeer herding of the Sámi is not jeopardised. The conditions for the reindeer herding of the Sámi are safeguarded with agreements and regular audits of our wood suppliers

Policymakers

Public hearings

Bilateral meetings

Events, seminars and panels

Forest and mill visits

Compliance and Ethics Channel

Circular bioeconomy

Climate change mitigation and climate change adaptation

Biodiversity

Logistics and public infrastructure

New products and innovation

Renewal, investments and jobs

Solutions-oriented cooperation

New investments

Resource-efficient and fossil-free production, waste-free production

Products replacing fossil-based materials and recyclable products

Strategy of regenerative forestry

Regenerative land-use policies and biodiversity plans at mills

Funding programme for nature projects

Lobbying and industrial associations

Bilateral meetings

Events, seminars and panels

Cooperation days

Forest and mill visits

Sustainable products

Climate change mitigation and climate change adaptation

Biodiversity

Safeguarding biodiversity

Advocacy cooperation

Wellbeing of the industry, value chain and operators

Products replacing fossil-based materials and recyclable products

Resource-efficient and fossil-free production

Strategy of regenerative forestry

Regenerative land-use policies and biodiversity plans at mills

The wood processing industry’s biodiversity roadmap and further measures

Researchers, educational institutions and students

Cooperation projects

Cooperation events

Forest and mill visits

Recruitment events

Thesis assignments and traineeships

Surveys

Research and development cooperation

Education, training and competence

Investments and jobs

Learning, training and education

Working life

Diversity, equality and inclusion

Joint research and development projects

Strategy of regenerative forestry

Regenerative land-use policies and biodiversity plans at mills

Funding programme for nature projects

Education and training cooperation, and partnerships

Jobs and traineeships

Student guidance and induction

NGOs

Bilateral meetings

Project cooperation

Cooperation days

Compliance and Ethics Channel

Biodiversity

Climate change mitigation and climate change adaptation

Forest protection and old-growth forests

Forestry methods

Forestry’s impact on waterbodies

Strategy of regenerative forestry

Regenerative land-use policies and biodiversity plans at mills

Funding programme for nature projects

Forest protection (incl. METSO programme)

The wood processing industry’s biodiversity roadmap and further measures

25

Based on the 2022 assessment, seven themes guiding sustainability work were determined. They are described in the summary of the materiality assessment on page 26.

The strategic 2030 sustainability targets were updated based on these themes. The framework of the EU’s sustainability reporting standards was not yet used to classify sustainability themes in the first assessment.

The classification of impacts, risks and opportunities into topics, sub-topics and sub-sub-topics in accordance with the EU’s sustainability reporting standards was included in the 2023 assessment. As part of the work carried out in 2023, an assessment scale was drawn up.

The 2024 assessment was further developed from 2023 by introducing a more detailed classification, a more specific definition of financial impacts, a review of climate scenarios and an assessment of human rights impacts conducted by an external party.

Stakeholder engagement

Since 2024, stakeholder feedback has been collected and analysed across Metsä Group twice a year. The results of the analysis are used in the mate- riality assessment especially to survey whether all the material impacts, risks and opportunities have been identified internally and to strengthen the internal recognition of impacts, risks and opportunities. The themes important to stakeholders are in line with the identified impacts, risks and opportunities. Stakeholder engagement and how themes important to stakeholders are addressed in the company’s strategy and business model are described under Interests and views of stakeholders .

The identification and assessment of material impacts, risks and opportunities related to the environment

The material impacts, risks and opportunities related to the environment have been identified and assessed using key information and methods for each topic. These include material such as the climate risk analysis conducted in 2024, risk assessments of production units and environ- mental impact assessments. The identification and assessment process is described for each topic under the relevant section: E1 – Climate change , E2 – Pollution , E3 – Water and marine resources , E4 – Biodiversity and ecosystems and E5 – Resource use and circular economy .

Assessment of human rights impacts

In the reporting year, an external partner carried out an assessment of human rights impacts at Metsä Board. The assessment was based on internal specialist interviews, interviews with external stakeholders, Metsä Board’s documentation and literature from public sources. External stake- holder interviews were conducted with raw material and goods suppliers, the trade union, and the Sámi Parliament. Human rights impacts were

assessed based on their likelihood, scope, remediability and scale. The assessment was conducted in compliance with the UN Guiding Principles on Business and Human Rights. The impacts were assessed using the same scale employed in the company’s general risk assessment, and the identified impacts were included in the sustainability materiality assess- ment. The assessment identified and evaluated the direct and indirect impacts across the value chain and in the affected communities, as well as the groups potentially at a higher risk of being affected by the identified impacts. The identified impacts were validated in internal workshops, and the results were presented to Metsä Board’s Corporate Management Team. After the assessment of human rights impacts, a human rights due diligence process was drawn up for Metsä Board, and further development measures related to human rights impacts were defined for the coming years.

2024 results

The results of the materiality assessment are presented alongside the description of the materiality process on page 26. Sub-topics classified as moderate (a value of 5–9) or high (a value of 10–25) were determined as material sub-topics. The table does not include sub-topics of low materiality.

Based on the results of the materiality assessment, Metsä Board’s key sustainability matters include climate change, biodiversity, the environ- mental impacts of products, and the occupational safety of the company’s own workforce and value chain workers. No specific functions or areas requiring a more comprehensive risk assessment were identified in the materiality assessment. In the value chain, the main themes are related to the company’ own production, wood supply and products.

The main themes did not change from 2023. Compared with 2023, the following were the most significant changes in the assessment:

Climate change adaptation was assessed to be less material based on the 2024 climate risk analysis of physical risks, which indicated that the location of Metsä Board’s production units is a strength in a changing climate.

Based on a more detailed assessment of financial impacts and the 2024 update to the financial risk assessment scale, pollution-related business risks especially were considered to be less material.

Following the assessment of human rights impacts, the equal treatment and opportunities for all workers in the value chain were highlighted as a new material theme.

In the assessment, a sharper division was made between corporate culture and corruption and bribery. The root causes and impacts related to these themes are often similar, which makes it challenging to separate the themes.

28

Report of the Board of Directors | Metsä Board Annual review 2024

Metrics and targets

TARGET

2030 TARGET

2024 ACTUAL

2024 PROGRESS

UN SDG

E – ENVIRONMENT

1. Securing biodiversity and ecologically sustainable forestry

MG: Retention trees on regeneration felling sites, %

100

97

•

13, 15

MG: High biodiversity stumps on harvesting sites, %

100

98

•

13, 15

MG: Spruce as the only tree species after young stand management, %

0

26

•

13, 15

MG: Measures promoting biodiversity, number

10,000

6,586

•

13, 15

2. Mitigating climate change and reducing emissions

Improvement in energy efficiency from the 2018 level, %

+ 10

0.9

•

7, 12, 13

Fossil-based carbon dioxide emissions (Scope 1 and Scope 2 market-based), t

0

251,708

•

12, 13

Share of target group suppliers with targets set in accordance with the SBTi by 2024 (Scope 3), %

70

24

•

13

Fossil-free raw materials and packaging materials, share of dry tonnes, %

100

98.9

•

9, 12

MG: Amount of forest regeneration and young stand management from the 2018 level, %

+30

18

•

13, 15

MG: Amount of forest fertilisation from the 2018 level, %

+50

-22

•

13, 15

MG: Share of continuous cover forestry in peatland forest regeneration, %

30

15

•

13, 15

MG: Amount of carbon stored in wood products from the 2018 level, %

+30

-25

•

12, 13

3. Resource efficiency and sustainable production

Reduction in process water use per produced tonne from the 2018 level, %

-35

-11

•

6, 12

Process waste delivered to landfills, t

0

267

•

12

S – SOCIAL RESPONSIBILITY

4. Respecting everyone and doing the right thing

Anonymous recruitment for vacancies open to all, %

100

99.2

•

5, 8

Women in management positions, %

>30

23

•

5, 8

5. Promoting safety and wellbeing at work

Total recordable incident frequency, own employees (TRIF)

0

3.4

•

8

Employee commitment

AAA

A+

•

5, 8

G –GOVERNANCE

6. Innovation and open-minded cooperation and 7. The significance of forest-based bioeconomy to society

Ethics index

100

79

•

5, 8

Traceability of raw materials, share of total purchases, %

100

97

•

9, 12

Share of certified wood fibre, %

>90

92

•

15

Suppliers’ commitment to the Supplier Code of Conduct, share of total purchases %

100

99.0

•

8, 12

Supplier assessments and audits of core suppliers, %

100

79

•

8, 12

MG: Joint sustainability target with partner suppliers, %

100

100

•

12, 13

MG: The target has been set at the level of Metsä Group. Targets will be reached by the end of 2030. For example, fossil fuels will be abandoned by 31 December 2030. Metsä Board’s target of “0 accidents at work” also applies to service suppliers. In the future, service suppliers will be included in the performance figure. The 2024 ethics index is not directly comparable with those of previous years, as the content of statements affecting the index has been revised. The targets for different topics are described in greater detail in the topic-specific sections of this Sustainability statement.

Progress in 2024 compared with the previous year.

Exceeds target (significant progress) •

On target (progress as planned) •

Short of target (no progress or weaker progress) •

29

Report of the Board of Directors | Metsä Board Annual review 2024

ESRS content index

The ESRS content index lists the disclosure requirements that Metsä Board has followed in preparing its sustainability statement and where they can be found.

ESRS INDICATOR

LOCATION & COMMENT

ESRS 2 – General Disclosures

BP-1 – General basis for preparation of sustainability statements

BP-2 – Disclosures in relation to specific circumstances

GOV-1 – The role of the administrative, management and supervisory bodies

GOV-2 – Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies

GOV-3 – Integration of sustainability-related performance in incentive schemes

GOV-4 – Statement on due diligence

GOV-5 – Risk management and internal controls over sustainability reporting

SBM-1 – Strategy, business model and value chain

SBM-2 – Interests and views of stakeholders

SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model

IRO-1 – Description of the processes to identify and assess material impacts, risks and opportunities

IRO-2 – Disclosure requirements in ESRS covered by the undertaking’s sustainability statement

Policies MDR-P – Policies adopted to manage material sustainability matters

Actions MDR-A – Actions and resources in relation to material sustainability matters

Metrics MDR-M – Metrics in relation to material sustainability matters

Targets MDR-T – Tracking effectiveness of policies and actions through targets

ESRS E1 – Climate Change

E1-1 – Transition plan for climate change mitigation

E1-2 – Policies related to climate change mitigation and adaptation

E1-3 – Actions and resources in relation to climate change policies

E1-4 – Targets related to climate change mitigation and adaptation

E1-5 – Energy consumption and mix

E1-6 – Gross Scopes 1, 2, 3 and Total GHG emissions

E1-7 – GHG removals and GHG mitigation projects financed through carbon credits

Metsä Board does not have carbon capture of offsets.

E1-8 – Internal carbon pricing

E1-9 – Anticipated financial effects from material physical and transition risks and potential climate-related opportunities

E1 Financial effects

Anticipated financial effects reported partly as qualitative information.

ESRS E2 – Pollution

E2-1 – Policies related to pollution

E2-2 – Actions and resources related to pollution

E2-3 – Targets related to pollution

E2-4 – Pollution of air, water and soil

E2-5 – Substances of concern and substances of very high concern

Metsä Board does not cause emissions of substances of concern or very high concern.

E2-6 – Anticipated financial effects from pollution-related impacts, risks and opportunities

E2 Financial effects

Anticipated financial effects reported partly as qualitative information.

31

Report of the Board of Directors | Metsä Board Annual review 2024

ESRS INDICATOR

LOCATION & COMMENT

ESRS S1 – Own Workforce

S1-13 – Training and skills development metrics

S1-14 – Health and safety metrics

S1-15 – Work-life balance metrics

S1-16 – Compensation metrics (pay gap and total compensation)

S1-17 – Incidents, complaints and severe human rights impacts

ESRS S2 – Workers in the Value Chain

S2-1 – Policies related to value chain workers

S2-2 – Processes for engaging with value chain workers about impacts

S2-3 – Processes to remediate negative impacts and channels for value chain workers to raise concerns

S2-4 – Taking action on material impacts on value chain workers, and approaches to man- aging material risks and pursuing material opportunities related to value chain workers, and effectiveness of those action

S2-5 – Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

ESRS S3 – Affected Communities

S3-1 – Policies related to affected communities

S3-2 – Processes for engaging with affected communities about impacts communities about impacts

S3-3 – Processes to remediate negative impacts and channels for affected communities to raise concerns

S3-4 – Taking action on material impacts on affected communities, and approaches to man- aging material risks and pursuing material opportunities related to affected communities, and effectiveness of those actions

S3-5 – Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

ESRS S4 – Consumers and end-users

S4-1 – Policies related to consumers and end-users

S4-2 – Processes for engaging with consumers and end-users about impacts

S4-3 – Processes to remediate negative impacts and channels for consumers and end-users to raise concerns

S4-4 – Taking action on material impacts on consumers and end-users, and approaches to managing material risks and pursuing material opportunities related to consumers and end-users, and effectiveness of those actions

S4-5 – Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

ESRS G1 – Business Conduct

G1-1– Business conduct policies and corporate culture

G1-2 – Management of relationships with suppliers

G1-3 – Prevention and detection of corruption and bribery

G1-4 – Confirmed incidents of corruption or bribery

G1-5 – Political influence and lobbying activities

G1-6 – Payment practices

33

Report of the Board of Directors | Metsä Board Annual review 2024

ESRS INDICATOR

LOCATION & COMMENT

SFDR reference

Pillar 3 reference

Benchmark Regulation reference

EU Climate Law reference

ESRS E2 – Pollution

E2-4 Amount of each pollutant listed in Annex II of the E-PRTR Regula- tion (European Pollutant Release and Transfer Register) emitted to air, water and soil

paragraph 28

x

ESRS E3 – Water and marine resources

E3-1 Water and marine resources

paragraph 9

x

E3-1 Dedicated policy

paragraph 13

Not material.

x

E3-1 Sustainable oceans and seas

paragraph 14

Not material.

x

E3-4 Total water recycled and reused

paragraph 28 (c)

x

E3-4 Total water consumption in m 3 per net revenue on own operations

paragraph 29

x

ESRS E4 – Biodiversity and ecosystems

IRO 1 - E4

paragraph 16 (a) i

x

IRO 1 - E4

paragraph 16 (b)

x

IRO 1 - E4

paragraph 16 (c)

x

E4-2 Sustainable land / agriculture practices or policies

paragraph 24 (b)

Not material.

x

E4-2 Sustainable oceans / seas practices or policies

paragraph 24 (c)

Not material.

x

E4-2 Policies to address deforestation

paragraph 24 (d)

x

ESRS E5 – Resource use and circular economy

E5-5 Non-recycled waste

paragraph 37 (d)

x

E5-5 Hazardous waste and radioactive waste

paragraph 39

E5 Waste use and disposal -table

Metsä Group’s operations do not pro- duce radioactive waste.

x

ESRS S1 – Own workforce

SBM3 - S1 Risk of incidents of forced labour

paragraph 14 (f)

x

SBM3 - S1 Risk of incidents of child labour

paragraph 14 (g)

x

S1-1 Human rights policy commitments

paragraph 20

x

S1-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8

paragraph 21

x

S1-1 Processes and measures for preventing trafficking in human beings

paragraph 22

x

S1-1 Workplace accident prevention policy or management system

paragraph 23

x

S1-3 Grievance/complaints handling mechanisms

paragraph 32 (c)

x

S1-14 Number of fatalities and number and rate of work-related accidents

paragraph 88 (b) and (c)

x

x

S1-14 Number of days lost to injuries, accidents, fatalities or illness

paragraph 88 (e)

x

S1-16 Unadjusted gender pay gap

paragraph 97 (a)

x

x

S1-16 Excessive CEO pay ratio

paragraph 97 (b)

S1-17 Incidents of discrimination

paragraph 103 (a)

x

S1-17 Non-respect of UNGPs on Business and Human Rights and OECD

paragraph 104 (a)

x

x

35

ESRS INDICATOR

LOCATION & COMMENT

SFDR reference

Pillar 3 reference

Benchmark Regulation reference

EU Climate Law reference

ESRS S2 – Workers in the value chain

SBM3 – S2 Significant risk of child labour or forced labour in the value chain

paragraph 11 (b)

x

S2-1 Human rights policy commitments

paragraph 17

x

S2-1 Policies related to value chain workers

paragraph 18

x

S2-1 Non-respect of UNGPs on Business and Human Rights principles and OECD guidelines

paragraph 19

x

x

S2-1 Due diligence policies on issues addressed by the fundamental International Labor Organisation Conventions 1 to 8

paragraph 19

x

S2-4 Human rights issues and incidents connected to its upstream and downstream value chain

paragraph 36

S2 Actions

x

ESRS S3 – Affected communities

S3-1 Human rights policy commitments

paragraph 16

x

S3-1 Non-respect of UNGPs on Business and Human Rights, ILO princi- ples or and OECD guidelines

paragraph 17

x

x

S3-4 Human rights issues and incidents

paragraph 36

x

ESRS S4 – Consumers and end-users

S4-1 Policies related to consumers and end-users

paragraph 16

x

S4-1 Non-respect of UNGPs on Business and Human Rights and OECD guidelines

paragraph 17

x

x

S4-4 Human rights issues and incidents

paragraph 35

x

ESRS G1 – Business Conduct

G1-1 United Nations Convention against Corruption

paragraph 10 (b)

x

G1-1 Protection of whistle-blowers

paragraph 10 (d)

x

G1-4 Fines for violation of anti-corruption and anti-bribery laws

paragraph 24 (a)

x

x

G1-4 Standards of anti-corruption and anti-bribery

paragraph 24 (b)

x

36

Report of the Board of Directors | Metsä Board Annual review 2024

E – Environment

The EU Taxonomy

General

The Taxonomy is a classification system for the financial market based on Regulation (EU) 2020/852, valid as of the beginning of 2022, listing economic activities sustainable in terms of climate and the environment. The goal of the Taxonomy is to channel money to sustainable investments so that the EU can achieve the ambitious emissions reduction targets it has set for itself.

The Taxonomy does not currently include technical screening criteria for Metsä Board’s main business operations, the paperboard and market pulp businesses.

Taxonomy reporting

The Taxonomy defines six main environmental objectives against which the company’s different economic activities are assessed. These environmental objectives are: (a) climate change mitigation; (b) climate change adaptation; (c) sustainable use and protection of water and marine resources; (d) transition to a circular economy; (e) pollution prevention and control; and (f) protection and restoration of biodiversity and ecosystems. Taxonomy-eligible activities have been assessed against the environmental objective to which each activity contributes most substantially. In addition, an assessment has been made to determine that the activities do no harm to any other environmental objectives. In the Taxonomy, the share of revenue, capital expenditure, and operating expenditure are reported for economic activities. Taxonomy alignment reports the extent to which business activities support environmental objectives. An economic activity is considered taxonomy-aligned if it contributes substantially to one of the defined environmental objectives and causes no significant harm to the other environmental objectives. In addition, the activity must meet minimum social safeguards.

Metsä Board has carried out its assessment of taxonomy eligibility and taxonomy alignment based on the EU Taxonomy Regulation, the Climate Delegated Act and the best interpretation of the currently available guidelines issued by the European Commission. Metsä Board’s specialists in each topic have assessed whether the economic activity indicated in the Taxonomy meet the criteria of taxonomy alignment. For each economic activity, the assessment considered the criteria for ‘substantial contribution’ and ‘no significant harm’ to determine taxonomy alignment. Minimum safeguards were examined at the Group level. Metsä Board was also supported by external specialists in the assessment.

In Metsä Board’s opinion, the company meets the Taxonomy’s minimum social safeguards, which cover human rights, corruption and bribery, fair competition and taxation. The Group has reviewed each of these from two perspectives: the presence of relevant processes; and the addressing of non-compliance. In its assessment, Metsä Board has detected no incidents of non-compliance or defects in the process. In the reporting year, a human rights impacts assessment was conducted at Metsä Board. It is described on page 28. The human rights due diligence process is described in greater detail under this Sustainability statement’s sections S – Social responsibility and G – Governance . Policies on anti-corruption and fair competition are

included in Metsä Group’s Code of Conduct. Corruption and bribery are dis- cussed in greater detail in this Sustainability statement under G1 – Business conduct and taxation in the notes to the financial statements under Taxes . In addition, section G1 – Business conduct covers Metsä Board’s practices concerning fair competition.

Reporting principles

The IFRS-compliant accounting principles followed for the consolidated financial statements are also applied to calculate the key figure for Metsä Board’s turnover. The overall turnover used to calculate the key figure corresponds to the turnover disclosed in the consolidated financial state- ments. The accounting principles used for turnover are discussed in Note 2.2 to the consolidated financial statements.

Capital expenditure includes additions to tangible and intangible fixed assets, including any additions to right-of-use assets recognised based on long-term lease agreements. Any increase in goodwill recognised for acqui- sitions is not included in the capital expenditure specified in the Taxonomy. These items are handled in accordance with IAS 38 Intangible Assets, IAS 16 Property, Plant and Equipment, and IFRS 16 Leases. Additions to intangible assets are presented in Note 4.1, and additions to property, plant and equipment in Note 4.2, to the consolidated financial statements.

Operating expenses include research and development costs recognised as expenses, and the maintenance costs of production units and property, supplemented by the costs of waste management and short-term lease agreements. The reported expenses include both external service costs and the wages, including indirect employee costs, of the company’s own employees responsible for the listed activities. In the group’s income state- ment, the operating expenditure specified in the Taxonomy is included in materials and services, employee expenses and other operating expenses. Operating expenses are disclosed in Note 2.4 to the consolidated financial statements.

The numerator for turnover, capital expenditure and operating expenses encompasses the items related to the assets or processes of economic activities in the scope of the Taxonomy. To avoid double counting, external turnover has been included in the Taxonomy operations only once. In addition, measures have been adopted to ensure that capital expenditure and operating expenses are kept separate for each operation.

CE 3.2 Renovation of existing buildings

Taxonomy-eligible capital expenditure includes the renovation of existing buildings, including renovation investments in Metsä Board’s real estate. This activity encompasses renovations with a value in excess of EUR 100,000, as renovation projects below are considered normal service and maintenance expenses.

Taxonomy-eligible capital expenditure includes renovation work at the Äänekoski, Kyro, Simpele, Kemi, Joutseno and Husum production units.

Taxonomy-eligible operating expenditure includes operating expenditure for renovations carried out on the buildings in the Tako and Husum mill areas.

CCM 4.20 Cogeneration of heat/cool and power from bioenergy

In the activity of cogeneration of heat/cool and power from bioenergy, taxonomy-eligible turnover is generated from the sale of heat produced at the Simpele power plant. The taxonomy-aligned turnover for the activity

37

Report of the Board of Directors | Metsä Board Annual review 2024

Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2024

Financial year 2024

Year

Substantial contribution criteria

DNSH criteria ('Does not significantly harm')

Economic activities

Code

CapEx

Proportion of CapEx, year 2024

Climate change migitation

Climate change adabtation

Water

Pollution

Circular economy

Biodiversity

Climate change migitation

Climate change adabtation

Water

Pollution

Circular economy

Biodiversity

Minimum safeguards

Proportion of Taxonomy aligned (A.1.) or eligible (A.2.) CapEx, year 2023

Category enabling activity

Category transitional activity

EUR million

%

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

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1 Environmentally sustainable activities (Taxonomy-aligned)

Cogeneration of heat/cool and power from bioenergy

CCM 4.20.

11.2

6%

Y

N/ EL

N/ EL

N/ EL

N/ EL

N/ EL

Y

Y

Y

Y

Y

Y

Y

10%

Production of heat/cool from bioenergy

CCM 4.24.

0.2

0%

Y

N/ EL

N/ EL

N/ EL

N/ EL

N/ EL

Y

Y

Y

Y

Y

Y

Y

CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1)

11.4

7%

7%

0%

0%

0%

0%

0%

Y

Y

Y

Y

Y

Y

Y

10%

Of which enabling

0

0%

0%

0%

0%

0%

0%

0%

Y

Y

Y

Y

Y

Y

Y

0%

Of which transitional

0%

0%

0%

A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

EL; N/ EL

EL; N/ EL

EL; N/ EL

EL; N/ EL

EL; N/ EL

EL; N/ EL

Cogeneration of heat/cool and power from bioenergy

CCM 4.20.

0.5

0%

EL

N/ EL

N/ EL

N/ EL

N/ EL

N/ EL

1%

Production of heat/cool from bioenergy

CCM 4.24.

0.0

0%

EL

N/ EL

N/ EL

N/ EL

N/ EL

N/ EL

0%

Renovation of existing buildings

CE 3.2.

3.8

2%

N/ EL

N/ EL

N/ EL

N/ EL

EL

N/ EL

1%

CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2)

4.3

2%

0%

0%

0%

0%

2%

0%

2%

A. CapEx of Taxonomy eligible activities (A.1+A.2)

15.7

9%

7%

0%

0%

0%

2%

0%

12%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

CapEx of Taxonomy-non-eligible activities

159.7

91%

TOTAL

175.4

100%

39

Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2024

Financial year 2024

Year

Substantial contribution criteria

DNSH criteria ('Does not significantly harm')

Economic activities

Code

OpEx

Proportion of OpEx, year 2024

Climate change migitation

Climate change adabtation

Water

Pollution

Circular economy

Biodiversity

Climate change migitation

Climate change adabtation

Water

Pollution

Circular economy

Biodiversity

Minimum safeguards

Proportion of Taxonomy aligned (A.1.) or eligible (A.2.) OpEx, year 2023

Category enabling activity

Category transitional activity

EUR million

%

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

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1 Environmentally sustainable activities (Taxonomy-aligned)

Cogeneration of heat/cool and power from bioenergy

CCM 4.20.

6.9

5%

Y

N/ EL

N/ EL

N/ EL

N/ EL

N/ EL

Y

Y

Y

Y

Y

Y

Y

4%

Production of heat/cool from bioenergy

CCM 4.24.

1.7

1%

Y

N/ EL

N/ EL

N/ EL

N/ EL

N/ EL

Y

Y

Y

Y

Y

Y

Y

OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1)

8.6

6%

6%

0%

0%

0%

0%

0%

Y

Y

Y

Y

Y

Y

Y

4%

Of which enabling

0.0

0%

0%

0%

0%

0%

0%

0%

Y

Y

Y

Y

Y

Y

Y

0%

Of which transitional

0%

0%

0%

A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)

EL; N/ EL

EL; N/ EL

EL; N/ EL

EL; N/ EL

EL; N/ EL

EL; N/ EL

Cogeneration of heat/cool and power from bioenergy

CCM 4.20.

2.4

2%

EL

N/ EL

N/ EL

N/ EL

N/ EL

N/ EL

3%

Production of heat/cool from bioenergy

CCM 4.24.

0.3

0%

EL

N/ EL

N/ EL

N/ EL

N/ EL

N/ EL

2%

Renovation of existing buildings

CE 3.2.

0.5

0%

N/ EL

N/ EL

N/ EL

N/ EL

EL

N/ EL

1%

OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2)

3.2

2%

2%

0%

0%

0%

0%

0%

6%

A. OpEx of Taxonomy eligible activities (A.1+A.2)

11.8

9%

8%

0%

0%

0%

0%

0%

10%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

OpEx of Taxonomy-non-eligible activities

124.4

91%

TOTAL

136.2

100%

Template 1 for the economic activities of certain energy sectors – Nuclear and fossil gas related activities

Row

Nuclear energy related activities

1.

The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facili- ties 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 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

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

40

Report of the Board of Directors | Metsä Board Annual review 2024

E1 – Climate change

Material impacts, risks and opportunities related to climate change mitigation and energy

Impacts

Risks and opportunities for Metsä Board

Management

Analysis from the perspective of IPCC’s 1.5 °C and 4.3 °C scenarios*

Greenhouse gas emissions in own operations

Metsä Board is a nationally significant producer of renew- able energy. The renewable bio-based fuels used by Metsä Board mainly consist of wood-based production side streams and logging residue.

Market opportunity: By producing and con- suming renewable energy, Metsä Board can replace fossil-based energy sources. Renewable energy already accounts for 74% of the energy used in Metsä Board’s production (Scope 1 and Scope 2). Most of the energy generated at Metsä Board is used in the company’s own production.

Metsä Board has set as its sustain- ability targets the improvement of energy efficiency and the transition to entirely fossil-free fuels, as well as fossil-free purchased electricity and heat, by the end of 2030. To achieve these targets, each of the company’s production units has a roadmap on the required actions.

Active dialogue with policymakers and other stakeholders develops the operating environment. Political in- fluence is discussed in greater detail under G1 – Business conduct .

Metsä Group has continued its study initiated in 2023 concerning techno- logical and business opportunities for capturing biogenic carbon dioxide and reusing it as raw material for bioproducts (BECCU).

Thanks to its large share of renewable energy and resource efficiency, Metsä Board can already offer customers prod- ucts with a competitive carbon footprint. The competitive advantage is greater in the 1.5 °C scenario, in which the carbon footprint influences purchase decisions more than in the 4.3 °C scenario.

In the long term, Metsä Group has a considerable opportunity to create BECCU business and introduce bio-based products replacing fossil-based materials on the market. This opportunity is greater in the 1.5 °C scenario than on the 4.3 °C track.

The climate neutrality of biogenic carbon dioxide is a key driver in BECCU value chain investments. Should the classification change, it could negatively affect companies’ investment appetite, making the 1.5 °C scenario more difficult to achieve.

Regulatory impacts, as well as risks and opportunities, are smaller in the 4.3 °C scenario.

The company’s biogenic carbon dioxide emissions are classified as carbon-neutral.

Regulatory opportunity: EU regulation recog- nises biogenic carbon capture and reuse as raw material as a key technology in climate change mitigation, and seeks to create market drivers and incentives for investments.

Metsä Board’s production causes climate-warming greenhouse gases. However, Scope 1 and Scope 2 carbon dioxide emissions have re- duced notably from the 2018 level.

Regulatory risk: Regulation sets significant requirements for new production technology reducing emissions or affects the status of biogenic carbon dioxide emissions in terms of climate neutrality. This may cause changes in the pricing of energy and greenhouse gas emis- sions, increasing expenses in both production and transport.

Greenhouse gas emissions in the upstream and downstream value chain

The emissions caused by the long transport distances of Metsä Board’s upstream and downstream value chain and some products (Scope 3) generate climate-warming greenhouse emissions.

Market opportunity: Metsä Board’s main raw material, wood, is mainly procured from Finnish and Swedish forests, keeping transport distanc- es moderate.

During the financial year, the cal- culation of Scope 3 emissions was further developed.

Suppliers are encouraged to set emissions reduction targets. In addition, joint emissions reduction projects are agreed with suppliers. They are related to Metsä Group’s strategic target of setting joint sustainability targets with partner suppliers.

By 2030, Metsä Group’s Wood Supply aims to have reduced fos- sil-based carbon dioxide emissions from wood supply in Finland by 30% from the 2022 level.

Active dialogue with policymakers and other stakeholders develops the operating environment.

Regulatory and market risks and oppor- tunities are greater in the 1.5 °C scenario than in the 4.3 °C scenario.

In the 4.3 °C scenario, the value chain’s motivation to produce and share infor- mation about emissions is low, making it more difficult to measure Scope 3 emissions and commit the value chain to emissions reductions than in the 1.5 °C scenario.

Regulatory and market risk: Regulation and customer requirements increase the demands to reduce greenhouse gas emissions in the value chain. A comprehensive identification, accurate measurement and reduction of climate impacts is more challenging in the value chain than in the company’s own operations. For example, 31% of Scope 3 emissions come from the end-of-life treatment of sold products.

Carbon balance of forests

Metsä Group provides its parent company Metsäliitto Cooperative’s owner-mem- bers with forest management services that support regen- erative forestry, promoting carbon storage in commercial forests. Metsä Group is devel- oping a calculation to verify the impact of wood supply and forest management on the carbon balance. In Finland, wood is mainly procured from owner-members’ forests, and owner-members own 32% of Finnish forests.

Market opportunity: Awareness of regenerative forestry increases and further boosts custom- ers’, consumers’ and other stakeholders’ trust in Metsä Board. Wood is Finland’s most significant processed natural resource, providing a good basis for the bioeconomy and circular economy, and innovations based on a renewable raw material.

Metsä Group’s regenerative for- estry strategy aims to measurably strengthen the state of nature by 2030. As part of regenerative forest- ry, strategic sustainability targets have been set for wood supply, the achievement of which increases carbon storage in commercial forests and promotes forest biodiversity.

The forest is quickly renewed after regeneration felling so that it can begin storing carbon more rapidly from the atmosphere.

The calculation and reporting of the carbon balance of forests is being developed in cooperation with forest owners and partners.

Resource-efficient use of raw materials avoids waste in production. The goal is to use all production side streams.

Active dialogue with policymakers and other stakeholders develops the operating environment and increases awareness of regenerative forestry.

Regulatory and market risks and oppor- tunities are greater in the 1.5 °C scenario than in the 4.3 °C scenario.

In the 4.3 °C scenario, information about forests’ carbon balance and products’ biogenic carbon storage is underutilized, weakening opportunities to extensively optimise the climate benefits of wood- based value chains and the related market opportunities.

Market and regulatory opportunity and risk: The development of voluntary carbon markets and EU regulation concerning the certification of carbon removals provide opportunities for im- proving forests’ carbon storage and tree growth through active forest management. However, the growth of voluntary carbon markets involves a risk of reduced wood raw material availability.

Regulatory risk: Regulation concerning the use of forests as carbon sinks and storage restricts felling volumes. Legislation will become fragmented, and it will fail to account for local conditions or all the other ecosystem services apart from carbon storage. This will lead to the partial optimisation of forest management from the perspective of ecosystem services.

Market risk: Consumers will become increas- ingly critical of forest use because they associ- ate wood consumption with the decrease in the carbon sinks and storage of forests. The size of this risk will be influenced by Metsä Group’s success in its regenerative forestry target and in mainstreaming related measures.

41

Report of the Board of Directors | Metsä Board Annual review 2024

Metsä Board’s 2030 sustainability targets

2030 target

2024

2023

2022

2018

Fossil-based carbon dioxide emissions (Scope 1 and Scope 2 market-based), t

0 tn

251 708

183 600

391 220

577 875

Share of target group suppliers with targets set in accordance with the SBTi by 2024 (Scope 3)¹⁾, %

70%

24

19

15

4.3

Improvement in energy efficiency from the 2018 level, %

+10%

+0.9

-5.8

+2.7

2.36 MWh/t

Fossil-free raw materials and packaging materials, share of dry tonnes, %

100%

98.9

98.8

98.8

-

Metsä Group’s 2030 sustainability targets

MG: Amount of carbon stored in wood products from the 2018 level, %

+30%

-25

-21

-12

1,651,505 t

MG: Amount of forest regeneration and young stand management from the 2018 level, %

+30%

+18

+14

+2.8

33,265 ha

MG: Amount of forest fertilisation from the 2018 level, %

+50%

-22

-26

-

9,115 ha

MG: Share of continuous cover forestry in peatland forest regeneration, %

30%

15

17

-

-

¹ ) In contrast with the other targets, the Scope 3 target year was 2024, and the base year was 2019. ² ) The wet pulp production line acquired by Metsä Board in Kemi in 2024 has not yet been factored into the water and energy efficiency target calculations.

MG: The target has been set at the level of Metsä Group. Comparative data has not been provided for all the new targets set in 2023. Information for 2018 is not disclosed in the case of fossil-free raw materials and packaging materials due to changes in calculation. Further details can be found under Reporting principles for metrics.

Metsä Board’s 2030 sustainability targets, and their setting and moni- toring, are discussed in greater detail under Sustainability governance and strategy and Material sustainability-related impacts, risks and opportunities .

The company’s targets for reducing greenhouse gas emissions (Scope 1 and Scope 2) have been approved by the Science Based Targets initiative, and they meet the strictest requirements of the Paris Agreement, aimed at limiting global warming to 1.5 degrees. In 2019, Metsä Board also set the target that 70% of the suppliers belonging to the company’s target group would set GHG emissions reduction targets in accordance with the SBTi by the end of 2024. In 2024, the actual figure was 24%. In accordance with the EU’s Corporate Sustainability Due Diligence Directive, Metsä Board is preparing to set an absolute Scope 3 emissions reduction target and thus a total emissions reduction target (Scope 1, Scope 2 and Scope 3) in accord- ance with the Paris Agreement no later than 2027. The guidelines on the Directive’s application and its national implementation are still underway.

Progress in targets

Fossil-based carbon dioxide emissions (Scope 1 and Scope 2, mar- ket-based) − Investments and energy efficiency measures along with a moderate production level slightly reduced Scope 1 emissions. Scope 2 emissions increased clearly from the previous year due to higher energy consumption. Nevertheless, the emissions level complied with the 2030 target plans. Overall, fossil-based carbon dioxide emissions (Scope 1 and Scope 2 market-based) have decreased by 56% from the 2018 level.

Share of target group suppliers with targets set in accordance with the SBTi by 2024 (Scope 3) – In 2024, the realisation of the target was 24%. The company is preparing to set a new target.

Improvement in energy efficiency from the 2018 level – In 2024, energy efficiency improved from the previous year due to higher production at mills. In addition, 17 energy efficiency projects were carried out during 2024. However, production curtailments due to the market situation kept energy efficiency development at a moderate level. Furthermore, the gas explosion at Metsä Fibre’s Kemi bioproduct mill caused a long production outage at Metsä Board’s Kemi board mill.

Fossil-free raw materials and packaging materials, share of dry tonnes – The share of fossil-free raw materials and packaging materials

of dry tonnes remained at a good level, with nearly all the raw materials and packaging materials being fossil-free.

The identification and assessment of material impacts, risks and opportunities

Metsä Board’s climate risks were assessed in 2024 as part of Metsä Group’s climate risk analysis, which covered the physical risks, transition risks and opportunities in the company’s own operations and value chain. Metsä Group’s internal climate risk workshops were attended by specialists and management from Metsä Board and Metsä Group’s other business areas and functions. Two IPCC climate scenarios (RCP 1.9 and RCP 8.5), reports of the Finnish Meteorological Institute and scientific articles were used in the analysis. In the RCP 1.9 scenario, the increase in the world’s mean temperature is limited to 1.5 °C, and in the RCP 8.5 scenario, emissions continue to increase at the current pace, and the world’s mean temperature increases on average by 4.3 °C by 2100. The analysis included a short-term (less than one year), medium-term (1−5 years) and long-term (more than 5 years) review. The time horizons have been considered in terms of the production units’ operating lifetime. Production units are designed to operate for a long time, and their life-cycle exceeds the time horizons employed. They are therefore not discussed in greater detail. Metsä Group’s ongoing lobbying work and the related analysis of the operating environment played a key role in the assessment of transition risks. The physical climate risks of Metsä Board’s production units and key supply chains were analysed by an external partner. The analysis was carried out using geolocation-based modelling and various climate scenarios. In addition to the present day, the analysis covered 2030 and 2040. The results of the analysis did not highlight any significant risks related to Metsä Board’s production units. Based on this, the location of Metsä Board’s production units supports the company’s competitiveness in the face of climate change. The results of the climate risk and scenario analysis are presented in the table on page 45. The results of the climate risk analysis are included in the company’s double materiality assessment. The materiality assessment is discussed on page 26–28.

Ensuring undisturbed and uninterrupted operations in all conditions is key in the risk assessment of production units. The assessment process of

43

Report of the Board of Directors | Metsä Board Annual review 2024

Transition plan for climate change mitigation

Sub-field

Key actions and related targets

Products

Metsä Board’s paperboards can help Metsä Board’s customers, such as brand owners, achieve their own targets for climate change mitiga- tion. Climate benefits are verified with life-cycle calculations. Transitioning to a low-carbon economy will increase demand for climate-resil- ient products. Paperboard can replace materials made from fossil-based raw materials and/or the production of which generates substantial amounts of fossil-based emissions. The company aims for entirely fossil-free production and packaging materials by the end of 2030. The progress made in the targets is discussed under E1 Metsä Board’s 2030 Targets.

Research and development

R&D&I activities play a key role in the climate transition across the value chain. Development focuses on the properties of current products, new wood-based bioproduct innovations alongside traditional forest products, and production technologies. Metsä Board continues to devel- op dispersion-coated paperboards that can reduce plastic use and improve packaging recyclability.

In 2024, the technological and energy implications of wide-scale biogenic carbon capture from the flue gases of bioproduct mills were exam- ined for the first time at Metsä Group. Should carbon capture prove viable, the forest industry could gain a new high-volume wood-based raw material as a suitable replacement for fossil-based raw materials in the chemical industry, for example.

Use of renewable energy, minimi- sation of fossil-based emissions, continuous improvement of resource efficiency and material cycles

Metsä Board has set itself absolute 2030 emission reduction targets for Scope 1 and Scope 2 emission categories. It aims for fully fossil-free production, which means reducing fossil-based Scope 1 and Scope 2 carbon dioxide emissions to zero by the end of 2030. After abandoning fossil fuels, only biogenic greenhouse gases are left, most of which is biogenic carbon dioxide, classified as climate neutral in the EU criteria. In addition, wood-based energy generates small amounts of biogenic methane and nitrous oxide, which, according to the ESRS definition, are included in Scope 1 and Scope 2 emissions along with fossil-based GHGs.

To achieve the target, Metsä Board has a plan for investments and actions to replace fossil-based fuels and purchase energy from fossil-free sources. Metsä Board is also investing in the efficient use of energy, water and materials. New investments are planned with a high level of au- tomation and the best available technology in mind. It is impossible to calculate the exact capital expenditure for climate measures because some of the costs are indirect and are incurred as part of other investments. In recent years, the key investments for achieving fossil-free production have been the renewal of the recovery boiler and turbine at the Husum pulp mill and the renewal of the turbine at the Kyro board mill. The total capital expenditure of these investments is approximately EUR 420 million. Among other things, future investments include the electrification of the mills’ boilers and processes that still use fossil fuels. Metsä Board’s taxonomy-aligned turnover, capital expenditure and operating expenditure are discussed in the section the EU Taxonomy. The Taxonomy’s technical screening criteria do not currently cover Metsä Board’s core business. Taxonomy-eligible economic activities therefore account for only a minor share of turnover and are not fully in line with the investments included in the transition plan. In 2024, Metsä Board assessed the physical climate risks of all its production units and improved its taxonomy alignment. In 2024, the company’s taxonomy-aligned activities were related to the generation of heat, cooling and power from bioenergy. These activities promote the use of renewable energy in the transition plan. Metsä Board had no investments in coal, oil or gas in 2024.

The emission reduction targets are approved by the Science Based Targets initiative (SBTi), and they support the Paris Agreement’s objec- tive of limiting global warming to no more than 1.5 °C above pre-industrial levels. The targets also contribute to the company’s adaptation to a low-carbon future. No internationally recognised sector-specific decarbonisation development path is currently available for Metsä Group’s industry, the forest industry. Metsä Group has not yet set any official post-2030 emission reduction targets, but planning of the 2050 1.5 °C net zero pathway in accordance with the Paris Agreement is underway, particularly regarding Scope 3 emissions. Concerning fossil-based Scope 1 and Scope 2 carbon dioxide emissions, the target is zero as soon as the end of 2030. A net zero target will be set in the near future and no later than 2027. Metsä Group will come under the scope of the EU’s new Corporate Sustainability Due Diligence Directive in July 2027. The Directive requires companies to have a transition path aiming for net zero by 2050. The Directive’s national implementation is underway. The EU Commission is expected to release additional guidelines on the Directive’s application.

Metsä Board does not use carbon units purchased outside the value chain to offset or balance emissions. Metsä Board follows the develop- ment of voluntary carbon markets, including the EU’s regulation on carbon removal certification (CRCF). They will play a role in balancing Scope 3 residual emissions when working towards the 2050 net zero target.

Cooperation and impact manage- ment in the value chain

In accordance with the target set by Metsä Board in 2019, 70% of the suppliers belonging to the company’s target group should set GHG emission reduction targets in accordance with the SBTi by the end of 2024. In 2024, 24% had done so.

In accordance with the EU’s Corporate Sustainability Due Diligence Directive, Metsä Board is preparing to set an absolute Scope 3 emissions reduction target and thus a total emissions reduction target (Scope 1, Scope 2 and Scope 3) in accordance with the Paris Agreement no later than 2027. The guidelines on the Directive’s application and its national implementation are still underway. Currently, Metsä Board’s Scope 3 target does not comply with the 1.5 °C trajectory. What makes determining Scope 3 emissions challenging is that while Metsä Board can produce products with an increasingly low carbon footprint by investing in new resource-efficient and environmentally efficient production units and the renewal of mills to reduce their emissions, these investments increase Scope 3 emissions.

In late 2024, Metsä Group set as its target to reduce GHG emissions in category 4, ‘Upstream transport and distribution’, by 30% per tonne produced by 2030. The target’s baseline year is 2022, and the target will be in force as of 2025, after which information about it will be reported in greater detail. Metsä Group has also agreed to joint sustainability targets, many of which concern reducing GHG emissions, with its partner suppliers.

Safeguarding nature’s capacity for renewal and developing regenerative forestry

Metsä Group’s Wood Supply and Forest Services, which also handle Metsä Board’s wood supply, provide forest services for climate change mitigation and adaptation to Metsäliitto Cooperative’s owner-members as part of the regenerative forestry strategy. In Finnish forestry, wood production does not involve land-use change, as production is based on native tree species and is part of the natural forest ecosystem, which also offers various other ecosystem services. Metsä Group also promotes regenerative land use in its mill areas. Further information on biodiversity actions is provided under E4 – Biodiversity and ecosystems .

Employee commitment

Metsä Board’s Board of Directors is the company’s highest body overseeing sustainability. Metsä Board’s CEO is in charge of the implemen- tation of sustainability measures in accordance with the Board’s instructions. To ensure the sustainability and responsibility of its business, Metsä Board uses remuneration to support the achievement of its strategic, operational and sustainability targets. At least one sustainability target is included in the annual targets of the CEO, other Corporate Management Team members and other employees, which are used as the bases for annual bonuses.

All Metsä Board employees complete an e-learning course on the basics of sustainability. Climate themes are a central element of the course. An important part of the strategy’s implementation is the development of core competence important to the company. Metsä Group’s Academy concept has been developed for this purpose. In 2024, the concept encompassed Academies for sustainability, sales, procurement, leadership and finance. Climate-related topics are of key importance in the Sustainability Academy, and they are also discussed in other academies and leadership programmes.

45

No such assets at Metsä Board’s production units have been identified that could be subject to a material transition risk or might lose value due to regulation related to the green transition (stranded assets). Metsä Board’s production still generates fossil-based carbon dioxide emissions, but the company aims for fossil-free production by 2030. After this, production will no longer be locked to fossil-based carbon dioxide emissions. However, a small amount of biogenic greenhouse gases that are included in the Scope 1 and Scope 2 framework will still be generated.

Metsä Board is not significantly involved in sectors posing a substantial transition risk, such as the coal, gas or oil industries. Metsä Board’s main transition risks are related to regulation concerning forest use and wood- based energy, the potential impact of which could increase costs in the long term.

Metsä Board is in the scope of the EU Emissions Trading System (ETS). In internal carbon pricing, the average ETS emission allowance price for each year is used in the production units’ profit and expense entries. In addition, shadow prices determined based on ETS prices are applied for carbon dioxide in investment calculations. No estimate has been made of the share of emissions to which shadow pricing is applied. The price is determined annually, and for investments in a specific year, the price for that year is used. The price remains the same across the investment period. The company does not disclose the carbon price or related assumptions, as it considers this to be critical and strategically sensitive information for its business.

In 2024, a total of 385,197 tonnes of free emission allowances under the EU ETS was allocated to Metsä Board’s mills. The amount does not include the allocations for Kemi and Joutseno, which were not available at the time of reporting. It is expected that after 2025, free allowances will no longer be allocated to mills at which sustainable biomass incineration accounted for, on average, more than 95% of the mill’s GHG emissions in 2019−2023. The EU Emissions Trading Systems is being updated, and based on current knowledge, free emission allowances will be phased out entirely after 2030. Emissions allowances are discussed in more detail in the consolidated financial statements under Intangible assets .

Regarding the economic opportunities of low-carbon products, Metsä Board’s existing paperboard packaging especially can be used to replace fossil-based alternatives. Potential future products will be targeted at the very big global packaging market. Carbon capture opportunities can be found in larger pulp mills where carbon dioxide generated can be used in the chemical industry and hydrogen economy.

Energy consumption and combination of energy sources

MWh

2024

2023

FUELS

Oil

240,897

310,423

Gas

434,125

412,864

Coal

0

0

Waste

71,382

43,825

Peat

17,306

17,829

Wood-based fuels

5,441,356

5,010,322

PURCHASED ENERGY

Purchased electricity and heat, renewable wood-based

595,710

667,468

Purchased electricity and heat, other renewable

67,832

7,543

Purchased electricity and heat, fossil-based

138,860

18,763

Purchased electricity and heat, nuclear power

1,214,984

1,200,337

CONSUMPTION OF OTHER SELF-GENERATED RENEWABLE ENERGY

Consumption of self-generated hydropower

30,010

29,349

TOTAL ENERGY CONSUMPTION

Total energy consumption,

renewable, wood-based

6,037,066

5,677,790

Total energy consumption,

other renewable

97,842

36,892

Total energy consumption, fossil-based

902,570

803,704

Total energy consumption, nuclear

1,214,984

1,200,337

Total energy consumed

8,252,462

7,718,722

ENERGY INTENSITY (MWh/turnover)

Energy intensity

0.004

0.004

The 2023 figures were revised retroactively by leaving the amount of energy sold unde- ducted from total energy consumption.

The turnover used in energy intensity calculations can be found in the consolidated financial statements under Consolidated statement of comprehensive income. Turnover is reported in euros.

Energy consumption by energy source

%

2024

2023

Renewable, wood-based

73

74

Other renewable energy

1.2

0.5

Nuclear power

15

16

Fossil-based fuels

11

10

Energy generation

MWh

2024

2023

Self-generated energy, renewable

4,840,823

4,491,331

Self-generated energy, fossil-based

417,213

473,304

48

Report of the Board of Directors | Metsä Board Annual review 2024

GHG emissions

2024

2023

Change % (2024/2023)

Scope 1 GHG emissions

Gross Scope 1 GHG emissions (tCO 2 eq)

192,098

202,227

-5.0%

Percentage of Scope 1 GHG emissions from regulated emission trading schemes (%)

100

100

0%

Scope 2 GHG emissions

Gross location-based Scope 2 GHG emissions (tCO 2 eq)

259,495

299,365

-13%

Gross market-based Scope 2 GHG emissions (tCO 2 eq)

84,989

3,747

2,168%

Significant Scope 3 GHG emissions

Total Gross indirect (Scope 3) GHG emissions (tCO 2 eq)

1,789,138

1,792,006

-0.2%

1 Purchased goods and services

485,533

479,875

1.2%

2 Capital goods

27,746

57,651

-52%

3 Fuel and energy-related Activities (not included in Scope1 or Scope 2)

73,778

57,772

28%

4 Upstream transportation and distribution

300,233

282,264

6.4%

5 Waste generated in operations

727

2,919

-75%

6 Business traveling

937

813

15%

7 Employee commuting

1,926

1,889

1.9%

9 Downstream transportation

7,304

4,732

54%

10 Processing of sold products

275,061

268,042

2.6%

11 Use of sold products

1,846

890

107%

12 End-of-life treatment of sold products

563,093

582,863

-3.4%

15 Investments

50,954

52,294

-2.6%

Total GHG emissions

Total GHG emissions (location-based) (tCO 2 eq)

2,240,731

2,293,598

-2.3%

Total GHG emissions (market-based) (tCO 2 eq)

2,066,225

1,997,980

3.4%

For Scope 1 and 2 emissions, neither the base year nor the target year has been reported, as Metsä Board’s emission reduction target only concerns fossil carbon dioxide emis- sions. In 2024, Metsä Board’s Scope 3 target focused on engaging suppliers within the target group. Metsä Board is preparing to set an absolute Scope 3 emission reduction target by 2027 at the latest. More information about the targets can be found in the E1 Climate Change section of Metsä Board’s 2030 sustainability targets and the Climate Change Mitigation Transition Plan table.

GHG intensity

2024

2023

GHG intensity based on turnover, Scopes 1, 2, 3 (market-based), tCO 2 e / euros

0.001

0.001

GHG intensity based on turnover, Scopes 1, 2, 3 (location-based), tCO 2 e / euros

0.001

0.001

GHG intensity based on turnover, Scopes 1 and 2 (market-based), tCO 2 e / euros

0.0001

0.0001

GHG intensity based on turnover, Scopes 1 and 2 (location-based), tCO 2 e / euros

0.0002

0.0003

GHG intensity based on production, Scopes 1 and 2 (market-based), tCO 2 e / t

0.1

0.09

GHG intensity based on production, Scopes 1 and 2 (location-based), tCO 2 e / t

0.2

0.2

The turnover used in emissions intensity calculations can be found in the consolidated financial statements under Consolidated statement of comprehensive income. Turnover is reported in euros.

Wood-based biogenic carbon dioxide emissions

tCO 2

2024

2023

Wood-based biogenic carbon dioxide emissions

2,154,777

1,984,088

GHG emissions reduction targets

This table presents the actions carried out and planned future actions, as well as the esti- mated volumes required to achieve the Scope 1 and Scope 2 emissions reduction target.

Baseline

year

Reduction target

by 2030

GHG emissions (tCO 2 )

576,355

0

Fuel replacement

-188,900

Electrification

-560

Fuel replacement or electrification

-136,210

Transition to fossil-free purchased electricity

-237,805

Others

-12,880

Fuel replacement means replacing a fossil fuel with a fossil-free fuel. Electrification means replacing a fossil fuel by electrifying the process. The decision on fuel replacement or elec- trification has yet to be made for all emissions reductions. These are indicated under the category ‘Fuel replacement or electrification’. The ‘Others’ category includes other smaller reduction measures such as energy-efficiency measures.

49

E2 – Pollution

Pollution-related impacts, risks and opportunities

Impacts

Risks and opportunities for Metsä Board

Management

Pollution of air, water and soil

In addition to GHG emissions, Metsä Board’s production generates other emissions to air. Most of the emissions to air originate in the production units’ and power plants’ combustion process. Metsä Board’s production also generates wastewater discharges. The re- porting year’s emissions to air and water and environmental permit deviations at production units are presented in this section’s tables. Several deviations from environmental permit emission limits – es- pecially in the same mill areas – could be harmful to the environ- ment. The company has environmental liabilities related to former activities on industrial sites that have since been closed, sold or leased, and from decommissioned landfill sites. The emission load on small waters and waterbodies caused by Metsä Group’s wood supply is discussed in section E4 – Biodiversity and ecosystem s .

Air, water and soil pollution may occur as a result of technical defects or human errors in Metsä Board’s or its service providers’ operations.

Risk: Deviations in emissions may cause a liability to pay compensation and costs from corrective action. In addition, Metsä Board’s reputation as a sustainable opera- tor may suffer.

Emissions to air are reduced with a meticulous control of the combustion processes and the purifi- cation of flue gases.

Emissions to water are reduced through reduced water use, more efficient processes and efficient wastewater treatment.

The best available techniques are used and sys- tematically operated in production. Environmental performance is monitored continuously. Proactive measures aimed at preventing interruptions in- clude comprehensive preventive maintenance and observations in production.

Any deviations in emissions and related cor- rective actions are immediately reported to the authorities.

Production is concentrated in countries where en- vironmental legislation requirements are stringent.

Opportunity: The use of the best available techniques and certified management sys- tems are verifiable proof of the minimising of emissions to customer s.

Microplastics

Metsä Board’s products, produced mainly from renewable raw materials, are an alternative to plastic packaging and enable the reduction of microplastics.

Opportunity : Demand for Metsä Board’s products increases.

Nearly all Metsä Board’s raw materials are fos- sil-free. Active research and development is being conducted to replace the remaining fossil-based raw materials

    Positive impact on the environment and society or on Metsä Board’s business

    Negative impact on the environment and society or on Metsä Board’s business

Targets

Metsä Board does not have internal targets related to pollution, but the Environmental Protection Act and the emission limits defined in the production units’ environmental permits guide operations and thus encourage environmental pollution to be proactively prevented or limited to a minimum. The emissions-related permit conditions set for individual production units are also the internal targets of each production unit. In accordance with the environmental policy, negative environmental impacts are minimised and environmental efficiency is improved by developing operations in compliance with the principles of sustainability and continu- ous improvement.

The identification and assessment of material impacts, risks and opportunities

The material impacts, risks and opportunities related to pollution have been identified in a double materiality assessment based on the principles of the company’s risk management process. The materiality assessment is discussed on pages 26–28 .

Ensuring undisturbed and uninterrupted operations in all conditions is key in the risk assessment of production units. The assessment process of production units’ environmental risks is guided by the ISO 14001 and ISO 50001 management systems. The key identified risks are included in the company-level risk management process.

The pollution-related impacts of production units are assessed in connection with the environmental impact assessments of investment projects and during the environmental permit processes, for example. The need for environmental impact assessments is determined by the local EIA authority.

After an environmental impact assessment and environmental permit process, the production units operate in accordance with their

environmental permit and the company’s operational management system.

Local communities have a statutory right to participate in the production units’ environmental permit processes by issuing reminders and opinions related to the permit application. Reminders and opinions are taken into account in the permit process. The production units also receive feedback from local communities to which they respond, and which they record in the HSEQ system. Some production units organise open house events and town hall-style meetings where the mill’s environmental matters are discussed.

Policies

Most of Metsä Board’s emissions to air originate in the pulp mills’ and power plants’ combustion process. The primary emissions are carbon dioxide, sulphur dioxide, nitrogen oxides and particles. Small amounts of reduced sulphur compounds are also generated at pulp mills. Their amounts are reduced with the meticulous control of combustion processes and purification of flue gases.

Wastewater discharges primarily consist of nutrients (phosphorus and nitrogen), organic substances measured as chemical and biological oxygen demand, as well as suspended solids. The wastewaters of pulp production also contain organic chlorine compounds, sodium and sulphates. Emis- sions to water are reduced by reducing water use, making processes more efficient and using efficient abatement technology.

The company generates very small amounts of heavy metal emissions to water and air, and most of the substances such as zinc and nickel originate from the wood raw material. Metsä Board’s normal operations do not generate emissions to soil containing heavy metals.

In Metsä Group’s environmental policy, Metsä Board is committed to protecting the environment and ensuring chemical safety, preventing

52

Emissions to air

tn

2024

2023

Sulphur (SO 2 )

184

176

Nitrogen oxides (NO X )

1,363

1,285

Particles (PM2.5)

33

55

kg

2024

Ammonia (NH 3 )

59,360

The table includes only the emissions from those production facilities that exceed the facility-specific threshold value defined in Annex II of Regulation (EC) No 166/2006. Data for the comparison year is not available.

Emissions to water

tn

2024

2023

Nitrogen (N)

156

165

Adsorbable organic halogen (AOX)

45

47

Chemical oxygen demand (COD)

9,743

10,645

Biological oxygen demand (BOD)

635

840

Phosphorus (P)

22

23

kg

2024

Arsenic (As)

29

Cadmium (Cd)

148

Chromium (Cr)

60

Copper (Cu)

204

Quicksilver (Hg)

31

Nickel (Ni)

2,566

The table includes only the emissions from those production facilities that exceed the facility-specific threshold value defined in Annex II of Regulation (EC) No 166/2006. Data for the comparison year is not available.

Environmental permit deviations at Metsä Board’s mills

Mill

Date of incident

Incident

Corrective actions

Simpele

4/2024

Wastewater nitrogen emission exceeded the permit limit

More precise nutrient dosage during shutdown at the treatment plant

Kyro

6/2024

CO 2 emissions exceeded the daily permit limit

Complaint to fuel supplier

Äänekoski

9/2024

Suspended solids reduction was below the permit limit

More precise process adjustment

Reporting principles for metrics

Emissions to water and air include the material emissions from Metsä Board’s production units. Emissions are also reported to the authorities.

Water discharges are determined based on laboratory meas- urements. Emissions to water are calculated as a combination of waterflows and concentrations. Any wastewater discharges of third parties handled in the wastewater treatment plants are excluded from reporting. Emissions to air are determined based on continuous and/or one-off measurements. The final emissions are calculated as a combination of airflows and concentrations.

Emissions are allocated to internal and external inflows by first making an assumption, based on prior measurements, of the reduction in chemical oxygen demand (COD) for each inflow, and later adjusting them to correspond to the unit’s actual COD reduction. Other emissions are allocated based on the flow. At integrated mills, the amount of COD is allocated to parties using the wastewater treatment plant based on the quality of COD. Discharges fed through external (usually municipal) wastewater treatment plants are taken into account with the assumption of an 85% reduction in COD.

Limitations of measurements based on flow measurements are discussed under E3 – Water and marine resources .

Biological oxygen demand (BOD) and emissions of phosphorus and suspended solids are calculated based on the flow, using the following residual concentrations: BOD 10 mg/l, total phosphorus 0.5 mg/l and suspended solids 10 mg/l. Total nitrogen emissions are considered to be zero, as municipal wastewater contains excess nitrogen, and the reduction of BOD binds nitrogen to bio- mass, reducing the unit’s total nitrogen emissions. A seven-day measuring period (BOD7) is used to determine BOD.

The metrics have not been validated by an external party.

54

Report of the Board of Directors | Metsä Board Annual review 2024

Financial effects

As Metsä Board’s production units are located in areas at low water risk, no water-related expected economic impacts were identified in the materiality assessment or in the analysis of climate change-induced physical risks conducted as part of the materiality assessment. The production units’ close proximity to abundant surface water reserves is an opportunity for the company in the management of climate-change-induced physical risks, for example. Increasing the efficiency of water use also affects energy efficiency, thus enabling cost savings.

Water withdrawals and consumption and wastewater discharges

1 000 m 3

2024

2023

WATER WITHDRAWALS

Surface water

105,796

101,884

Groundwater

33

58

Total water withdrawals

105,829

101,943

WATER CONSUMPTION

Water consumption

5,189

3,874

WATER INTENSITY (water consumption m 3 /turnover)

Water intensity

0.003

0.002

WASTEWATER

Wastewater discharges

48,540

45,380

The turnover used in water intensity calculations can be found in the financial statements under Consolidated statement of comprehensive income. Turnover is reported in euros.

Reporting principles for metrics

Water withdrawals include the water withdrawn at Metsä Board’s production units for production and cooling.

Water consumption is an estimate of the amount of water that has evaporated in production and wastewater treatment, and water bound in products and wastewater treatment sludge. The calculation is based on an estimate, which considers the matters mentioned above, as well as direct water withdrawal, the water contained in raw materials and the water returned to waterbodies.

Process water means the water moved from the product production process to wastewater treatment. Process water use per tonne produced is based on continuous measurements and is calculated from the process water used as cubic metres per tonne of product produced.

The figure for the reduction of process water use has been retro- actively revised for the comparison years, as a mistake was found in the 2018 water figures. The figure for 2018 was revised from 20.8 m 3 /tonne to 20.5 m 3 /tonne, leading to the reduction in 2022 being revised from the previously reported -12% to -11%, and the reduction in 2023 from the previously reported +2.0% to +3.5%.

Wastewater is water returned to waterbodies after the wastewa- ter treatment process. In addition to process water, the volume of treated wastewater includes the water from wastewater treatment.

At Metsä Board’s production units, the flow of wastewater discharges is determined with continuous flow meters. The measurement of wastewater load is described in more detail on page 56.

Measurements based on flow meters carry a margin of error. However, the flow meters are regularly calibrated, and the meas- urement results are also controlled by the supervisory authority.

The volume of stored water is not disclosed due to non-material- ity: as a rule, water is not stored.

The metrics have not been validated by an external party.

57

uses in its products is mainly procured from Finland, Sweden and the Baltic countries. A breakdown of wood supply by country is presented in the table under G1 – Business conduct . Metsä Group requires all its partners to comply with legislation, and operations adhere to the European Timber Regulation (EUTR), US Lacey Act and UK Timber Regulation (UKTR). In 2024, Metsä Group updated its due diligence system to comply with the requirements of the EU’s Deforestation Regulation (EUDR). Wood supply is described in greater detail under G1 – Business conduct .

Metsä Group’s Wood Supply also considers the impacts of its operations on its key stakeholders, including forest owners, mill locations and their residents, nature, and people who earn their livelihood from nature, such as indigenous peoples (the Sámi), as well as other parties interested in the environment, such as NGOs. In the home region of the Sámi, Metsä Group engages in local dialogue about the coordination of reindeer husbandry and forestry with key stakeholders such as forest owners and reindeer owners’ associations. Communication with the Sámi is typically related to practical questions. Reindeer owners’ associations in the home region of the Sámi have been identified as a local community to be engaged with.

Production units

Environmental management and the maintenance of environmental per- formance are guided by the requirements of the production units’ certified quality, environmental management and energy management systems, as well as the principles of environmental management. The production units conduct planned internal and external audits in accordance with the ISO 14001 and ISO 50001 standards.

Metsä Group has set as its target the strengthening of the state of nature in its operations by 2030, including on the sites of its production units. Metsä Group’s regenerative land-use principles guide the achievement of the targets in industrial environments. The goal is to make the improve- ment of biodiversity on production unit sites part of the production units’ operations and reporting. The production units’ biodiversity roadmaps are discussed under Actions .

Policies related to water use and water discharges are described under E2 – Pollution and E3 – Water and marine resources . The engagement of local communities in the production units’ operations from an environmen- tal perspective is discussed under E2 – Pollution .

Actions

Actions related to climate change mitigation and adaptation, as well as pollution, are discussed under E1 – Climate change and E2 – Pollution .

Wood supply and forest management services

Wood raw material is used as efficiently as possible, ensuring high added value and minimising the forest area needed for harvesting. The utilisation of side streams is described in greater detail under E5 – Resource use and circular economy .

The targets of regenerative forestry are discussed under Policies. In the regenerative forestry programme, monitoring systems are developed jointly with stakeholders so that the impacts of operations on the state of nature can be measured and disclosed.

Forest and nature management and the harvesting methods used are based on recent research, and Metsä Group cooperates actively with a diverse research community. Some of the key biodiversity-promoting

measures that follow the principles of regenerative forestry include the following:

Wood is procured only from certified forests or sources of controlled origin. Metsä Group actively participates in the development of the worldwide PEFC and FSC standards. Owner-members are offered the opportunity to certify their forests under the PEFC and FSC systems, and a higher price is paid for certified wood.

For industrial use, Metsä Group only procures tree species naturally occurring in the area – that is, spruce, pine, silver birch, downy birch and aspen. In their natural range and suitable growth sites, trees live in interaction with other species.

Mixed forests increase forest biodiversity and forest resilience against storm and insect damage, for example. Metsä Group offers forest owners a forest regeneration service in which both spruce and pine are planted in the same area. Broad-leaved trees such as birch, which spreads to stands naturally, must also be retained in forests.

Decaying wood is increased by retaining dead trees, preferably leaving retention trees in groups, and making high biodiversity stumps during thinning and regeneration felling.

Nature management measures in herb-rich forests and voluntary protection of the best sites are recommended for forest owners. Nature management measures thus focus on places where they have the greatest impact on biodiversity. Protective thickets are left for animals at all stages of forest management.

Metsä Group’s nature site service helps focus the protection required by FSC on the sites most valuable in terms of nature.

Buffer zones along waterbodies promote biodiversity and prevent the runoff of soil and nutrients. A buffer zone is a strip along the waterbody where forest management measures are performed more lightly or omitted completely.

Continuous cover forestry is chosen on sites for which it is suited.

A very tangible example of the practical implementation of regenerative forestry measures is the Metsä Group Plus service, which is a forest man- agement model designed for Metsäliitto Cooperative’s owner-members. In the model, measures that safeguard and improve the state of forest nature more comprehensively than current standard practices are agreed in con- nection with wood trade and orders for young stand management. Under the model, more retention trees are left, and more high biodiversity stumps are made per hectare during felling. To accelerate the creation of decaying wood and to secure the living conditions of species that inhabit burnt environments, more retention trees will be burned. In valuable habitats and littoral forests, the service represents the highest level of requirements currently in use. Metsä Group pays a bonus per hectare for Metsä Group Plus wood to compensate any loss of wood trade income caused by the additional measures. The service was introduced in 2023, and in 2024, 21% of wood trade took place under the Metsä Group Plus agreement. The costs incurred from the service are not reported because they are sensitive information.

Metsä Group has actively participated in drawing up a biodiversity roadmap for the wood processing industry in cooperation with other operators. As part of the roadmap work, a harmonised and standardised monitoring system is being developed for measuring and monitoring the impacts on biodiversity. In 2024, Natural Resources Institute Finland drew up calculations on the state of forest nature and its development

62

Impact metrics related to changes in biodiversity and ecosystems

The 2030 targets providing a measure of the actions are described in the table Metsä Group’s 2030 sustainability targets for wood supply . Emissions to air and water discharges are discussed under E2 – Pollution . Metrics of the state of forest nature, their reliability and a harmonised monitoring sys- tem are developed as a collaborative industry effort and to achieve Metsä Group’s own targets. Further information can be found under Actions .

Financial effects

The risks related to biodiversity and ecosystems are presented in the table on pages 58–59. As Metsä Group does not own forest important for its wood supply, the risks related to biodiversity and ecosystems do not affect its assets. If the risks were to be realised, they would affect Metsä Board in the long term through the availability and cost of wood raw material.

Reporting principles for metrics

The calculation of high biodiversity stumps left on harvesting sites covers the direct standing sales carried out by Metsä Group’s Wood Supply and Forest Services. The harvesting sites include intermediate and regeneration felling sites. The calculation of retention trees left on regeneration felling sites covers the direct standing sales carried out. Forest certification criteria set minimum requirements for the number of retention trees. The calculation is based on the number of regeneration felling sites. Stands containing only spruce after young stand management include the young stand management work carried out. The calculation takes spruce-dominated sites into account where spruce amounts to more than 50% of the remaining trees. Spruce is considered to be the only tree species if other species account for less than 10% on the site.

The number of measures promoting biodiversity is calculated based on the measures carried out in owner-members’ forests. The measures that are currently monitored include nature management measures in herb-rich forests, burned retention trees, Metsä Group’s nature site service and the number of Metsä Group Plus agreements.

Metsä Group develops metrics for the state of forest nature, their reliability and a harmonised monitoring system. The development of metrics is described in more detail under Actions .

The metrics have not been validated by an external party.

64

to waste management companies whose operations are subject to envi- ronmental permits for processing or disposal. The sustainability of waste management operators is ensured in supply agreements.

The main process waste components are green liquor dregs generated in pulp production and ash, which is generated in energy production. As part of Metsä Group, Metsä Board is actively seeking industrial applications for green liquor dregs by conducting its own research and pilot projects, and participating in universities’ jointly funded research projects.

Jointly with Soilfood, Metsä Board is studying the utilisation of fibre- based side streams from paperboard mills in animal bedding. Novel bedding fibres are a renewable alternative for peat, commonly used as animal farms.

In addition, Metsä Group is running several projects dealing with the recovery and use of production side streams. In 2024, Metsä Group committed to the national circular economy green deal. The participants set targets up to 2035 and commit to actions that promote a low-carbon circular economy.

Financial effects

The impacts, risks and opportunities concerning resource use and the circular economy identified in the material assessment are presented in the table on page 65, and the time horizons used in their assessment are described on page 27. The main known or reasonably expected economic impacts related to side streams concern emission rights and wood-based energy use, which are discussed under E1 – Climate change . Other potential additional costs are related to the increased utilisation of side streams, which, on the other hand, offers cost savings through reduced landfill management fees.

When developing new concepts promoting efficient resource use and the circular economy, their economic impacts on the company’s business are continuously monitored through cost-benefit analyses and scenario analyses, combined with roadmaps using economic calculation methods. Proposed investments are assessed while considering strategic advan- tages and financial performance measures.

A more detailed discussion of potential future products for the packaging market and carbon capture as opportunities related to resource use and the circular economy can be found under E1 – Climate change .

Inflows of material and energy

Wood-based raw materials, 1,000 t

2024

2023

Wood

4,292

3,505

Purchased pulp

345

373

Recycled fibre

0

0

The share of certified wood fibre is disclosed under G1 – Business conduct .

Other raw materials, 1,000 t

2024

2023

Process chemicals

31

28

Coatings, binders and pigments

279

254

Packaging material

25

21

Share of renewable and recyclable raw materials and packaging materials, %

2024

2023

Renewable materials

94

93

Recycled materials

0.2

0.1

*Share of the total weight of materials used in the reporting period.

Metsä Board uses recycled paperboard for the cores of paperboard reels.

Outflows of material and energy

Products, 1,000 t

2024

2023

Pulp

619

555

BCTMP

504

441

Paperboard

1,539

1,319

Other bioproducts (tall oil and turpentine)

18

17

By-products, 1000 t

2024

2023

Fertilising and soil improvement (lime, ash, sandy bark)

14

12

Industrial use (lime dust, ash, de-inking sludge)

18

13

Energy use (de-inking sludge, sandy bark)

0

0

Total

32

25

68

Report of the Board of Directors | Metsä Board Annual review 2024

Waste use and disposal, 1,000 t

On-site

Off-site

Total 2024

Total 2023

PROCESS WASTE (NON-HAZARDOUS)

Material utilisation

8.1

65

73

59

Energy use

54

0.8

55

59

Landfill

0.0

0.3

0.3

1.2

Total process waste

62

66

128

119

OTHER NON-HAZARDOUS WASTE

Material utilisation

0.1

4.0

4.1

3.8

Energy use

0

1.4

1.4

0.3

Landfill

0

0.04

0.04

0.05

Total other non-hazardous waste

0.1

5.4

5.5

4.1

HAZARDOUS WASTE

Material utilisation

-

0.3

0.3

0.5

Energy use

-

0.2

0.2

0.01

Incineration without energy recovery

-

0.07

0.07

0.8

Landfill

-

0.3

0.3

0.01

Other disposal*

-

0.2

0.2

0.07

Total hazardous waste**

-

1.1

1.1

1.4

Total waste

62

73

135

125

Share of landfill waste of all waste, %

0

0.8

0.5

1.0

* Disposal and treatment of waste other than delivery to landfill. The amount also includes repackaging and pre-processing before disposal measures.

** Metsä Board’s operations do not generate radioactive waste.

Reporting principles for metrics

Resource inflows are disclosed in the original state of materials. Wood volumes are disclosed based on the information received from Metsä Group’s Wood Supply and Forest Services, and disclosures of other raw materials are based on the received tonnes of raw material. Inflows regarding packaging materials are based on internal reporting.

The key assumptions made in resource inflow calculations are related to material conversion factors and the categorisation of materials into renewable materials and recycled materials. Some of the converted inflow amounts are based on assumptions if average conversion factors for a material or product have been used in the calculations. If a material cannot be categorised as renewable or recyclable, the assumption is that it is neither.

The waste volumes include waste transferred directly from the mill process, waste from construction and demolition projects outside factory operations as well as interim storage to final

disposal, which the company has operational control over, includ- ing material and energy recovery, landfill disposal and hazardous waste treatment. Waste transferred from the mill process to interim storage is not included in the disclosed waste volumes. Moisture is included in the waste volume.

The volume of process waste delivered to landfills includes the volume of waste from production processes (in tonnes) delivered to landfills from all the production units. The 2030 sustainability target only applies to process waste. For example, it does not apply to waste generated in production units’ cafeterias, the volume of which is non-material compared with process waste.

The volume of waste treated in the mills’ own waste treatment areas is collected from weighting reports. Information about the volume of waste treated by external service providers and the treatment method is obtained from service providers.

The metrics have not been validated by an external party.

69

Training and skills development

Metsä Board’s management and employees’ skills development are guided by the Human Resources policy. Metsä Board’s management and HR function are in charge of implementing the policies included in the Human Resources policy. Management and supervisory work is supported through coaching, where participants discuss matters such as Metsä Group’s good leadership framework. Employees’ skills are developed in the long term in line with Metsä Board’s strategy and goals.

Working conditions

Metsä Board complies with the applicable practices for working conditions in its operating countries, in addition to local legislation. In its Code of Conduct, the company is committed to fair terms and conditions of employment. 77% of Metsä Board’s employees are covered by collective agreements. In Finland, Metsä Board follows company-specific collective agreements for the chemical forest industry.

All Metsä Board production units and 88% of the employees are located in Finland and Sweden, both of which have high-standard statutory requirements concerning working conditions such as reasonable working time, annual leave, parental leave and part-time work. The wage payment practices for the family-related leave of employees in Finland have been harmonised to a level that exceeds the statutory requirements concerning family-related leave and offers parents equal opportunities to take care of their child. All Metsä Board employees are paid a living wage (situation at the end of the reporting period, 31 December 2024). Metsä Board’s employees have the right to choose whether they belong to a trade union or not.

Health and safety

Metsä Board’s occupational safety is guided by the safety management system, comprising the Corporate Security policy and the safety princi- ples, standards, processes and work instructions. Metsä Board’s safety management system considers each country’s legislation – for example, the Occupational Safety and Health Act in Finland. The Corporate Security policy defines the goals and operating models of security operations, to which all employees must commit in their activities. The safety principles guide safety-related decisions and define the criteria for preparing safety processes and standards. In addition to guiding occupational safety, the ISO 45001 standard calls for a safety management system. The imple- mentation of safety policies is the responsibility of Metsä Board’s CEO in accordance with the requirements specified by Metsä Group’s senior management. The roles and responsibilities of occupational safety are defined in the safety management principles. The related e-learning course is mandatory for the employees of production units.

All Metsä Board mills comply with the ISO 45001 standard for occupa- tional health and safety. All Metsä Board mills apply the 5S method for organising workplaces and standardising working methods, which aims to increase productivity, safety and wellbeing at work.

All the production units’ employees and service providers come under the scope of the occupational safety management system, which has been certified by a third party. Production units account for 81% of Metsä Board’s total workforce. Office employees outside production units come under the scope of Metsä Board’s occupational safety management system, but these operations do not have third-party certification.

At Metsä Board, wellbeing and the improvement and maintenance of work ability are guided by the Code of Conduct and the guidelines for

wellbeing and occupational safety, in which Metsä Group commits to promoting employees’ physical and mental wellbeing. The promotion of workplace wellbeing and work ability is proactive, the goal being to identify threats to employees’ work ability, initiate actions and maintain the employees’ health throughout their careers. The sites are responsible for compliance with applicable legislation and Metsä Group’s requirements for workplace wellbeing.

Metsä Board organises healthcare for its employees in accordance with each country’s legislation. Information about healthcare services is availa- ble on the company’s intranet pages, and it is also included in employees’ induction.

Other work-related rights

As part of the Code of Conduct, Metsä Board is committed to acting in accordance with the United Nations (UN) Guiding Principles on Business and Human Rights and to respecting internationally recognised human rights in accordance with the UN’s Universal Declaration of Human Rights and the ILO’s Declaration on Fundamental Principles and Rights at Work. The company is committed to remedying any negative impacts on human rights in accordance with the UN Guiding Principles on Business and Human Rights, and Metsä Group’s Principles on non-compliance notifications and the related investigation, which were updated in 2024. In the Code of Conduct, Metsä Board is committed to ensuring that no child or forced labour, human trafficking, or other forms of modern slavery occurs in its business operations and supply chain. Metsä Board has focused its production in countries with no significant risk of child or forced labour. Metsä Group publishes a modern slavery statement annually in accordance with the UK Modern Slavery Act, in which it describes the actions taken to ensure that no modern slavery occurs in the company’s own operations or its supply chain. Metsä Board supports the UN Global Compact initiative and its principles concerning human rights and employ- ees, among other things. Human rights matters are discussed in e-learning courses such as those focusing on sustainability, the Code of Conduct and DEI. All employees are required to regularly complete the courses.

As part of its Personal Data Protection Policy, Metsä Board is committed to protecting the privacy of people. The Data Protection Policy defines the principles and rules that must be followed when processing personal data. Personal data related to the employees’ health are processed only by designated individuals in accordance with data protection legislation and in situations in which the data is required by law. Employees’ health-related data is stored separately from the employees’ general personal data. The data protection management model helps ensure compliance with legislation, including the EU’s General Data Protection Regulation (GDPR).

Engaging with own workers and workers’ representatives about impacts

Metsä for all vision

Interaction with employees played an important role when defining the Metsä for all vision. The vision’s content was influenced by the opinions of the international working group comprising the company’s employees, as well as the results of the survey for all employees. The site-specific devel- opment measures related to the vision’s implementation were determined in workshops for local management, aided by site-specific DEI employee surveys. The workshops and DEI surveys are discussed under Actions .

72

also choose to submit a report anonymously through the Compliance and Ethics Channel.

All accidents and hazardous situations are investigated. The investiga- tion creates conditions for avoiding similar situations and identifying any shortcomings in safety management. When the investigation report is completed, a summary of the investigation is distributed to all Metsä Group business areas.

Actions

Metsä Board surveys the measures targeted at its own workforce based on the identified impacts. Impacts on the company’s own workforce are systematically assessed in the double materiality assessment, in which attention is paid to the results of surveys focusing on the employees such as the annual employee survey.

Based on the results of the employee survey, an action plan is drawn up for the areas with the weakest results. Supervisors discuss the results of the employee survey with their own teams. The discussion can also involve the HR function and a third party if required. Based on the results, the teams choose the required measures, and their implementation is monitored at team meetings and by the company management.

The effectiveness of the implemented measures is assessed with the employee survey, Pulse survey and the DEI surveys conducted during 2022-2024. The surveys measure the realisation of ethical and equal operations, the commitment of employees, and the quality of leadership. Based on the reports made through the Compliance and Ethics Channel, and other cases submitted for investigation to the Compliance Committee, an idea of the realisation of ethical operations at an annual level can be formed afterwards.

Equal treatment and opportunities for all

The focal points of the Metsä For All vision are equality and gender equality, diversity, inclusion, and cultural change. They guide the development of employee processes and the annually determined measures for achieving the vision.

As part of the continuous development work, an equal pay survey is con- ducted annually, employees are trained regularly, and measures are taken to ensure that the gender distribution in leadership training corresponds to the DEI targets. In successor planning, attention is paid to the goal of a more balanced gender distribution in company duties. Metsä Board’s recruitment partners are committed to the DEI targets.

Anonymous recruitment is the main recruitment method. It supports the diversity of employees by encouraging people with different backgrounds to apply for jobs at Metsä Board. Anonymous recruitment encourages employees to consider their biases and their potential impact on recruitment. After the introduction of anonymous recruitment, the share of women of all recruited employees has increased by 21% in relative terms from 2021 (28%) to 2024 (34%).

Based on the results of the 2022 ethics barometer, increasing awareness of the Metsä for all vision and strengthening its implementation locally was determined as a development area. To promote it, a workshop-based programme was launched for local management. In the workshops, development measures will be determined based on the results of the DEI survey conducted among local employees. A total of 11 workshops were organised at Metsä Board in 2022–2024. Key areas of development

identified in the DEI surveys include the unequal distribution of workload, the unequal treatment of employees and poor work-life balance.

During 2024, a training programme focused on themes related to mental safety was launched as a continuation of the DEI workshops for occupational health and safety committees. The programme covers topics such as inappropriate treatment, bullying, harassment, discrimination and psychological safety, as well as ways to address grievances. Training will continue in 2025.

Training and skills development

The aim is to ensure the availability and retention of skilled employees by investing in development programmes, successor planning, cooperation with educational institutions and employer image. Competence surveys support the development of multiple skills and competence measurement. Personal assessments and wider competence surveys can guide the individual, group and organisational level competence and the content of development programmes.

Metsä Board encourages its employees to actively develop their com- petence and participate in different types of training. Everyone is provided with a personal development plan to support their development at both the personal and team levels. In 2024, competence was developed in the academies for finance, sales, procurement, sustainability and leadership. In addition, planning for a production academy was initiated. Mentoring programmes and job rotation support the employees’ professional growth and enable the use of tacit knowledge.

The implementation of competence development is monitored at two levels. Metsä Board monitors the number of personal development plans and employee survey results related to the opportunities to use one’s own competence. In addition, feedback is collected on each academy and other training programmes.

Metsä Board’s employees have a bonus scheme, and the personal performance bonus targets of each employee include a sustainability target. Personal goals and areas of development are set annually, and their progress is monitored in performance and development appraisals (PDAs), which all employees conduct with their supervisor twice a year. The bonus scheme does not cover trainees, thesis workers, employees who have worked less than four months during the bonus scheme year or individuals who are not in an employment relationship at the time of the bonus payment.

Working conditions

All Metsä Board’s employees are included in the same HR management system, which reduces the risk of employment conditions or wages in breach of the law or agreements. In some duties, employees have access to flexible working hours and a hybrid model, which enables them to work remotely part of the week. The company supports the employees’ wellbe- ing at different stages of life and enables a long career by offering various solutions such as job rotation.

Health and safety

In Metsä Board, safety management is based on the prevention of hazards and risks. Operations are guided by safety processes and standards and work instructions. The e-learning course in the principles of safety management is mandatory for the production units’ employees. The general safety induction e-learning course dealing with hazards and risks

74

Incidents, complaints and severe human rights impacts

2024

2023

ALL REPORTS RELATED TO UNETHICAL BEHAVIOUR

All reports

22

17

Reports resulting in a full-scale investigation

13

4

Reports to national contact points for OECD multi- national companies

0

0

DISCRIMINATION AND HARASSMENT CASES

Reported cases of discrimination and harassment

3

0

Confirmed cases of discrimination and harassment

2

0

Total amount of fines, sanctions and damages paid based on reported cases of discrimination and harassment

0

0

SEVERE HUMAN RIGHTS CASES

Severe human rights cases (child and forced labour, trafficking in human beings)

0

0

Total amount of fines, sanctions and damages paid based on reported severe human rights cases

0

0

Reporting principles for metrics

The figures for the company’s own workforce include the entire Metsä Board Group. The number of employees used in the calculations is indicated as the number at the end of the reporting period (31 December 2024). The number of employees also includes non-active employees such as employees on family-re- lated leave. Metsä Board annually employs around 330 seasonal summer employees, thesis workers and trainees, some of whom are not employed at the end of the reporting period, when the number of employees is determined. The number of employees as full-time equivalents, at the end of the year, and on average is presented in the Consolidated Financial Statements, Notes 2.1.

In Metsä Board’s personnel system, a person’s gender is determined based on their legal gender. The categories “other” and “not reported” are not applied in the reporting of gender distribution.

Non-employee workers in the company’s own workforce include workers who have concluded an agreement on the supply of labour with Metsä Board – that is, self-employed people and workers provided by companies that primarily engage in employ- ment services. No significant changes usually take place in the number of workers over the year.

Recruitment includes permanent new hires. Employee turnover includes all leavers, whatever the reason (excluding transfer of business), divided by the number of employees. The figure includes permanent employment relationships.

The share of anonymous recruitment of vacancies open to all includes the recruitment carried out in the Workday system. Workday is used in most recruitment. For example, cases in which the job applicant directly contacts the production unit are not included in the calculation.

The key figures for management, share of women in manage- ment, and management training and skills development include people whose management level is VP/SVP/CEO, and who have a management IPE level.

The total remuneration ratio of women to men has been calcu- lated as an average of women and men in the same pay category, weighted by the number of employees. If pay categories are not used in the unit, remuneration has been compared within the same site. The adequate wage indicator has been calculated by comparing employees’ total remuneration with market data on the adequate wage in the area in question. The 2023 compensa- tion figures have been retrospectively corrected, as the previous calculation only considered active employees.

The lack of social security for the listed life events applies to all employee groups, a total of 13 people in the listed countries.

An occupational accident is reported if a person injured at work requires medical treatment or adapted or replacement work, or if the accident leads to their absence. In the calculation of lost-time accidents and LTA1F rate, only accidents that have led to at least one day of absence are taken into account. The accident frequen- cies, TRIF and LTA1F, only include the company’s own employees because information about service providers’ actual working hours is unavailable. Frequencies have been calculated per million hours worked. The number of work-related accidents is indicated separately for the company’s own employees and service providers. The disclosed days absent may involve uncertainty due to changes made afterwards. Days absent due to occupational diseases also include absences due to occupational disease examinations. In the case of fatal occupational accidents, the number of days absent is indicated as 0 for calculation reasons. No fatalities occurred in 2024.

Family-related leave includes maternity leave, paternity leave and parental leave available under national legislation and collective agreements.

Cases concerning the company’s own workforce that may have involved a direct or indirect negative human rights impact have come to the company’s attention through either the Compliance and Ethics Channel or a notification made to a member of the Compliance Committee. The figures also include cases involving a potential human rights impact that exceed the materiality threshold based on the Compliance Committee’s evaluation.

The employee survey results are based on the annual employee survey. All Metsä Board employees can respond to the survey. The index depicting employee commitment is based on the results of the employee survey’s statements concerning the employee’s own work, team, leadership and company, for which benchmark data is available. The results are compared with European benchmarks, and the level of employee commitment is derived from this. Responses are collected on a scale of 1−4 (fully disagree/agree), and an external service provider converts the responses to indexes on a scale of 0−100 (100 = everyone fully agrees). Compared with the standard, the target of AAA is “very good”.

The metrics have not been validated by an external party.

78

If shortcomings are observed in the service providers’ occupational safety, the same approach is followed as in other incidents of non-compli- ance concerning suppliers – that is, the provider is first offered the oppor- tunity to rectify their way of working. If the service provider is unwilling or unable to rectify their way of working, cooperation with the service provider is discontinued.

In 2024, in a demolition project related to the Husum production unit’s maintenance investment, one contractor was removed from the site due to shortcomings in occupational safety.

Actions

In 2024, Metsä Board’s operations did not cause severe human rights impacts, and no confirmed severe human rights issues or human rights violations in the upstream of downstream value chain were brought to the company’s attention. Less severe work-related accidents causing personal injuries, incidents and complaints are discussed under S1 – Own workforce .

Metsä Board’s actions seek to mitigate negative impacts and produce positive impacts on value chain workers. The measures are continuous and annual. Processes are developed in line with continuous improvement. Metsä Board has not identified significant operating or capital expenditure allocated to actions concerning value chain workers.

Working conditions

A background check is always carried out for new suppliers, excluding pri- vate forest owners and certain low-risk suppliers. In addition, compliance is monitored continuously during the supplier relationship. Any known human rights violations and negative publicity related to human rights are reviewed as part of the background check. More detailed supplier assessments and audits are conducted for the most important suppliers, but also for suppliers whose branch of industry, country or performance involves a heightened risk related to sustainability or availability. Supplier assessments and audits are conducted to ensure that each supplier has adequate means to recognise and minimise impacts on the working conditions and other work-related rights of their employees. Among other things, evaluations seek to ensure that the companies have adequate proactive measures for ensuring occupational safety, as well as a written code of conduct and an anonymous reporting channel for employees. Audits include observations of working conditions and interviews with employees if required.

Some of the key actions to safeguard the rights of value chain workers in Metsä Group’s wood supply include the requirement that contractors commit to sustainability requirements, background checks of entrepre- neurs, close cooperation with the network of entrepreneurs, compliance with certification schemes and chains of custody (PEFC and FSC) and ISO standards (ISO 9001, 14001, 45001), as well as validation of operations by independent parties.

In most large strategic construction projects, the subcontracting chain’s sustainability is ensured proactively with the operating model for combat- ing the grey economy. It ensures that companies in the subcontracting chain comply with laws and collective agreements and handle taxes and other obligations appropriately. The backgrounds of businesses are checked at the offer stage, and spot checks are carried out regularly to detect any deviations.

To ensure the sustainability of suppliers, customers and other coopera- tion partners, Metsä Board follows third-party due diligence with its Know Your Business Partner background checks, which are discussed in more detail under G1 – Business conduct .

Supplier management practices are discussed in greater detail under G1 – Business conduct .

Health and safety

The general safety induction dealing with hazards and risks in the work environment is mandatory for service providers working at Metsä Board’s production units and construction sites. Before beginning to work on Metsä Board’s site, suppliers also receive a work-specific safety induction and permits to work. Service providers must assess the risks in their own work, prepare for them with a safety plan and submit their plan to Metsä Board. Service providers participate in Metsä Board’s safety walks and risk assessments. Work-related accidents that occur in the service providers’ operations at Metsä Board are registered in the HSEQ system. Accidents and reported safety observations are monitored continuously. In con- struction projects, the safety performance of different service providers is monitored, and any safety deviations observed are actively addressed.

Metsä Fibre, Metsä Board’s associated company, organises regular cooperation forums with key service providers to discuss the conditions and joint development needs of safety cooperation. A key safety develop- ment measure in the next few years is to expand cooperation forums to Metsä Board.

Metsä Group’s wood supply contractors participate in regular safety walks at the loading and unloading sites of production units and terminals and in the safety management training organised in 2024 and 2025. In 2024, an application for employees working alone in the forest was introduced in wood supply. In addition, a risk assessment is conducted for each forest worksite.

Equal treatment and opportunities for all

Supplier management practices for ensuring social responsibility are discussed under Working conditions in this section. Equal treatment and opportunities for all are considered in supplier audits, in which attention is paid to matters such as the adequacy of written instructions to promote equality and non-discrimination and practices for ensuring compliance with the instructions.

Other work-related rights

Supplier management practices, including audits to ensure the realisation of social responsibility, are discussed under Working conditions in this section. The auditors have been trained to detect risks related to forced labour and labour exploitation, for example.

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S4 – Consumers and end-users

Material impacts, risks and opportunities related to consumers and end-users

Material sub-sub-topic

Impacts

Risks and opportunities for Metsä Board

Management

Personal safety of consumers and end-users

Health and safety

If Metsä Board’s products were to exhibit defects related to product safety, there would be negative impacts on the health and safety of consumers and end-users.

Risk: Metsä Board suffers reputational damage among current and poten- tial new customers, consumers and end-users, and may incur liabilities for compensation and other costs related to the limitation of damage.

Metsä Board uses regular product safety surveys, inspections, risk assessments and monitoring.

Metsä Board has appropriate certified management systems.

Information-related impacts on consumers and end-users

Access to quality information

If Metsä Board’s products were to include misleading product infor- mation, there could be negative impacts on the health and safety of consumers and end-users.

Risk: Metsä Board suffers reputational damage among current and poten- tial new customers, consumers and end-users, and may incur liabilities for compensation and other costs related to the limitation of damage.

Metsä Board has established practices for ensuring that its product information is up to date and accurate.

The compliance of product information is controlled annually and through continuous change monitoring.

Product information and product requirements are controlled with the product information management system, among other things.

    Positive impact on the environment and society or on Metsä Board’s business

    Negative impact on the environment and society or on Metsä Board’s business

Targets

Product safety, human rights and respect for the environment are impor- tant themes for consumers and end-users. Metsä Board has not yet set a 2030 sustainability target specifically related to consumers and end-users. The company’s internal targets and policies for ensuring the quality and compliance of operations and products have been defined in the Quality policy, the goals of which are described under Policies .

The identification and assessment of material impacts, risks and opportunities

The material impacts concerning consumers and end-users were identified in a human rights impact assessment, the results of which were included in the company’s double materiality assessment. The impacts, risks and opportunities concerning health and safety and access to quality information identified in the double materiality assessment are described in the table on page 86. Other impacts, risks and opportunities related to consumers were detected in the double materiality assessment. These are described under E1 – Climate change , E4 – Biodiversity and ecosystems and E5 – Resource use and circular economy . The assessment of human rights impacts and the materiality assessment are described on pages 26–28.

Users of paperboard products for food contact are among Metsä Board’s key consumers and end-users. In terms of end use, food contact material accounts for a large share of Metsä Board’s sales. Product safety and accurate and easily available product information related to it are especially important in food contact end uses. The impacts are not sys- tematic but are most likely related to individual incidents such as defects in individual products.

Policies

Sustainability related to Metsä Board’s consumers and end-users is guided by policies comprising Metsä Group’s Code of Conduct, Supplier Code of Conduct, Quality policy and management systems approved by the company’s Board of directors. The goal of policies is to minimise adverse environmental impacts, promote human rights and strengthen ethical operations, and thus demonstrate to consumers and end-users that the products are safe and sustainably produced. The policies indirectly encompass all consumer and end-user groups.

In all its operations, Metsä Board respects internationally recognised human rights and in accordance with the UN Guiding Principles on Business and Human Rights, it is committed to rectifying any negative human rights impacts. In relation to consumers or end-users, no incidents of non-compliance with the UN Guiding Principles on Business and Human Rights, the ILO’s Declaration on Fundamental Principles and Rights at Work, and the OECD Guidelines for Multinational Enterprises have been brought to Metsä Board’s attention. The Code of Conduct and the Supplier Code of Conduct are discussed in more detail under S1 – Own workforce and S2 – Workers in the value chain .

The Quality policy determines the targets and policies for ensuring the quality of Metsä Board’s operations and products. The goal is to ensure product safety, and that the quality of the company’s operations, products and services meets the needs and expectations of customers – and thus consumers and end-users. The Quality policy is owned by the President and CEO of Metsä Group, and its implementation at Metsä Board is the responsibility of Metsä Board’s Corporate Management Team.

86

Health and safety

Product compliance is monitored with the product safety process, which includes raw material management, compliance assessment and product testing, both internally and with external cooperation partners. Metsä Board’s mills have ISO 22000 and FSSC 22000 food safety systems that cover food safety-related risks across the production and supply chain, and the functioning of systems is assured annually with internal and external audits. Metsä Board’s product safety specialists continuously monitor developments in legislation and requirements.

Production-related product safety risks are managed with methods such as the HACCP (Hazard Analysis and Critical Control Points), which is used at all Metsä Board production units. A HACCP hazard analysis is carried out whenever there are changes in essential processes or raw materials.

Metsä Board’s products are tested regularly in accredited laboratories to ensure their quality and safety. The laboratory analyses and detailed composition compliance analyses form the basis for our Product Safety Statement, which includes product-specific information about product safety and compliance.

Quality and safety are also monitored with the aid of reputation surveys, customer feedback and customer surveys. Metsä Board conducts

quarterly monitoring and assessment of customer feedback related to any negative impacts on consumers and end-users. Any negative impacts are classified as material based on the type code of the customer feedback. The type codes monitored include foreign objects in products, purity of product, and sensory properties.

Access to quality information

Product management processes include established practices to ensure the product information is compliant and up to date, and to correct any mistakes in the information.

Product information is managed with Metsä Group’s Product Informa- tion Management system, which was introduced in 2022 and is developed to support new product information management needs. Product informa- tion management is used to actively monitor the accuracy and compliance of product information in connection with all changes occurring in the process. Metsä Group has an internal control process that is also applied in the management of product information and in accordance with which the compliance of Metsä Board’s products is assessed once a year.

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Report of the Board of Directors | Metsä Board Annual review 2024

G – Governance

G1 – Business conduct

Impacts, risks and opportunities related to business conduct

Impacts

Risks and opportunities for Metsä Board

Management

Corporate culture

Metsä Board’s measures to promote an eth- ical corporate culture offer the employees a safe work environment and other stakehold- ers an opportunity for cooperation with an ethical and reliable operator.

Opportunity: The employees’ and other stake- holders’ experience of Metsä Board and the company’s reputation as an ethical and reliable operator strengthen.

Employees learn about ethical corporate culture during induction and later during employment, through e-learning and classroom training, as well as through internal communication. Particular emphasis is placed on developing supervisors’ grievance resolution skills through targeted training.

Ethical corporate culture is measured with the ethics index based on the ethics statements included in the employee survey. The in- dex indicates employees’ experience of the ethics of our business.

Metsä Group’s Compliance and Ethics Channel is available to all external and internal stakeholders.

Inadequate measures to commit employees to an ethical corporate culture could lead to non-compliance with the law or unethical business operations, as well as unequal treatment and harassment.

Risk: Metsä Board incurs financial losses due to operations in breach of legislation. The com- pany’s reputation as a sustainable partner and operator weakens. Unequal treatment and har- assment reduce the employees’ job satisfaction and commitment.

Corruption and bribery

Prevention and detection: Metsä Board’s measures and control mechanisms for preventing corruption and bribery offer stakeholders the opportunity to cooperate with an ethical and reliable operator.

Opportunity: The stakeholders’ experience of Metsä Board and the company’s reputation as an ethical and reliable operator strengthen, improv- ing performance and competitiveness.

Employees are offered information about ethical corporate culture during induction, and later during employment, through e-learning and classroom training.

In 2024, Metsä Group released its new anti-corruption principles that supplement its earlier guidelines.

Metsä Board has appropriate continuously developed internal controls.

Ethical corporate culture is measured with the ethics index based on the ethics statements included in the employee survey. The index indicates employees’ experience with the ethics of our business.

Everyone can report grievances through the Compliance and Ethics Channel.

Incidents: Inadequate measures and control mechanisms for preventing corruption and bribery could lead to corruption and bribery in violation of Metsä Group’s Code of Con- duct and legislation.

Risk: Corruption and bribery have significant fi- nancial consequences and weaken the reputation and employer image.

Management of relationships with suppliers including payment practices

Metsä Board’s requirements and control mechanisms, as well as its sustainability cooperation with suppliers, have a positive impact on the realisation of ethical operations and sustainability in the supply chain.

Opportunity: Metsä Board’s reputation as a sustainable partner and operator improves. Cooperation with suppliers becomes stronger and leads to long partnerships.

Suppliers are required to commit to the Code of Conduct.

Metsä Board follows due diligence in its selection of partners (Know Your Business Partner process).

Joint sustainability targets and actions are agreed with partner-lev- el suppliers.

The company uses supplier assessments, surveys and audits, as well as risk analyses.

Procurement employees are trained in matters concerning ethics and sustainability.

Cooperation is close with local contract entrepreneurs in harvest- ing, transport and forestry work.

The sustainability and traceability of wood fibre is ensured in accordance with the Chain of Custody.

The traceability of other raw materials and packaging materials is continuously developed

If Metsä Board’s requirements and control mechanisms were inadequate, this could lead to non-compliance with the law or the com- pany’s requirements in the supply chain.

Risk: Metsä Board unintentionally supports operations contrary to its values, which risks the company’s reputation as a sustainable partner. Relationships with suppliers weaken, leading to the loss of the best partnerships .

Inadequate training of the procurement em- ployees or insufficient control mechanisms could cause unequal treatment of suppliers.

Protection of whistle-blowers

Failure to protect the anonymity of whis- tle-blowers and confidentiality could lead to retaliation against whistle-blowers or the victim. No such incidents were recorded in 2024.

Risk: Trust in the Compliance and Ethics Channel wanes, and suspected misconduct is not report- ed. Activities contrary to Metsä Board’s values and Code of Conduct may not be detected. Unlawful activities may incur financial losses. The employees’ job satisfaction and the employer image weaken

Anonymous reports can be submitted through Metsä Group’s Compliance and Ethics Channel.

The reports are handled in confidence under the Compliance Committee’s lead.

Metsä Board is committed to protecting the rights and privacy of people who report breaches in good faith. These commitments have been confirmed in both the Code of Conduct and the Princi- ples on non-compliance notifications and the related investigation, which have been updated to comply with the new requirements of the EU Whistleblowers Directive.

Political influence and lobbying activities

Through successful influencing and lobbying, Metsä Board, as part of Metsä Group, can introduce views into social debate that pro- mote the circular bioeconomy and highlight wood-based products as an alternative to plastic-based products, for example, and emphasise their role in climate change mitigation.

Opportunity: Political operators recognise the potential of the circular bioeconomy and the role of forests and wood-based solutions in climate change mitigation, improving the conditions of Metsä Board’s operations.

An ethical corporate culture and the Code of Conduct are deployed through training and communication. The Code of Conduct in- cludes Metsä Group’s policies on matters such as gifts, hospitality, conflicts of interest, anti-corruption and fair competition. The anti-corruption principles published in 2024 supplement these guidelines.

Influencing plans and key social messages are based on Metsä Group’s and its business areas’ strategies, reviews of the operating environment and surveys of regulatory risks.

The progress and success of influencing activities are regularly reported to Metsä Board’s and Metsä Group’s management and Board of Directors.

If Metsä Group’s key messages related to influencing and lobbying or the related ethical practices are not adequately implemented in the company, this may lead to influencing or lobbying that is inconsistent or in breach of the company’s policies. The potential of the circular bioeconomy and wood-based products in climate change mitigation would not be harnessed in society.

Risk: Metsä Board and Metsä Group are unable to consistently introduce the key messages identified as being material to political discus- sion, which may, in the worst case, lead to the realisation of regulatory risks. Unethical forms of influencing and lobbying weaken the company’s reputation as a sustainable operator.

    Positive impact on the environment and society or on Metsä Board’s business

    Negative impact on the environment and society or on Metsä Board’s business

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Report of the Board of Directors | Metsä Board Annual review 2024

other key policies such as the Equality Policy, Personal Data Protection Policy and Information Security Policy every three years. The e-learning course in information security was revised in 2024. The e-learning course in the Code of Conduct includes Metsä Board’s key ethical principles and describes the best practices related to business sustainability through examples and exercises.

Depending on the employees’ duties, they are also required to complete e-learning courses related to other policies such as the antitrust, procure- ment, agreement and legal affairs policies. In 2024, a revised e-learning course in agreement and legal policy was launched and supplemented with classroom training in agreement law, and with online and classroom training in the Know Your Customer process for all employees in sales and marketing. Workshops for local management dealing with diversity, equality and inclusion, which were launched in 2022, continued in 2024 (the workshops are discussed in more detail under S1 – Own workforce ). A section developing supervisors’ capability of addressing ethical grievances and encouraging the reporting of grievances was added to the training offered to supervisors. Ethical operations and doing the right thing are also part of the induction of new white-collar employees and apprenticeship trainees.

The completion of e-learning courses and classroom training is regularly monitored by the Compliance Committee, which supervises the Compliance and Ethics programme, and the results are reported once a year to the Audit Committee of the company’s Board of Directors as part of the Compliance and ethics review. The completion percentage of the Code of Conduct e-learning course is presented in the Completion of e-learning courses table.

A culture of diversity, equality and inclusion (DEI), and the implemen- tation and development of an ethical and respectful corporate culture, is one of the focal areas of the Motivated people strategic programme. The programme’s focal areas and goal are discussed under S1 – Own workforce .

The implementation and development of the culture of doing the right thing are measured with the ethics index, calculated based on the ethics statements in the employee survey, which measures the employees’ experience with ethics in the company’s operations. According to the most recent survey, conducted in 2024, financial misconduct, corruption, conflicts of interest, inappropriate influencing of partners’ decision-making and data protection breaches are not considered material risks. The results of the ethics statements will be discussed at all sites by the end of January 2025. Each site will define development measures for 2025 to remedy the problems observed.

Corruption and bribery risks are assessed as part of Metsä Group’s risk management process. Of the company’s internal functions, sales and marketing, procurement and lobbying have been identified as those most susceptible to corruption and bribery. The measures for preventing and detecting corruption and bribery are described on page 93.

Metsä Board annually participates in several environmental, social responsibility and business practice assessments conducted by third parties such as CDP, EcoVadis, ISS, Sustainalytics, MSCI and Moody’s. Metsä Board’s partners can also assess Metsä Board’s sustainability through the Sedex system. In addition, third-party SMETA audits (Sedex Members Ethical Trade Audit) are conducted on Metsä Board’s sites. In 2024, a SMETA audit was carried out at the Äänekoski paperboard mill.

To ensure the sustainability of its suppliers, customers and other partners, Metsä Board follows third-party due diligence in its Know Your Business Partner process, in which the partner’s background is checked for any risks related to trade sanctions, corruption, money laundering, human rights violations, environmental offences and various other misconduct before a binding agreement is concluded, as well as during the cooperation relationship by means of continuous monitoring. In 2024, the process was developed by automating background checks, harmonising processes, clarifying roles and responsibilities, and publishing new guide- lines for background checks, the Know Your Business Partners principles. Relationships with goods and service suppliers are described in more detail on page 92.

In 2022, Metsä Board ended all business related to Russia and Belarus due to Russia’s military aggression against Ukraine. Following the business transaction in 2024, Metsä Board and Metsä Group have no more holdings in Russia.

Mechanisms for identifying, reporting and investigating concerns

Employees and stakeholders are encouraged to report any ethical concerns and non-compliance with the law related to Metsä Board’s oper- ations. Observations can be reported to the supervisor, local management, HR and the Compliance Committee, or through Metsä Group’s Compliance and Ethics Channel, which is available in ten languages to all stakeholders on the company’s website. Reports can be made anonymously. The chan- nel’s technical implementation is handled by an external service provider.

The employee survey’s ethics statements and open feedback are used to monitor the effectiveness of the Compliance and Ethics Channel and other reporting methods for reporting and handling concerns. In addition to e-learning courses, awareness of the Compliance and Ethics Channel is promoted by improving the channel’s visibility with posters supplied to production units and in the supplier network used to manage supplier cooperation. Moreover, satisfaction with and awareness of engagement methods are assessed as part of supplier surveys. No separate assess- ment is currently conducted of the downstream value chain’s, affected communities’ or consumers’ and end-users’ awareness of and confidence in reporting methods or the effectiveness of reporting methods among these groups.

Every breach or violation, and suspected breach or violation, of which the company becomes aware is investigated. The investigation is supervised by the Compliance Committee. The committee is tasked with monitoring that the consequences of the investigations are applied consistently in cases of equal gravity. Corrective actions must be adequate as described in the company’s Code of Conduct, and the Principles on non-compliance notifications and the related investigation. Any illegal activities are reported to the authorities. Neither the person investigated nor their supervisor participates in the investigation of the breach or suspected breach. If called for by the significance of the breach under investigation, the Compliance Committee reports the incident to Metsä Board’s management and Board of Directors at a regular meeting, or immediately if required.

The cases are divided into the following categories: fraud or other criminal behaviour; corruption and bribery; competition law; conflicts of interest; employee matters; discrimination or harassment; privacy and

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Report of the Board of Directors | Metsä Board Annual review 2024

and audits are used as the basis for making development proposals and monitoring any corrective action taken. The results are the responsibility of a third party or a Metsä Group employee who is not responsible for suppli- ers. In 2024, no serious deviations were detected in supplier assessments and audits.

To ensure the equal treatment of suppliers, the procurement employees are trained to disqualify themselves in decisions that may involve conflicts of interest. A written commitment to this is required in the procurement process. Approximately every two years, suppliers can respond to an anon- ymous survey concerning the smoothness and fairness of cooperation and factors contributing to these matters. The survey results are submitted to the suppliers, and measures to improve procurement practices are adopted based on them. The procurement employees have annual finan- cial performance targets related to matters such as conducting supplier sustainability assessments and monitoring improvements proposed by suppliers.

In 2024, sustainability themes were discussed in the procurement academies organised for procurement and logistics employees. In addition, training on the use of EcoVadis supplier assessments to ensure a sustainable supply chain was offered to employees.

The company’s target is to agree joint sustainability targets and measures to achieve them with all its partner suppliers. The management of environmental impacts in cooperation with suppliers is discussed in greater detail under E1 – Climate change . Another target is to know the origin, or at least the country of manufacture, of all the company’s raw materials, including wood, and process, basic, and coating chemicals, and packaging materials by the end of 2030.

Annual monitoring of suppliers and raw materials ensures that Metsä Board’s products comply with statutory and Metsä Board’s own stringent product safety requirements. Product safety is discussed in greater detail under S4 – Consumers and end-users.

Procurement of wood fibre by country, %

2024

2023

Finland

55

62

Sweden

35

30

Baltic countries

9.0

8.1

Others

1.5

0.02

New supplier background checks, %

2024

2023

Share of suppliers for which a Know Your Business Partner background check was made

94

90

Prevention and detection of corruption and bribery

Metsä Board complies with Metsä Group’s principles and practices for pre- venting and detecting corruption and bribery. The Code of Conduct, which guides ethical operations, prohibits corruption and bribery. It also includes

principles for avoiding conflicts of interest, crucially linked to anti-corrup- tion, and principles on gifts and hospitality. In 2024, Metsä Group released its new anti-corruption principles that supplement the Code of Conduct. Metsä Group is committed to anti-corruption and anti-bribery in its own operations and in relation to its partners. A similar prohibition is included in Metsä Group’s Supplier Code of Conduct. Anti-corruption and anti-bribery efforts contribute to Metsä Group’s 2030 sustainability targets concerning a responsible corporate culture and supply chain.

The following are the main measures for preventing and detecting corruption and bribery:

Training in the Code of Conduct and other policies guiding Metsä Group’s operations (discussed in greater detail under Completion of e-learning courses ).

The new anti-corruption principles published in 2024 and related communication.

The ethics index used to measure the employees’ experience of ethics in business and to identify areas of development (under Metsä Board’s 2030 sustainability targets ).

The Compliance and Ethics Channel available to all internal and external stakeholders. A standard process has been defined for processing reports (discussed in greater detail under Mechanisms for identifying, reporting and investigating concerns ).

Due diligence in ensuring the sustainability of partners, and the required background checks (third-party due diligence) as part of the Know Your Business Partner process (discussed in greater detail under Policies ).

Continuous development of ethical operations in the supply chain. The key measures in this respect include supplier commitment to the Supplier Code of Conduct in line with the 2030 sustainability targets, as well as supplier audits and assessments (discussed in greater detail under Relationships with goods and service suppliers ).

Completion of e-learning courses

2024

2023

CODE OF CONDUCT

Number of employees who completed the Code of Conduct training

2,332

2,214

Share of all employees who have completed the Code of Conduct training, %

99,2

98

Share of Board members who have completed the Code of Conduct training, %

100

100

DIVERSITY, EQUALITY AND INCLUSION

Number of employees who have completed DEI training

2,310

2215

Share of all employees who have completed DEI training, %

98

98

SUSTAINABILITY

Number of employees who have completed Sustain- ability training

2,295

1,930

Share of all employees who have completed Sustain- ability training, %

98

86

One of the Board members completed the Code of Conduct training in January 2025.

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Annexes to the Sustainability statement

Annexes

The annexes published at the same time as the Sustainability statement include

1) Separate annexes:

SASB content index *

Disclosures in accordance with the TCFD and TNFD recommendations *

2) Data on page 97 of the Sustainability statement:

Mill-specific key sustainability figures **

*TCFD and TNFD information does not come under the scope of assurance. SASB information, excluding the share of grid electricity and the amount of energy sold, is based on Metsä Board’s Sustainability statement, which is assured by a third party (limited assurance).

** Mill-specific figures have not been separately assured. They have been assured at the business area or group level by a third party as part of Metsä Board’s sustainability report’s limited assurance.

96

Management’s judgement-based decisions

Management’s judgement-based decisions that were made when applying the accounting principles and that have the greatest impact on the figures of the consolidated financial statements concern the following areas:

Item

Note

Nature of management’s judgement-based decisions

Financial instruments measured at fair value

4.3 Other investments

Accounting principle and valuation model applied to the shares of Pohjolan Voima Oyj

Estimates and assumptions

The Group’s key uncertainties related to assumptions and estimates that carry a significant risk of the book values of assets and liabilities changing during the following financial period include the following:

Item

Note

Nature of estimates and assumptions

Pension obligations

3.4 Pension obligations

Actuarial assumptions used as the basis for determining the current value of pension obli-gations arising from defined benefit plans and the obligation items recognised as expenses during the financial period

Property, plant and equipment and leases

4.2 Property, plant and equipment

Estimates of the useful lives of property, plant and equipment, and of lease extension options

Fair value measurement

4.3 Other investments

Estimates of key factors affecting cash flows in the valuation of Pohjolan Voima Oyj

Inventories

4.4 Inventories

Estimates of the sales prices of products measured at net realisable value, the costs of comple-tion and the costs necessary for making the sale

Provisions

4.9 Provisions

Estimates of the date and amount of costs from the obligation

Income taxes

6. Income taxes

Estimates of the date and amount of tax liabilities arising in tax audits and deferred tax assets recognised for losses

Legal obligations

8.1 Commitments and contingencies

Estimates of the date and amount of costs from obligations related to disputes and legal proceedings

104

Consolidated financial statements | Metsä Board Annual review 2024

2. Profitability

2.1 Segment information

Accounting principles

The Corporate Management Team is the chief operational decision-maker monitoring business operations performance based on the operating segments.

Metsä Board’s business operations consist solely of folding boxboard, fresh fibre linerboard and market pulp businesses. Metsä Board reports on its financial performance in one reporting segment.

Geographical sales are reported based on the location of the customer and assets and capital expenditure based on the location of the assets.

Geographical areas

External sales by location of customer

Non-current

assets

Capital expenditure

EUR million

2024

2023

2024

2023

2024

2023

Germany

136.4

148.9

0.2

2.6

0.2

0.1

Italy

125.3

136.0

0.1

0.3

0.0

0.0

Sweden

124.9

82.3

761.2

780.0

54.2

141.2

Finland

94.9

89.8

1,267.2

1,278.8

119.9

83.9

Spain

94.8

88.8

0.1

0.1

0.0

0.0

France

75.9

89.9

0.3

0.4

0.0

0.2

Poland

107.3

120.1

1.1

1.3

0.1

1.1

The Netherlands

52.1

46.8

Belgium

20.8

18.2

0.8

0.4

0.7

0.2

Other EU

167.7

178.1

EU total

1,000.1

999.0

2,030.9

2,063.8

175.1

226.7

Turkey

90.7

56.2

0.0

0.0

United Kingdom

96.2

106.1

4.2

4.9

0.1

0.2

Norway

0.5

6.9

Other Europe and Middle East

35.5

33.2

USA

432.2

432.8

1.7

1.6

0.3

1.4

Canada

45.6

56.4

Asia

97.1

114.2

0.3

0.5

0.0

0.4

Other countries

140.6

137.3

0.0

0.0

Total

1,938.6

1,941.9

2,037.1

2,070.8

175.4

228.7

Non-current assets include all non-current assets with the exception of derivative financial instruments and deferred tax assets.

Personnel at year end

By country

2024

2023

Finland

1,267

1,234

Sweden

740

739

Poland

121

107

USA

75

74

Belgium

17

17

Germany

17

17

Other countries

53

54

Total

2,290

2,240

Personnel average

By country

2024

2023

Finland

1,318

1,303

Sweden

748

743

Poland

114

103

USA

73

70

Belgium

17

32

Germany

17

28

Other countries

52

54

Total

2,339

2,333

Information on most important customers

There were no customers with revenue exceeding 10% of total

Group revenue in 2024 and 2023.

105

3.3 Share-based payments

Accounting principles

Share-based incentive programmes in which the payments are made with equity instruments and cash have been established for the company’s top executives. The Group’s share-based incentive schemes have been treated in full as arrangements settled in shares. The incentives granted are measured at fair value on the grant date, and recognised as expenses in the income statement and equity evenly over the vesting period.

The effect on profit of the incentive programmes is presented under employee costs.

During the review period, Metsä Board had four active share-based incentive schemes: Performance and committing based share incentive schemes 2020–2024 which the company Board of Directors decided to adopt on 12 December 2019, Performance and committing based share incentive schemes 2023–2027 of which the company Board of Directors decided to adopt on 15 December 2022 ,as part of company’s incentive and key personnel retention programme.

The effect on consolidated income statement of share-based incentive schemes amounted to EUR 1,481,115 (2,224,395) in 2024.

Performance based share incentive scheme 2020–2024 and Performance based share incentive scheme 2023–2027

The schemes offer the participants the possibility to be awarded Metsä Board Corporation’s B shares for achieving set goals for three-year periods. Incentive periods are the calendar years 2020–2022, 2021–2023, 2022–2024, 2023–2025, 2024–2026 and 2025–2027. The number of shares allocated includes both the share and the cash portion. Accordingly, the reward is paid partly in shares and partly in cash and the cash portion is intended to cover taxes and tax-like payments. The bonus is not paid if the person’s employment ends before the end of the earning period. The

systems have a salary proportional ceiling and the part exceeding it is cut and not paid at all. The scheme includes a two-year commitment period. If the key employee’s employment ends during the commitment period, the key person must, as a rule, return the delivered shares to the Company free of charge.

Based on the fulfillment of the criteria for the earning period 2021–2023, 223,325 Metsä Board Oyj B shares and a cash contribution were paid to cover taxes and tax-like payments arising from the reward at the time of the transfer of the shares.

Committing-based share incentive scheme 2020–2024 and Committing-based share incentive scheme 2023–2027

The scheme offers key employees in the target group the opportunity to receive Metsä Board Corporation’s B-series shares, provided that the par-ticipant’s employment relationship remains in force and continues in force until the end of the restriction period. The scheme has restriction periods of 12 to 36 months. The reward is paid partly in shares and partly in cash and the cash portion is intended to cover taxes and tax-like payments. As a rule, rewards are not paid if the participant’s employment relationship ends during the restriction period. Committing-based share incentive scheme 2023–2027 has not any allocations.

Based on the fulfillment of the criteria for the earning period 2022–2024, 11,394 Metsä Board Oyj B shares and a cash contribution were paid to cover taxes and tax-like payments arising from the reward at the time of the transfer of the shares.

110

Key characteristics of Performance based share incentive scheme 2023–2027 are summarised in the table below:

Performance basedshare incentive scheme 2023–2027

31 Dec 2024

2023–2025

2024–2026

2025–2027

Total

Key characteristics

Shares allocated to the scheme, shares

432,163

564,891

997,054

Grant date(s)

30.1.2023, 6.9.2023, 28.2.2024

30.1.2024, 28.2.2024, 13.5.2024, 4.9.2024

Criteria

Equity ratio, ROCE ja EBIT

Personnel (31 December 2024)

30

Factors used to determine fair value (EUR) 1)

Share price at grant date

8.34

7.46

Share fair value at grant date

6.90

6.57

Annual dividend assumption in fair value measurement

0.48

0.30

Share price at payment date / balance sheet date

4.24

4.24

Fair value on balance sheet date

Effect on result and financial position (EUR)

Expense in 2024, share-based payments settled as equity

0

0

0

Share-based payments settled in cash, unpaid part, estimate

0

0

0

Number of shares 1 January 2024 2)

Outstanding at the beginning of the period

424,363

424,363

Changes during the year

Shares granted

5,585

564,891

570,476

Number of shares 31 December 2024

Outstanding at the end of the period

426,377

564,891

991,268

1)The fair value of the share settled component at the grant date was the share price of Metsä Board Corporation’s B share less any dividends estimated by analyst consensus to be paid before the payment of the incentive. The fair value of the share based payment is recognised to the number of shares based on the best available estimate of the total incentive to which the participants are expected to be entitled.

2)The amounts in the table represent brutto amounts, i.e. the number of shares to be given based on the share based payment schemes. In addition, the payment will include a cash settled compo-nent used to cover taxes and tax-like charges.

112

Consolidated financial statements | Metsä Board Annual review 2024

3.4 Retirement benefit obligations

Accounting principles

The Group’s arrangements concerning benefits following the termination of employment are either defined benefit pension plans or defined contribution pension plans. A defined contribu-tion plan is a pension arrangement in which fixed contributions are made to a separate unit, and the Group does not have legal or constructive obligations to make additional contributions if the fund has insufficient funds to pay all benefits to all employees in accordance with its obligations in the future. All arrangements that do not meet these requirements are considered to be defined benefit plans. A defined benefit plan defines the pension benefit that the employee will receive upon retiring , the amount of which depends on factors including the employee’s age, years of service and salary level, for example.

With defined benefit plans, the current value of the obligations on the end date of the reporting period, less the fair value of the assets included in the arrangement, is recognised on the balance sheet as a liability. The amount of the obligation arising from the plan is based on annual calculations by independent actuaries using the projected unit credit method. The current value of the obligation is determined using the interest rate equalling the interest rate of high-quality bonds issued by the companies as the discount rate for the estimated future cash flows. The bonds used in determining the interest rate have been issued in the same currency as the benefits to be paid, and their maturity is approxi-mately the same as that of the corresponding pension obligation.

Actuarial gains and losses from experience verifications and changes in actuarial assumptions are recognised through items of other comprehensive income as a reimbursement or charge in equity for the period during which they have been incurred. Past service costs are recognised immediately through profit and loss.

Apart from contributions related to pension insurance, the Group does not have any other payment obligations in defined contribu-tion plans. Obligation-based payments are allocated as expenses in accordance with accrual accounting.

Key estimates and judgements

The determination of the current value of pension obligations arising from defined benefit plans and the items to be recognised as expenses during the financial period is based on the use of actuarial assumptions. The assumptions include, among other things, the discount rate, the assumed increase in the salary level and the assumed life expectancy. The actuarial assumptions used may differ significantly from the actual results, due to changes in economic conditions or the employment relationships of the people covered by the arrangements. Significant differences between the assumptions and actual results may affect the amount of the pension obligation and the value of items to be recognised as expenses.

Post-employment benefits

EUR million

2024

2023

Liabilities recognised in balance sheet

Defined benefit pension plans

7.2

10.0

Defined contribution pension plans

0.9

0.1

Total

8.1

10.1

Surplus of funded plans in other long-term assets (note 5.3)

-3.4

-3.4

Defined benefit pension plans

The most significant defined benefit pension plans are in Germany and United Kingdom.

Group’s German defined benefit pension plans grant old-age pensions, disability pensions and family pensions exceeding the statutory pension level to eligible officials and senior management. The retirement age is usu-ally 67 years, and the amount of pension depends on the length of service. Officials and senior management are required to have a service history of 25–30 years to receive a full pension. Some of the pension arrangements are closed. The defined benefit plans in Germany are unfunded.

The defined benefits plans in United Kingdom guarantee participants of the plan a pension, the amount of which is based on the length of service and the salary in the most recent working years. The arrangement is closed to new members. The UK pension scheme operates under an independent foundation separate from the Group.

The Group also has defined benefit plans in Finland, Belgium and Italy.

Amounts in balance sheet

EUR million

2024

2023

Present value of funded obligations

43.4

35.5

Fair value of plan assets

-40.2

-37.3

Deficit (+) / surplus (-)

3.2

-1.8

Present value of unfunded obligations

0.7

8.3

Deficit (+) / surplus (-) of defined benefit pension plans, total

3.8

6.5

Defined benefit-based pension liabilities on the balance sheet, net

7.2

10.0

Defined benefit-based pension assets on the balance sheet, net

-3.4

-3.4

113

Consolidated financial statements | Metsä Board Annual review 2024

Sensitivity of benefit obligation to changes in essential weighted assumptions 2024

Impact on benefit obligation, %

Increase 2024

Decrease 2024

Increase 2023

Decrease 2023

Discount rate, 0.5%-points

-4.2

4.3

-4.5

5.0

Salary growth rate, 0.5%-points

0.3

-0.2

0.5

-0.4

Pension growth rate, 0.5%-points

3.9

-3.8

4.2

-4.0

Life expectancy, 1 year

3.4

-3.4

2.9

-2.9

The aforementioned sensitivity analyses are based on a situation where all other assumptions remain unchanged when one assumption changes. The sensitivity of a defined benefit obligation to changes in significant actuarial assumptions has been calculated using the same method as is used in calculating the pension obligation recognised in the balance sheet.

Plan assets are comprised as follows:

2024EUR million

2024

%

2023EUR million

2023

%

Qualifying insurance policies

39.6

99%

36.5

98%

Cash and cash equivalents

0.3

1%

0.6

2%

Investment funds

0.3

1%

0.2

1%

Total

40.2

100%

37.3

100%

The most considerable risks related to Defined benefit plans are as follows:

Changes in the return on bonds

Liabilities arising from the arrangements have been calculated using a dis-count rate based on the return on high-quality corporate bonds. A decline in the discount rate increases the arrangements’ liabilities.

Inflation risk

The plan’s benefit obligations are linked to inflation and a higher inflation will lead to increased obligation.

Life expectancy

The majority of the arrangement obligations arises from generating life-time benefits for members, so the expected increase in life expectancy will increase the arrangement obligations.

The contribution made to post-employment defined benefit plans is expected to be EUR -1.6 million in 2025. The weighted average duration of the defined benefit obligation is 10.6 years (10.9).

115

4. Capital employed

4.1 Intangible assets

Accounting principles

Goodwill

Goodwill arising from the merging of business operations is recognised as the amount by which the sum of the consideration paid, the non-controlling interests’ share in the object of the acquisition and the previous holding exceed the fair value of the acquired net assets.

Goodwill is not amortised. Instead, it is tested for impairment annually and always when there is an indication of a decrease in value. Goodwill is therefore allocated to cash-generating units for impairment testing. Goodwill is recognised at original acquisition cost less accumulated impairment losses.

Other intangible assets

Intangible assets are initially recognised at their original acqui-sition cost on the balance sheet if the acquisition cost can be determined reliably and it is probable that the expected financial benefit from the asset will be to the benefit of the Group.

Intangible assets with limited useful lives are recognised as expenses over their known or estimated useful lives, using the straight-line depreciation method.

The residual value of an asset, the useful life and depreciation method are reviewed at least annually, at the end of each financial period, and adjustments are made when necessary to reflect changes in the expected financial benefit of the asset. 

Research and development costs

Research costs are recognised as expenses at the time they are incurred. Development costs are capitalised and amortised over their useful lives if the research project is likely to generate finan-cial benefits and the costs can be measured reliably. Metsä Board has not capitalised development costs.

Computer software

Costs arising from developing and building of significant new computer software are recognised as intangible assets on the balance sheet and depreciated on a straight-line basis over its estimated useful life, which is not to exceed seven years. Main-tenance and operating costs related to computer software are recorded as expenses in the reporting period during which they have been incurred.

Configuration and customisation costs in the deployment of cloud services are recognised as expenses if they do not result in intangible assets. If the services received by the group are sep-arable, the costs are recognised as expenses when the supplier modifies the application. If the services received by the group are not separable, the costs are recognised as expenses when the supplier provides access to the application during the term of the agreement..

Patents, licences and trademarks

The cost of patents, licences and trademarks with finite useful lives are capitalised on the balance sheet under intangible assets and depreciated on a straight-line basis over their useful lives of 5–10 years.

Emission allowances

The Group has received emission allowances in accordance with the European Union Emissions Trading System. Allowances are treated as intangible assets and are measured at acquisition cost. The acquisition cost of emission allowances received without con-sideration is zero. Emission allowances are used simultaneously with the carbon dioxide emissions generated during their validity period. Earnings from emission allowances sold are recognised in other operating income. If the emission allowances received without consideration are not sufficient to cover the amount of the actual emissions, the Group purchases additional allowances from the market.

The allowances purchased are recognised in intangible rights at the fair value on the acquisition date. The provision to fulfil the obligation to return the emission allowances is recognised at fair value on the closing date of the reporting period if the emission allowances received without consideration and purchased are not sufficient to cover the amount of the actual emissions.

116

Impairment testing

Depreciation is not recognised for assets with indefinite useful lives. Instead, such assets are tested for impairment annually. Assets that are subject to depreciation are always tested for impairment when events or changes in conditions indicate that it is possible that the monetary amount corresponding to the book value of the assets might not be recoverable.

Cash-generating units are reporting segments or smaller units for which a utility value can be defined.

The recoverable amount is the higher of the fair value of an asset less the cost of sale, and its value in use. Value in use is the estimated future net cash flows, discounted to their present value, expected to be derived from said asset or cash-generating unit.

An impairment loss is recognised if the carrying amount of the asset is higher than its recoverable amount. If the impairment loss concerns a cash-generating unit, it is first allocated to decrease the goodwill of the cash-generating unit, and thereafter to decrease the other assets of the unit on pro-rata basis. In connection with the recognition of the impairment loss, the useful life of the depreciated asset is re-evalu-ated. An impairment loss recognised for an asset other than goodwill is reversed if a change has taken place in the estimates used to deter-mine the recoverable amount of the asset. However, the maximum reversal of an impairment loss amounts to no more than the carrying amount of the asset if no impairment loss had been recognised. An impairment loss recognised on goodwill is not reversed under any cir-cumstances. Metsä Board carries out impairment testing once a year, during the fourth quarter, based on the situation on 30 September, or more frequently if signs of a possible impairment are detected.

Impairment testing 2024

Metsä Board carries out impairment testing once a year, during the fourth quarter, based on the situation on 30 September, or more frequently if signs of a possible impairment are detected.

The group did not recognise impairments based impairment testing in 2024. In the testing carried out in 2024, a somewhat potential change in any individual key assumption would not lead to the recognition of an impairment.

The group’s key impairment testing and key assumptions in the situation on 30 September 2024:

Cash-generating unit

Goodwill

EUR million

Brand

EUR million

Discount rate after taxes on 30 September 2024

Discount rate after taxes on 30 September 2023

Long-term growth rate on 30 September 2024

Long-term growth rate on 30 September 2023

Paperboard industry

Folding boxboard 1)

35.4

3.1

6.8

7.9

2.0

2.0

Liner 1)

22.0

1.9

6.8

7.9

2.0

2.0

Market pulp 1)

7.9

2.0

2.0

1)Metsä Board’s share of Metsä Fibre’s recoverable cash flow, the book value and the goodwill included in the balance sheet item “Investments in associates and joint ventures” (EUR 45.2 million) and other intangible assets with unlimited economic life (EUR 5.6 million), are allocated to cash flow generating units in proportion to their pulp purchases.

The recoverable amounts of cash-generating units are based on calculations of value in use. The management’s key estimates in the calculations concern the development of delivery volumes and sales prices, the development of costs related to key raw material costs and other costs, as well as the discount rate and the long-term growth rate. The re-coverable amounts are based on five-year projections and the resulting, steadily growing cash flows. The initial value used for the key assumptions of cash flows – prices and variable costs – after the forecast period is the average of the five-year forecast period. The value used for delivery volumes and fixed costs is the value of the forecast period’s fifth year. The key testing assumptions are management estimates and forecasts obtained from external sources of information.

The discount rate used is the weighted average cost of capital (WACC). When calculating the WACC, the cost of debt takes into account the market-based view of the credit risk premium.

Impairments in the value of intangible assets and property, plant and equipment are presented in notes 4.1 and 4.2.

118

Consolidated financial statements | Metsä Board Annual review 2024

4.2 Property, plant and equipment

Accounting principles

Property, plant and equipment are measured at acquisition cost less accumulated depreciation and impairment losses.

The acquisition cost includes costs that are directly incurred in the acquisition of an item of property, plant or equipment. Qualifying external borrowing costs resulting directly from the acquisition, con-struction or manufacture of an item of property, plant or equipment are capitalised as part of the acquisition cost of property, plant and equipment.

If a piece of property, plant or equipment consists of several com-ponents with differing useful lives, each component is handled as a separate item. In that case, the expenses related to replacing the component are capitalised, and any book value remaining at the time of replacement is derecognised on the balance sheet.

Spare parts, spare equipment and maintenance supplies are recog-nised in property, plant and equipment when they fulfill the criteria for recognition of property, plant and equipment. Otherwise, such commodities are classified as inventories.

Significant investments in refurbishments and improvements are capitalised on the balance sheet and depreciated over the remaining useful life of the main asset related to such investments.

Repair and maintenance costs are recognised as expenses when they are incurred.

Property, plant and equipment is depreciated on a straight-line basis over the estimated useful lives. Depreciation is not recognised for owned land and water.

Estimated useful lives

Buildings and constructions20–40 years

Machinery and equipment

Heavy power plant machinery 20–40 years

Other heavy machinery15–20 years

Lightweight machinery and equipment5–15 years

Other tangible assets5–20 years

The residual value of an asset, the financial useful life and depreciation method are reviewed at least annually, at the end of each financial period, and adjustments are made when necessary to reflect changes in the expected financial benefit of the asset.

Gains and losses arising from the sale and decommissioning of items of property, plant and equipment are recognised in other operating income and expenses. Sales gains or losses are calculated as the difference between the sales price and the remaining acquisition cost.

Government grants related to the acquisition of assets are presented as adjustments of the acquisition cost on the balance sheet and recog-nised as income in the form of lower depreciation during the useful life of the asset.

Leases

The Group has leased various land areas, properties, equipment and vehicles. When the leased asset is available for the Group’s use, A fixed asset item and a corresponding liability of the lease is recognised. Paid rents are divided into liabilities and finance costs. The finance cost is included in profit or loss over the lease term in such a way that the interest rate of the remaining debt balance is the same during each period. The leased fixed asset is subject to straight-line depreciations over the asset’s economic life or the lease term, depending on which of them is shorter.

Assets and liabilities arising from leases are initially measured at the present value. Lease liabilities include fixed payments, less any lease incentives receivable; amounts expected to be payable by the lessee under residual value guarantees; the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined, or the Group’s incre-mental borrowing rate. The leased fixed assets are measured at cost, which includes the amount of the initial measurement of the lease lia-bility; any lease payments made at or before the commencement date, less any lease incentives received; any initial direct costs incurred; and any costs incurred by restoring the site on which it is located.

Some of the leases include options to extend or terminate, which are largely available only for the Group, not the lessor.

Payments related to short-term leases or leases where the value of the underlying asset is low are recognised as costs on a straight-line basis. A lease with a lease term of 12 months or less is considered a short-term lease. Assets of a low value include mainly ICT and office equipment.

Key estimates and judgments

Property, plant and equipment

Estimates concerning the residual value and useful life of property, plant and equipment, as well as the selection of the depreciation method, require significant management judgement.

Leases

When determining the lease term, the management accounts for all relevant facts and circumstances that create an economic incentive to exercise the option to extend the lease, or not to exercise the option to terminate the lease. Options to extend the lease (or the time sub-sequent to an option to terminate) are accounted for in the lease term only if the extension of the lease (or the decision not to terminate the lease) is reasonably certain. The possible future cash flows of EUR 6.1 million have not been included in the lease liability because the exten-sion of the lease (or the decision not to terminate it) is not reasonably certain. The Group will conduct a reassessment upon the occurrence of either a significant event or a significant change in circumstances that is within the control of the lessee and affects the assessment.

119

Consolidated financial statements | Metsä Board Annual review 2024

Property, plant and equipment 2023

Land and water areas

Buildings and constructions

Machinery and equipment

EUR million

Owned

Leased

Owned

Leased

Owned

Leased

Acquisition cost, 1 Jan.

12.4

2.4

472.4

12.2

2,782.3

17.5

Translation differences

0.0

0.7

0.0

8.8

0.0

Additions

4.8

16.2

3.1

222.6

2.6

Decrease

-1.1

-1.3

-1.8

-5.4

21.5

-3.2

Transfers between items

17.4

-37.6

Acquisition cost, 31 Dec.

16.1

1.1

504.9

9.9

2,997.6

16.9

Accumulated depreciation and impairment charges 1 Jan.

-0.4

-0.7

-281.7

-8.4

-2,063.3

-8.3

Translation differences

0.0

-0.3

0.1

-2.3

0.0

Accumulated depreciation on deductions and transfers

0.1

1.6

5.2

47.5

3.2

Depreciation for the period

-0.2

-10.0

-2.3

-74.8

-4.3

Accumulated depreciation and impairment charges 31 Dec.

-0.4

-0.8

-290.4

-5.3

-2,092.9

-9.4

Book value, 1 Jan.

12.0

1.7

190.7

3.9

719.0

9.2

Book value, 31 Dec.

15.7

0.4

214.6

4.5

904.7

7.4

Other tangible assets

Construction in progress

Total

Total

EUR million

Owned

Owned

Owned

Leased

Total

Acquisition cost, 1 Jan.

23.0

163.2

3,453.3

32.1

3,485.5

Translation differences

0.2

-2.2

7.5

-0.1

7.4

Additions

4.6

-36.7

211.5

5.7

217.2

Decrease

-0.3

-73.1

-54.8

-9.9

-64.7

Transfers between items

20.1

-0.1

-0.1

Acquisition cost, 31 Dec.

27.5

71.4

3,617.5

27.8

3,645.3

Accumulated depreciation and impairment charges 1 Jan.

-14.8

-2,360.2

-17.4

-2,377.6

Translation differences

0.0

-2.6

0.1

-2.5

Accumulated depreciation on deduction and transfers

0.0

49.0

8.5

57.5

Depreciation for the period

-0.9

-85.6

-6.7

-92.4

Accumulated depreciation and impairment charges 31 Dec.

-15.7

-2,399.4

-15.5

-2,414.9

Book value, 1 Jan.

8.2

163.2

1,093.2

14.7

1,107.9

Book value, 31 Dec.

11.8

71.4

1,218.1

12.3

1,230.4

Leases

EUR million

2024

2023

Costs related to short-term leases

-0.3

-0.3

Costs of leases in which the underlying asset is of low value

-2.2

-2.2

Interest expenses

-0.5

-0.4

Cash outflow for leases

-7.3

-7.6

Disclosures on lease liabilities are presented in Note 5.5 (Financial liabili-ties) and 5.6 (Management of financial risks).

Impairments

Year 2024, the impairment losses include EUR -7.6 million from the write-down of the Kaskinen folding boxboard mill’s preliminary study.

Borrowing costs

Borrowing costs capitalised totalled to EUR 0.0 million (2.0). The average interest rate used in capitalisation was 0.0% (1.9%).

121

4.3 Other investments

Accounting principles

Other investments consist of unlisted equity investments. The most significant of these is the Group’s holding in Pohjolan Voima. This investment is unlisted and strategic in nature, serving the Group’s long-term energy sourcing needs. This being the case, the Group classifies its shares in Pohjolan Voima as financial assets at fair value recognised under other items of comprehen-sive income. Changes in their fair value are presented in the fair value reserve, accounting for the tax effect. When the investment is abandoned, the fair value changes accumulated in the equity are transferred to the retained earnings from the fair value fund.

The Group classifies its other equity financial assets as financial assets at fair value to be recognised as financial assets through profit and loss.

The fair values of shares other than listed shares are determined using various valuation models, such as the price levels of recent transactions and valuation methods based on the present value of discounted cash flows. As far as possible, the valuation methods are founded on market-based valuation factors. Unlisted shares are classified in level 3 of the fair value hierarchy. The levels of the fair value hierarchy are presented in note 5.7.

Key estimates and judgements

Fair value measurement

The application of valuation models to measuring fair value requires judgement concerning the selection of the method to be applied, as well as valuation factors required by the chosen method that are based on the price and interest levels prevailing in the market on the end date of each reporting period. The most significant item of other investments that has been valued by using a valuation model is the Group’s investment in the shares of Pohjolan Voima Oyj.

The price of these shares is determined based on the present value of discounted cash flows. Key factors affecting cash flows include the price of electricity, inflation expectations and the discount rate. The 12-month moving average of electricity futures prices has been used as the energy price for the first eight years. Subsequent prices are based on a long-term market price forecast.

The carrying amount of the Group’s shares in Pohjolan Voima was EUR 218.3 million (253.0) on the balance sheet on 31 December 2024. The carrying value of other investments is estimated to change by EUR -8.1 million (-9.9) and EUR 8.5 million (10.3) should the rate used for discounting the cash flows change by 0.5 percentage points from the rate estimated by the management. The carrying value of other investments is estimated to change by EUR 55.6 million (61.6) should the energy prices used in calculating the fair value differ by 10% from the prices estimated by the management.

EUR million

2024

2023

Pohjolan Voima Oyj

218.3

253.0

Other unlisted shareholdings

1.4

1.4

Other investments total

219.7

254.4

The most important unlisted shareholding under other investments consists of a 2.6% stake in Finnish energy company Pohjolan Voima Oyj, which produces electricity and heat for its shareholders in Finland. Pohjolan Voima trades with its shareholders at prices based on production costs, which generally are lower than market prices. The Group is entitled, through the B shares of Pohjolan Voima, to a share of approximately 5.2% of the energy generated by the Olkiluoto 1 and Olkiluoto 2 nuclear power plants and, through the B2 shares of Pohjolan Voima, to a share of 1.5% of the energy generated by the Olkiluoto 3 nuclear power plant, now being deployed.

The ownership is measured quarterly at fair value on share series basis by using the average of discounted cash flow method and valuation based on earlier transactions. The weighted average cost of capital used was 5.51 (5.35) %. The acquisition cost of shares in Pohjolan Voima Oyj is EUR 28.3 million (28.3) and the fair value EUR 218.3 million (253.0). The change in fair value was due to an updated long-term price forecast for the electricity used in the shares’ valuation model.

Shareholder agreement restricts sale of shares of Pohjolan Voima to buyers that are not existing shareholders.

122

Other comprehensive income after taxes 2024

Equity attributable to members of parent company

Milj. euroa

Translation differences

Fair value and

other reserves

Retained earnings

Total

Non-con-trolling interest

Total equity

Items that will not be reclassified to profit or loss

Actuarial gains/losses on defined benefit pension plans

-0.9

-0.9

-0.9

Financial assets at fair value through other comprehensive income

-35.4

-35.4

-35.4

Share of profit from other comprehensive income of associated company

Income tax relating to items that will not be reclassified

6.9

0.5

7.4

7.4

Total

-28.5

-0.4

-28.9

-28.9

Items that may be reclassified to profit or loss

Cash flow hedges

Currency hedges

Gains and losses recorded in equity

-47.6

-47.6

-47.6

Transferred to adjust Sales

2.2

2.2

2.2

Interest hedges

Gains and losses recorded in equity

-1.3

-1.3

-1.3

Commodity hedges

Gains and losses recorded in equity

5.5

5.5

0.0

5.6

Transferred to adjust purchases

2.0

2.0

0.0

2.0

Share of profit from other comprehensive income of associated company

-13.8

-13.8

-13.8

Cash flow hedges total

-52.9

-52.9

-52.9

Translation differences

-16.7

-16.7

-5.0

-21.7

Translation differences total

-16.7

-16.7

-5.0

-21.7

Income tax relating to items that may be reclassified

7.8

7.8

7.8

Total

-16.7

-45.1

-61.8

-5.0

-66.8

Other comprehensive income, net of tax

-16.7

-73.6

-0.4

-90.7

-5.0

-95.7

Other comprehensive income after taxes 2023

Equity attributable to members of parent company

Milj. euroa

Translation differences

Fair value and

other reserves

Retained earnings

Total

Non-con-trolling interest

Total equity

Items that will not be reclassified to profit or loss

Actuarial gains/losses on defined benefit pension plans

-1.0

-1.0

-1.0

Financial assets at fair value through other comprehensive income

-87.8

-87.8

-87.8

Share of profit from other comprehensive income of associated company

-3.4

0.0

-3.4

-3.4

Income tax relating to items that will not be reclassified

18.2

0.2

18.5

18.5

Total

-72.9

-0.7

-73.6

-73.6

Items that may be reclassified to profit or loss

Cash flow hedges

Currency hedges

Gains and losses recorded in equity

7.6

7.6

-0.7

6.8

Transferred to adjust Sales

6.6

6.6

6.6

Interest hedges

Gains and losses recorded in equity

-1.7

-1.7

-1.7

Commodity hedges

Gains and losses recorded in equity

-14.2

-14.2

0.0

-14.3

Transferred to adjust purchases

10.6

10.6

0.0

10.7

Share of profit from other comprehensive income of associated company

-5.7

-5.7

-5.7

Cash flow hedges total

3.2

3.2

-0.7

2.5

Translation differences

-1.9

-1.9

-0.8

-2.8

Translation differences total

-1.9

-1.9

-0.8

-2.8

Income tax relating to items that may be reclassified

-1.8

-1.8

0.2

-1.6

Total

-1.9

1.4

-0.5

-1.4

-1.9

Other comprehensive income, net of tax

-1.9

-71.5

-0.7

-74.1

-1.4

-75.6

128

Consolidated financial statements | Metsä Board Annual review 2024

5.2 Financial income and expenses

Accounting principles

Interest income and expenses are recognised using the effective interest rate method.

Dividend income is recognised when the right to receive a pay-ment is established.

Borrowing costs are generally recognised as an expense in the period in which they are incurred. When an item of intangible asset or property, plant or equipment is involved in a major and long-term investment project, the borrowing costs directly due to the acquisition, construction or production of the asset are included in the asset’s acquisition cost.

The Group presents net interest income and expenses related to defined benefit plans as financial income and expenses.

EUR million

2024

2023

Exchange differences

Commercial items

5.0

1.5

Hedging, hedge accounting not applied

-7.8

1.3

Other items

0.0

-0.2

Total

-2.8

2.6

Other financial income

Other interest and financial income

0.1

Interest income on loans, other receivables and cash and cash equivalents

9.1

9.8

Dividend income

0.1

0.0

Total

9.3

9.9

Other financial expense

Interest expenses on financial liabilities carried at amortised cost using the effective interest method

-16.9

-12.0

Other financial expenses

-0.4

-0.4

Total

-17.3

-12.4

Valuation of financial assets and liabilities and interest and other financial expenses, total

-10.8

0.1

The Russian ruble-denominated translation differences accumulated since June 2022 as a consequence of the discontinuation of Russian business operations, amounting to EUR 0.0 million (-0.3), have been reported in other exchange rate differences in the income statement. Interest expenses have been capitalized as a part of the acquisition costs of investments in the amount of EUR 0.0 million (2.0). On 13 May 2024, Metsä Board completed a corporate restructuring in which control of the Russian subsidiaries was transferred outside the Group.

5.3 Other long-term assets

EUR million

2024

2023

Loan receivables

0.0

2.5

Defined benefit pension plans (Note 3.5)

3.4

3.4

Other receivables and accrued income

1.0

0.4

Total

4.4

6.3

129

5.6 Management of financial risks

The financial risks associated with business operations are managed in accordance with the financial policy endorsed by the Board of Directors and the senior management of the company. The policy defines focal instructions on the management of foreign currency, interest rate, liquidity and counterparty risks, and for the use of derivative financial instruments. Correspondingly, commodity risks are managed according to the compa-ny’s commodity risk policy. The purpose is to protect the company against major financial and commodity risks, to balance the cash flow and to allow the business units time to adjust their operations to changing conditions.

Metsä Group Treasury Oy is specialized in finance and functions as the Group’s internal bank. Metsäliitto Cooperative´s holding is 100% of the company. Financial operations have been centralised to Metsä Group Treasury, which is in charge of managing the Group companies’ financial positions according to the strategy and financial policy and providing necessary financial services.

Foreign currency risk

Metsä Board’s foreign currency exposure consists of the risks associated with foreign currency flows, translation risk of net investments in foreign entities and economic currency exposure. Most of the company’s costs are incurred in the euro zone and to some extent in Sweden, but a significant part of the sales is received or priced in other currencies. Sales may therefore vary because of changes in exchange rates, while production costs remain unchanged. The foreign currency transaction exposure is consisting of foreign currency denominated sales and costs. The exposure is including foreign currency denominated balance sheet exposure consist-ing of trade receivables and trade payables and 50% share of the annual contracted or estimated net currency cash flow.

The main currencies of the Metsä Board’s foreign currency transaction exposure are the US dollar, the Swedish krona and the British pound. The share of dollar is 54% (2023: 54), share of Swedish krona is 36% (35) and share of pound is 8% (9). A strengthening of the dollar and the pound has a positive impact on the financial result and a weakening a negative impact. A weakening of the Swedish krona has a positive impact on the result of the company. From other currencies Metsä Board has currency risk in Canadian dollar. The hedging policy is to keep the balance sheet exposure and 50% of annual cash flow of contracted or estimated currency flows consistently hedged. The amount of hedging may deviate from the normal level by 40% in either direction. The Board of Directors of Metsä Board is deciding on hedging levels significantly deviating from the norm set out in the financial policy. The amount of currency-specific hedging depends on current exchange rates and market expectations, on the interest rate differences between the currencies and the significance of the exchange rate risk for the financial result of the company. The transaction exposure is mainly hedged by forward transactions but also by the use of foreign currency loans and currency options.

At the end of the financial period, the foreign exchange transaction exposure had been hedged 7.9 months on average (7.6) being 132% of the hedging norm (126). During the financial period, the hedging level has varied between 7 and 8 months (7-8) being between 120 and 132% of the norm (117-131). The dollar’s hedging level was 7.8 months (7.4) being 130% of the norm (124). The Swedish krona’s hedging level was 8.4 months (8.5) being 139% of the norm (141). The pound’s hedging level was 7.2 months (6.0) being 120% of the norm (100). Hedge accounting has been applied

to hedging of transaction exposure and forwards and options allocated to hedge accounting have been used to hedge the portion of highly probable forecast sales of the currency transaction exposure.

The translation risk of a net investment in a foreign entity is generated from the consolidation of the equity of subsidiaries outside the euro area into euros in the consolidated financial statements. Hedging of equity has been discontinued.

Interest rate risk

The interest rate risk is related in the interest bearing receivables and loans, working capital financing and currency hedging. The most signifi-cant currencies in risk management are the euro, the US dollar, the Swed-ish krona and British pound. The objective of the interest rate risk policy is to minimise the negative impact of interest rate changes on the company’s result and the financial position, and to optimise financing costs within the framework of risk limits. The effect of interest rate changes on financial costs depends on the average interest fixing time of interest bearing assets and liabilities, which is measured in the company by duration. As duration is lengthening the rise of interest rates affects more slowly the interest expenses of financial liabilities. The maturity of the loan portfolio can be influenced by adjusting between floating-rate and fixed-rate loans and by using interest rate swaps.

The average interest duration norm based on the Group’s financial policy is 24 months. The duration can, however, deviate between 6 to 36 months from the hedging policy norm so that the decision of a larger deviation has to be made by the Board of Directors. The average duration of loans was 19.8 months at the end of the year (30.6). During the reporting period duration has varied between 20 and 29 months (31–36). Duration is lengthened by the bond of EUR 250 million. Of interest-bearing liabilities 41% (15) is subjected to variable rates and the rest to fixed rates and the average interest rate at the end of 2024 is 2.7% (2.6). At the end of 2024, an increase of 1% in interest rates would decrease net interest rate costs of the next 12 months by 0.5 million euros (decrease 1.8).

Company has applied cash flow hedge accounting to interest rate swaps by which floating-rate financing has been converted to fixed-rate financing. The gross nominal volume of interest rate derivative at the time of financial statements is EUR 50.0 million (50.0) and the interest rate swap matures in April 2025.

Commodity risk

IIn the hedging of commodity risks company applies risk management policies defined separately for each selected commodity. According to the policy, the management of commodity risks with regard to financial hedges is accomplished centralized by Metsä Group Treasury based on the strategy approved by Board of Directors of Metsä Board. The commodity hedging policy is applied to the management of the natural gas, light and heavy fuel oil and also transactions related to Emission allowances are managed by Metsä Group Treasury. Hedge accounting has been applied to all commodity hedging. According to the commodity hedging policy an 80% hedge level of the estimated net position during the first 12 month period has been set as a hedging norm and the hedge ratio can vary by 20% in either direction. The Metsä Board Board of Directors makes signifi-cant strategic decisions.

Metsä Board is hedging the price risk of natural gas purchases by using financial hedges. Metsä Board is hedging also the gas oil, heavy fuel oil

132

EUR million

2024

2023

Interest-bearing net liabilities/comparable EBITDA

2.0

0.7

Net gearing ratio, %1)

18

7

Interest-bearing borrowings

527.4

438.1

./. Liquid funds

182.6

291.6

./.Interest-bearing receivables

0.0

2.5

Net interest bearing liabilities

344.9

144.0

Equity attributable to shareholders

of parent company

1,743.0

1,897.0

+ Non-controlling interest

164.7

155.6

Total Equity

1,907.7

2,052.6

Operating profit

62.3

120.8

Depreciations and impairments

113.6

93.8

EBITDA

175.9

214.6

Other operating income

2.7

Share of result

1.4

-4.1

Other operating expenses

0.5

Comparable EBITDA

175.0

216.0

1)Net gearing ratio = Interest-bearing net liabilities / Shareholders’ equity

REPAYMENT OF

NON-CURRENT

LOANS

EUR million

BREAKDOWN

OF CURRENCY exposure

%

USD 54%

SEK 36%

GBP 8%

Others 2%

Financial covenants of external loans

In Metsä Board`s certain financial contracts the financial covenants have been set regarding financial performance and capital structure. Other covenants in the company’s loan agreements are customary terms and conditions including for example a negative pledge, restrictions on major asset disposals, limitations on subsidiary indebtedness, restrictions on changes of business and mandatory prepayment obligations upon a change of control of the Group. Metsä Board loan agreements and credit facility agreement include a financial covenant that is related to net gearing. Metsä Board has been in compliance with its covenant during the financial periods 2024 and 2023. In case the company could not meet its obligations as defined in financial contracts and in order to avoid a breach of contract that could have an adverse effect on the company’s financial position, it would need to renegotiate its financial arrangements, payback its loans or get its debtors to give up their claims to meet these obligations.

Hedging of foreign exchange transaction exposure 31.12.2024

Annual transaction exposure

EUR million

USD

GBP

SEK

AUD

CAD

Other long

Other short

Total

Transaction exposure, net (mill. currency units)

888

99

-6,569

5

45

Transaction exposure, net (EUR million)

855

119

-573

3

30

2

-2

1,584

Transaction exposure hedging (EUR million)

-557

-72

399

-15

-1,043

Hedging at the end of the year (months)

7.8

7.2

8.4

6.0

7.9

Average hedging in 2024 (months)

7.1

6.3

8.4

6.0

7.4

Average rate of hedging at the end of the year

1.0931

0.8485

11.4789

Hedging of foreign exchange transaction exposure 31.12.2023

Annual transaction exposure

EUR million

USD

GBP

SEK

AUD

CAD

Other long

Other short

Total

Transaction exposure, net (mill. currency units)

763

102

-4,969

5

37

Transaction exposure, net (EUR million)

691

117

-448

3

25

5

1,289

Transaction exposure hedging (EUR million)

-427

59

316

-12

-814

Hedging at the end of the year (months)

7.4

6.0

8.5

6.0

7.6

Average hedging in 2023 (months)

6.8

6.0

8.8

6.0

7.4

Average rate of hedging at the end of the year

1.0900

0.8715

11.6318

25

26

27

28

29

30-

300

250

200

150

100

50

0

134

Consolidated financial statements | Metsä Board Annual review 2024

Net investments in a foreign entity 31.12.2024

Equity exposure

EUR million

USD

GBP

SEK

Others

Total

Equity (million currency units)

100

5

8,661

Equity (EUR million)

96

6

756

2

860

Net investments in a foreign entity 31.12.2023

Equity exposure

EUR million

USD

GBP

SEK

Others

Total

Equity (million currency units)

124

4

7,745

Equity (EUR million)

112

4

698

3

817

Interest rate risk / duration and re-pricing structure of loans (incl. interest rate derivatives) 31.12.2024

Loan

amount

(EUR million)

Duration

(months)

Average

interest rate

(%)

Interest rate

sensitivity 1)

(EUR million)

Re-pricing structure of interest rates of loans

1–4/2025

5–8/2025

9–12/2025

2026

2027

2028

>2028

528

19.8

2.7

-0.5

200

8

8

12

265

15

21

Interest rate risk / duration and re-pricing structure of loans (incl. interest rate derivatives) 31.12.2023

Loan

amount

(EUR million)

Duration

(months)

Average

interest rate

(%)

Interest rate

sensitivity 1)

(EUR million)

Re-pricing structure of interest rates of loans

1–4/2024

5–8/2024

9–12/2024

2025

2026

2027

>2027

438

30.6

2.6

-1.8

53

7

7

64

14

262

30

1)Interest rate sensitivity is an estimate of the effect of an interest rate change of one percent in one direction on net interest cost based on year end exposure

Hedging of natural gas price risk exposure

Tons

31 Dec 2024

31 Dec 2023

Natural Gas exposure, net

377

377

Natural Gas hedging

307

211

Hedging at the end of the year (%)

81

56

Average price of hedging at the end of the year (€/tons)

36.32

51.09

Natural Gas price risk is hedged based on defined risk management policy by financial contracts. Metsä Board position is hedged using TTF financial contracts.

Hedging of logistics oil price risk exposure

Tons

31 Dec 2024

31 Dec 2023

Oil exposure, net

51,072

65,322

Oil hedging

36,119

39,660

Hedging at the end of the year (%)

71

61

Average price of hedging at the end of the year (€/tons)

467.13

468.84

Logistic oil price risk is hedged based on defined risk management policy by financial contracts. Metsä Board logistic oil exposure includes positions with bunker clause. Metsä Board is hedging gas oil, heavy fuel oil and marine fuel oil purchases.

135

Market risk sensitivity 2024

Impact on equity exposure and annual transaction exposure

MEUR

Impact on

financial assets

and liabilities

Impact on

net equity of

foreign entities

Impact on annual

transaction expo-

sure (cash flow)

Impact on annual

transaction expo-

sure (cash flow)

incl. hedging

Interest rate risk (100 bp rise in interest rates)

Effect on profit

-0.5

-0.2

Effect on other change in equity

0.3

Commodity risk (electricity price + 20%)

Effect on profit

-8.2

-1.9

Effect on other change in equity

6.3

FX risk (USD - 10%)

Effect on profit

1.3

-85.5

-29.8

Effect on other change in equity

48.0

-9.6

FX risk (GBP - 10%)

Effect on profit

0.1

-11.9

-4.8

Effect on other change in equity

6.4

-0.6

FX risk (SEK - 10%)

Effect on profit

-1.3

57.3

17.4

Effect on other change in equity

-36.0

-75.6

Market risk sensitivity 2023

Impact on equity exposure and annual transaction exposure

MEUR

Impact on

financial assets

and liabilities

Impact on

net equity of

foreign entities

Impact on annual

transaction expo-

sure (cash flow)

Impact on annual

transaction expo-

sure (cash flow)

incl. hedging

Interest rate risk (100 bp rise in interest rates)

Effect on profit

1.8

2.3

Effect on other change in equity

0.5

Commodity risk (electricity price + 20%)

Effect on profit

-8.6

-3.3

Effect on other change in equity

5.3

FX risk (USD - 10%)

Effect on profit

3.9

-69.1

-21.2

Effect on other change in equity

51.3

-11.2

FX risk (GBP - 10%)

Effect on profit

0.1

-11.7

-4.1

Effect on other change in equity

5.8

-0.4

FX risk (SEK - 10%)

Effect on profit

-3.1

44.8

9.5

Effect on other change in equity

-31.6

-69.8

Items with + sign = positive effect = increase of assets / decrease of liabilities / increase of cash flow

Items with - sign = negative effect = decrease of assets / increase of liabilities / decrease of cash flow

An entity to required to disclose a sensitivity analysis for each type of market risk to which the entity is exposed at the reporting date, showing how profit or loss and equity would have been affected by changes in the relevant risk variable that were reasonably possible at that date. The Group has recognised interest rates, electricity prices and foreign exchange rates as its key market risks and has set 1% interest rate rise, 20% rise in electricity price and 10% weakening of USD, GBP and SEK as reasonably possible risk variables. These currencies represent over 97% of Group’s annual transaction exposure. The nature of the market price risk is relatively linear so that the size of effects of opposite market price changes do not essentially differ from the presented figures. The scenarios have been calculated by using regular principles of calculating market values of financial instruments described in the Group Accounting policies. Figures at the reporting date reflect quite well the average market risk conditions throughout the reporting period.

Additionally the Group is presenting figures describing the effects of the risk variables to its equity and annual transaction exposure (cash flow) to present a broader picture about market risks of interest rates, electricity prices and foreign exchange rates. Annual cash flows are based on esti-mates, and not not existing commercial contracts. The weakening of USD and GBP has a negative impact on annual cash flow and the weakening of SEK has a positive impact. Hedges reduce this impact depending on hedging strategy. The impact on equity of foreign entities is arising from the consolidation of subsidiaries to the Group consolidated accounts. The rise of electricity price has a negative impact on cash flow. As according to hedging policy the electricity price risk of the nearest year has mostly been hedged, the impact including hedges remains minor.

136

Consolidated financial statements | Metsä Board Annual review 2024

Maturity of financial liabilities and related financial expenses 2024

EUR million

2025

2026

2027

2028

2029

2030–

Total

Bonds

250.0

250.0

Loans from financial institutions

11.8

111.8

11.8

11.8

11.8

5.9

164.7

Finance lease liabilities

6.7

4.5

3.2

1.7

1.2

1.2

18.5

Non-current interest-bearing liabilities total

18.4

116.3

265.0

13.5

13.0

7.0

433.2

Current interest-bearing liabilities

96,4

96,4

Trade payables ja other liabilities

322,6

322,6

Financial liabilities total

437.5

116.3

265.0

13.5

13.0

7.0

852.2

Financial expenses total

11.4

10.3

7.3

0.3

0.2

0.0

29.4

Financial liabilities and expenses total

448.8

126.6

272.2

13.8

13.1

7.1

881.6

Guarantee agreements

0.1

0.4

0.3

0.7

Derivatives

Currency derivative, liabilities

1,356.5

1,356.5

Currency derivative, receivables

-1,332.2

-1,332.2

Interest rate swaps

-0.3

-0.3

Commodity derivatives

-3.6

-3.6

Derivatives, net

20.5

20.5

Maturity of financial liabilities and related financial expenses 2023

EUR million

2024

2025

2026

2027

2028

2029–

Total

Bonds

249.2

249.2

Loans from financial institutions

11.8

111.8

11.8

11.8

11.8

17.6

176.5

Finance lease liabilities

5.7

3.8

1.8

1.1

0.3

0.7

13.5

Non-current interest-bearing liabilities total

17.5

115.6

13.6

262.8

12.1

18.4

440.0

Trade payables ja other liabilities

316.2

316.2

Financial liabilities total

333.7

115.4

13.6

262.8

12.1

18.3

755.8

Financial expenses total

12.5

8.9

7.4

7.3

0.3

0.2

36.5

Financial liabilities and expenses total

346.2

124.3

21.0

270.1

12.4

18.5

792.4

Guarantee agreements

0.2

0.2

1.3

1.6

Derivatives

Currency derivative, liabilities

1,144.3

1,144.3

Currency derivative, receivables

-1,168.1

-1,168.1

Interest rate swaps, liabilities

-0.7

-0.9

-1.5

Interest rate swaps, receivables

4.0

4.0

Commodity derivatives, liabilities

-20.5

-0.9

-21.4

Commodity derivatives, receicables

-0.2

-0.2

Derivatives, net

-20.5

-0.9

-21.4

The cash flows of lease liabilities include both debt repayment and finance expense . The table describes the maturity distribution of financial liabilities based on contracts. The figures are undiscounted. The balance sheet value of lease liabilities was EUR 17.2 million (12.8). The balance sheet value of for-eign currency derivative liabilities was EUR 29.5 million (6.0) and the balance sheet value of foreign currency derivative assets was EUR 5.2 million (29.8).

137

5.7 Classification and fair values of financial assets and liabilities

Classification and fair values of financial assets and liabilities 2024

EUR million

Note

Fair value through profit and loss

Fair value through other comprehensive income

Amortised cost

Total carrying amount

Financial assets

Other non-current investments

4.3

1.4

218.3

219.7

Other non-current financial assets

5.3

0.7

0.7

Trade receivables and other receivables

4.5

240.0

240.0

Cash and cash equivalents

5.4

182.6

182.6

Derivative financial instruments

5.7

1.2

8.0

9.2

Total carrying amount

2.7

226.3

423.2

652.1

Total fair value

2.7

226.3

423.2

652.1

Financial liabilities

Non-current interest-bearing financial liabilities

5.5

411.9

411.9

Current interest-bearing financial liabilities

5.5

115.5

115.5

Trade payables and other liabilities

4.7

322.6

322.6

Derivative financial instruments

5.7

3.1

26.6

29.7

Total carrying amount

3.1

26.6

850.0

879.7

Total fair value

3.1

26.6

849.1

878.8

Classification and fair values of financial assets and liabilities 2023

EUR million

Note

Fair value through profit and loss

Fair value through other comprehensive income

Amortised cost

Total carrying amount

Financial assets

Other non-current investments

4.3

1.4

253.0

254.4

Other non-current financial assets

5.3

2.6

2.6

Trade receivables and other receivables

4.5

219.1

219.1

Cash and cash equivalents

5.4

291.6

291.6

Derivative financial instruments

5.7

1.2

30.3

31.5

Total carrying amount

2.6

283.3

513.3

799.2

Total fair value

2.6

283.3

513.3

799.2

Financial liabilities

Non-current interest-bearing financial liabilities

5.5

421.0

421.0

Current interest-bearing financial liabilities

5.5

17.1

17.1

Trade payables and other liabilities

4.7

316.2

316.2

Derivative financial instruments

5.7

0.4

9.8

10.2

Total carrying amount

0.4

9.8

754.2

764.4

Total fair value

0.4

9.8

743.9

754.1

Trade receivables and other receivables do not include VAT receivables and prepayments and accrued income. Trade payables and other financial liabilities do not include advance payments, VAT payables and accruals and deferred income.

In Metsä Board, all interest-bearing liabilities are valued in the balance sheet at amortised cost based on effective interest method. Fair values are

based on present value of cash flow of each liability or assets calculated by market rate. The discount rates applied are between 1.7–3.6% (1.9–4.3). The fair values of accounts and other receivables and trade payables and other liabilities do not materially deviate from their carrying amounts in the balance sheet.

138

Financial derivatives and hedge accounting

Accounting principles

Derivative contracts are initially recognised on the balance sheet at fair value at cost, and thereafter during their term-to-maturity revalued at their fair value at each reporting date. The fair value of derivatives is presented in non-interest-bearing receivables or liabilities. Gains and losses resulting from recognition at fair value are treated in accounting as required with regard to the intended use of the derivative contract in question. Derivatives are initially classified as either

Hedges of the exposure to changes in the fair value of receivables, liabilities or firm commitments;

Hedges of the cash flow from a highly probable forecast transaction;

Hedges of a net investment in a foreign entity, or

Derivatives to which it has been decided not to apply hedge accounting.

Metsä Board currently applies hedge accounting only to cash flow hedging. When applying hedge accounting at the inception of a hedg-ing relationship, the Group has documented the relationship between the hedged item and the hedging instruments, as well as the hedging strategy observed. To meet the requirements of hedge accounting, the Group has also continuously carried out effectiveness testing to verify that changes in the fair value of the hedging instrument for each hedging relationship cover any changes in the fair value of the hedged item effectively enough, with respect to the hedged risk. Changes in the fair value of the effective portion of derivative instruments that meet the criteria for cash flow hedging are recognised in other items of comprehensive income. The gains and losses recognised in equity are transferred to the income statement when the forecast sale or purchase is realised, and are recognised as an adjustment to the hedged item. If the forecast transaction is no longer expected to occur, the gain or loss accrued in equity is recognised immediately in the income statement.

Derivatives not subject to hedge accounting, as well as the ineffective portion of derivatives subject to hedge accounting, are measured at fair value, and changes in the value of interest rate and currency deriv-atives are recognised in financial items and changes in the value of commodity derivatives are recognised in other income and expenses.

Hedge accounting is applied as cash flow hedging to highly probable cash flows from sales denominated in foreign currencies and contractual cash flows from floating interest rates of loans. In the management of price risks related to commodities, hedge accounting is applied to cash flows from highly probable purchases of electricity, liquefied natural gas (LNG), natural gas, propane, light, heavy and 0.5% fuel oil. The fair values of forward foreign exchange contracts are based on the forward prices prevailing on the balance sheet date based on the present value of cash flows calculated using market data, Currency options are measured at fair value in accordance with the

Black–Scholes model (Level 2). Interest rate swaps are measured at the current value of cash flows, with the calculation being based on the market interest rate yield curve (Level 2). The fair values of derivatives are measured on the basis of publicly quoted market prices (Level 1).

Management of financial risks and hedge effectiveness

The management of the Group’s currency, interest rate and com-modity risks is described in more detail in Note 5.6, Management of financial risks. Note 5.7., Fair values of financial assets and liabilities, includes the fair values and grouping of derivatives. Note 5.1, Equity, includes itemisations of hedge accounting entries in the fair value reserve.

The hedging of the currency flow position is effective, given that there is a direct financial relationship between the hedged sale and the hedging derivative. The spot rate component of a forward contract or the reference value component of a currency option has been determined as the hedged item, and the forward points or the option’s time value are treated as hedging costs subject to amortisation based on the period. Currency flow forecasts are fairly stable, invoicing steady within quarters and months, and forward deals are allocated to each month, due to which the ineffectiveness of hedging usually remains very low. Changes in production or the structure of sales may sometimes lead to ineffectiveness during the validity of a hedging relationship, in which case the hedging is adjusted accordingly.

The hedge accounting of the cash flow from interest rates is primarily effective, given that there is a direct financial relationship between the long-term loans subject to hedging and the hedging interest rate swaps. Ineffectiveness in the hedge relationship derives from any possible differences between the loans and the swaps’ interest rate periods as well as from differences in the reference rates of contract terms. The ineffective portion of interest rate hedging is recognised through profit and loss. Premature loan withdrawals or premature repayment of loans may result in a state of ineffectiveness, in which case the hedging interest rate swaps are reversed or derecognised from hedge accounting, and the change in fair value is recognised in financial items under income.

The hedging of commodity purchases is effective, given that, in lieu of the total purchase price, the hedged item is the same, identical risk component of pricing applied in the hedging derivative. In the hedging of the price risk of electricity, the hedged item is what is referred to as the portion of the system price and the hedging takes place with a sys-tem-priced electricity swap. Correspondingly, the price components of the purchases and the hedging derivative in the hedging of natural gas, propane and fuel oil are identical or nearly identical, in which case the correspondence is monitored by correlation calculations. Commodity purchases are fairly steady and hedges are allocated to each month, due to which the ineffectiveness of the hedging usually remains low. Changes in the use of various commodities may sometimes lead to ineffectiveness during the validity of a hedging relationship, in which case the hedging is adjusted accordingly.

140

Consolidated financial statements | Metsä Board Annual review 2024

Derivatives 2024

Nominal value

Fair value

EUR million

Derivative assets

Derivative liabilities

Fair value net

Fair value through profit and loss

Fair value through other comprehensive income

Interest rate swaps

50.0

0.3

0.3

0.3

Interest rate derivatives

50.0

0.3

0.3

0.3

Currency forward contracts

1,327.0

5.2

25.4

-20.3

-1.9

-18.4

Currency option contracts

496.6

0.0

4.1

-4.0

-4.0

Currency derivatives

1,823.6

5.2

29.5

-24.3

-1.9

-22.5

Oil derivatives

16.8

0.8

0.2

0.7

0.7

Natural gas and propane derivatives

11.1

2.9

2.9

2.9

Commodity derivatives

28.0

3.8

0.2

3.6

3.6

Derivatives total

1,901.6

9.2

29.7

-20.5

-1.9

-18.6

Derivatives 2023

Nominal value

Fair value

EUR million

Derivative assets

Derivative liabilities

Fair value net

Fair value through profit and loss

Fair value through other comprehensive income

Interest rate swaps

50.0

1.5

1.5

1.5

Interest rate derivatives

50.0

1.5

1.5

1.5

Currency forward contracts

1,138.3

27.7

5.7

21.9

0.9

21.0

Currency option contracts

488.7

2.2

0.3

1.9

1.9

Currency derivatives

1,627.0

29.8

6.0

23.8

0.9

22.9

Oil derivatives

18.7

0.2

0.6

-0.5

-0.5

Natural gas and propane derivatives

10.8

3.5

-3.5

-3.5

Commodity derivatives

29.5

0.2

4.1

-4.0

-4.0

Derivatives total

1,706.4

31.5

10.2

21.4

0.9

20.5

Changes in the value of hedge accounting and the effects on profit or loss are presented in Note 5.1 Equity.

Economic effect of the net settlement of instruments under master netting agreements executed

2024

2023

Financial

derivatives

on-balance sheet

Assets and liabilities

related to master netting agreements

Net risk

Financial

derivatives

on-balance sheet

Assets and liabilities

related to master netting agreements

Net risk

Derivative assets

9.2

9.2

31.5

31.5

Derivative liabilities

-29.7

-29.7

-10.2

-10.2

Metsä Board enters into derivative contracts only with Metsä Group Treasury Oy.

141

Cash flow hedge maturities 2024

EUR million

1–6

months

7–12

months

1–5

years

over 5

years

Hedged cash flow total

Interest rate derivatives, hedge accounting

50.0

50.0

Currency rate derivatives, hedge accounting

704.7

290.7

995.4

Currency derivatives, no hedge accounting

164.7

164.7

Commodity derivatives, hedge accounting

14.0

14.0

28.0

Cash flow hedge maturities 2023

EUR million

1–6

months

7–12

months

1–5

years

over 5

years

Hedged cash flow total

Interest rate derivatives, hedge accounting

50.0

50.0

Currency rate derivatives, hedge accounting

613.5

200.3

813.8

Currency derivatives, no hedge accounting

79.9

79.9

Commodity derivatives, hedge accounting

14.7

14.7

29.5

142

Consolidated financial statements | Metsä Board Annual review 2024

6. Income taxes

Accounting principles

Tax expenses in the income statement consist of taxes based on the taxable income for the period, taxes for previous periods, and deferred tax assets and liabilities. The tax effect related to the items recorded in the comprehensive income statement is recognised in the comprehensive income statement. Taxes based on the taxable income for the period are calculated based on taxable income in accordance with the tax rate as it stands in each country at that time.

Deferred tax assets and liabilities are calculated on the temporary differences between the carrying amount and the tax base in accordance with the tax rates enacted as at the balance sheet date.

No deferred taxes are recognised for non-deductible goodwill, and no deferred taxes are recognised for subsidiaries’ undistrib-uted profits to the extent that the difference will not likely realise in the predictable future. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which a deductible temporary difference can be utilised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred taxes are related to the same taxation authority.

The most significant temporary differences arise from depre-ciation of property, plant and equipment; the measurement of other investments and derivatives contracts at fair value; defined benefit plans; unused tax losses; and measurement at fair value in conjunction with acquisitions of business operations.

Key estimates and judgements

The management’s judgement is required for determining the taxes based on the result for the period, deferred tax assets and liabilities, and the extent to which deferred tax assets are recorded. The Group is subject to income taxation in several countries, and the final amount of tax is uncertain for several business operations and calculations. The Group anticipates future tax audits and recognises liabilities based on estimates of whether further taxes will need to be paid. If the associated final tax differs from the originally recorded amounts, the difference has an effect on both the taxes based on the taxable income for the period, and on deferred tax receivables and liabilities.

EUR million

2024

2023

Income taxes for the financial period

-4.6

-12.8

Income taxes from previous periods

-0.2

-0.1

Deferred taxes

-7.3

-6.4

Income taxes total

-12.0

-19.3

Income tax reconciliation

EUR million

2024

2023

Result before tax

51.4

120.9

Calculated tax at Finnish statutory rate of 20.0%

-10.3

-24.2

Effects of differences between Finnish and non-Finnish tax rates

-0.7

-0.6

Tax exempt income

0.9

0.5

Non-deductible expenses

-0.4

-0.2

Restatement of deferred taxes recognised for temporary differences and tax losses in previous years

0.4

-0.4

Use of unrecognised tax losses

0.3

0.7

Share of result from associate companies and joint ventures

-1.8

4.8

Income taxes from previous periods

-0.2

-0.1

Other

-0.4

0.2

Income taxes total

-12.0

-19.3

Effective tax rate, %

23.3

16.0

Taxes reported in other comprehensive income are specified in Note 5.1.

Pillar II, prepared in the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, concerns the global minimum taxation of international groups’ income. The change concerns a new supplementary tax for large groups, which aims to ensure at least a minimum level of taxation of 15% worldwide. If the combined effective tax rate of any of the group’s operating countries, calculated according to the rules on minimum taxation, is below 15%, a supplementary tax will be imposed, which will increase the effective tax rate to 15%. The change will apply to financial periods starting after 31 December 2023 in the country concerned. According to Metsä Group’s current assessment, the global minimum taxation under Pillar II will either have no effect at all or will not have a material impact on the taxes paid by the group.

143

Consolidated financial statements | Metsä Board Annual review 2024

7. Group structure

7.1 Group companies

Accounting principles

Subsidiaries

The financial statements include all of the companies controlled by the Group. Intra-Group shareholding is eliminated using the acquisition method. Intra-Group business transactions, receivables, liabilities and unrealised gains, as well as internal distribution of profits, are elimi-nated on consolidation. Unrealised losses arising from impairment are not eliminated. When necessary, the accounting principles applied by subsidiaries have been adjusted to comply with the Group’s principles.

The parent company’s owners’ and non-controlling interests’ shares of the result for the period and comprehensive income are presented in

the income statement and the distribution of comprehensive income in the statement of comprehensive income. The non-controlling interests’ share of equity is presented as a separate item under equity on the balance sheet.

Joint operations

A joint operation is a joint arrangement in which parties who have joint control in the arrangement have rights concerning the assets related to the arrangement and obligations concerning liabilities. The Group consolidates its proportion of the assets, liabilities, income and expenses of the joint operation in its financial statements.

Subsidiaries and joint operations 31 December 2024

Metsä Board Plc holdings in Group companies

Country

Holding, %

Number of shares

Book value

EUR

Holdings in parent company

Metsäliitto Cooperative

Finland

-

716 041

716,041.03

Subsidiary shares

In Finland

Metsä Board International Oy

Finland

100.00

10,000

23,347,464.13

in other countries

Metsa Board Americas Corporation 1)

USA

99.00

17,820

12,209,018.39

Metsä Board Benelux n.v./s.a 1)

Belgium

0.08

2

0.00

Metsä Board Deutschland GmbH

Germany

100.00

1

0.00

Metsa Board Ibéria S.A.1)

Spain

1.00

100

1,561.63

Metsä Board Sverige Ab

Sweden

100.00

10,000,000

750,358,228.09

Subsidiary shares total

785,916,272.24

Shares and holdings in Group companies

786,632,313.27

1) Total Group holding 100.0%

Subgroup in Finland

Metsä Board International Oy

Metsä Board Benelux n.v./s.a 1)

Belgium

99.92

2,919

140,001.71

Metsä Board France SAS

France

100.00

8,211

418,951.75

Metsa Board Ibéria S.A. 1)

Spain

99.00

147,771

155,316.78

Metsa Board Italia S.r.l.

Italy

100.00

100,000

1,250,691.84

Metsa Board (Middle East & Africa) Ltd

Cyprus

100.00

742,105

214,000.00

Metsä Board Polska Sp. Z o.o.

Poland

100.00

232

54,458.58

Metsa Board Singapore Pte Ltd

Singapore

100.00

10,000

4,036.51

Metsa Board Singapore Pte Ltd Indian Branch

India

100.00

-

-

Metsa Board Turkey LLC

Turkey

100.00

400

2,303.66

Metsa Board UK Ltd

United Kingdom

100.00

2,400

264,172.02

Metsa Board Americas Corporation 1)

USA

1.00

180

4,435.15

Metsa Board Australia and New Zealand Pty Ltd

Australia

100.00

1

41,827.54

Total

2,550,195.54

1) Total Group holding 100.0%

145

EUR

2024

2023

Total property, plant and equipment

Acquisition costs 1.1.

1,794,954,229.12

1,739,951,217.05

Increases

86,691,496.05

71,074,215.16

Decreases

-4,996,819.04

-16,014,722.47

Transfers between items

-56,480.62

Acquisition costs 31.12.

1,876,648,906.13

1,794,954,229.12

Accumulated depreciation and impairment charges 1.1.

-1,312,459,545.48

-1,278,496,436.98

Accumulated depreciation of deductions and transfers

4,870,985.41

14,893,267.81

Depreciation and write-downs for the financial year

-52,757,940.62

-48,856,376.31

Accumulated depreciation and impairment on 31.12.

-1,360,346,500.69

-1,312,459,545.48

Book value 31.12.

516,302,405.44

482,494,683.64

10.

Investments

Shares in Group companies

Acquisitions costs 1.1.

529,953,996.10

534,406,191.31

Increases

256,678,317.17

Decreases

-4,452,195.21

Acquisitions costs 31.12.

786,632,313.27

529,953,996.10

Shares in participating companies

Acquisitions costs 1.1.

86,429,409.33

86,429,409.33

Acquisitions costs 31.12.

86,429,409.33

86,429,409.33

Other shares and holdings

Acquisitions costs 1.1.

253,698,707.84

344,817,070.84

Decreases

-34,620,000.00

-91,118,000.00

Transfers between items

-94,292.91

Impairments

-363.00

Acquisitions costs 31.12.

218,984,414.93

253,698,707.84

Total invesments and holdings

Acquisitions costs 1.1.

870,082,113.27

965,652,671.48

Increases

256,678,317.17

Decreases

-34,620,000.00

-95,570,195.21

Transfers between items

-94,292.91

Impairments

-363.00

Acquisitions costs 31.12.

1,092,046,137.53

870,082,113.27

Receivables from Group companies

Acquisitions costs 1.1.

288,654,833.04

290,412,859.87

Increases

1,758,026.47

522,658.70

Decreases

-161,946,546.42

-2,280,685.53

Acquisitions costs 31.12.

128,466,313.09

288,654,833.04

Other receivables

Acquisitions costs 31.12.

Receivables total

Acquisitions costs 1.1.

288,654,833.04

290,412,859.87

Increases

1,758,026.47

522,658.70

Decreases

-161,946,546.42

-2,280,685.53

Acquisitions costs 31.12.

128,466,313.09

288,654,833.04

Investments total

Acquisitions costs 1.1.

1,158,736,946.31

1,256,065,531.35

Increases

258,436,343.64

522,658.70

Decreases

-196,566,546.42

-97,850,880.74

Transfers between items

-94,292.91

Impairments

-363.00

Acquisitions costs 31.12.

1,220,512,450.62

1,158,736,946.31

158

The Board’s proposal to the Annual General Meeting for the distribution of funds

The distributable funds of the company are EUR 479,032,817.00 of which retained earnings constitute EUR 218,714,526.78 and profit for the period EUR 49,678,808.41. The Board of Directors proposes the following to the Annual General Meeting regarding the distribution of funds:

Dividend of EUR 0.07 per share be paid, or in total

24,853,237.50

To be left in the unrestricted shareholders' equity

454,179,579.50

Distributable funds of the company

479,032,817.00

The Board of Directors proposes that the dividend will be paid on 31 March, 2025.

No material changes have been taken place in respect of the company’s financial position after the balance sheet date. The liquidity of the company is good, and in the opinion of the Board of Directors, the proposed profit distribution would not compromise the liquidity of the company.

Confirmation of the Board of Directors and the CEO

We confirm that

the consolidated financial statements prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union and the financial statements of the parent company prepared in accordance with the laws and regulations governing the preparation of financial statements in Finland give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole;

the management report includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face and

that the sustainability report within management report is prepared in accordance with sustainability reporting standards referred to in Chapter 7 of the Accounting Act and with the Article 8 of Taxonomy Regulation.

Espoo 5 February 2025

Ilkka Hämälä Jussi Linnaranta Leena Craelius

Raija-Leena Hankonen-Nybom Erja Hyrsky Mari Kiviniemi

Jukka Moisio Mikko Mäkimattila Juha Vanhainen

Mika Joukio

CEO

166

Auditor’s Report | Metsä Board Annual review 2024

Responsibilities of the Board of Directors and the Managing Director for the Financial Statements

The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the EU, and of financial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of financial statements in Finland and comply with statutory requirements. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors and the Managing Director are responsible for assessing the parent company’s and the group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting. The financial statements are prepared using the going concern basis of accounting unless there is an intention to liquidate the parent company or the group or cease operations, or there is no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with good auditing practice will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the parent company’s or the group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the parent company’s or the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the parent company or the group to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events so that the financial statements give a true and fair view.

Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

169

Other Reporting Requirements

Information on our audit engagement

We were first appointed as auditors by the Annual General Meeting on 28 March 2012, and our appointment represents a total period of uninterrupted engagement of 13 years.

Other Information

The Board of Directors and the Managing Director are responsible for the other information. The other information comprises the report of the Board of Directors and the information included in the Annual Report but does not include the financial statements and our auditor’s report thereon. We have obtained the report of the Board of Directors prior to the date of this auditor’s report, and the Annual Report is expected to be made available to us after that date. Our opinion on the financial statements does not cover the other information.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to the report of the Board of Directors, our responsibility also includes considering whether the report of the Board of Directors has been prepared in compliance with the applicable provisions, excluding the sustainability report information on which there are provisions in Chapter 7 of the Accounting Act and in the sustainability reporting standards.

In our opinion, the information in the report of the Board of Directors is consistent with the information in the financial statements and the report of the Board of Directors has been prepared in compliance with the applicable provisions. Our opinion does not cover the sustainability report information on which there are provisions in Chapter 7 of the Accounting Act and in the sustainability reporting standards.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Other opinions

We support that the financial statements should be adopted. The proposal by the Board of Directors regarding the treatment of distributable funds is in compliance with the Limited Liability Companies Act. We support that the Board of Directors of the parent company and the Managing Director should be discharged from liability for the financial period audited by us.

Helsinki, February 6, 2025

KPMG Oy Ab

Kirsi Jantunen

Authorized Public Accountant, KHT

170

Auditor’s Report | Metsä Board Annual review 2024

Assurance Report on the Sustainability Statement

To the Annual General Meeting of Metsä Board Oyj

We have performed a limited assurance engagement on the group sustainability statement of Metsä Board Oyj (business identity code 0635366-7) that is referred to in Chapter 7 of the Accounting Act and that is included in the report of the Board of Directors for the financial year 1.1.–31.12.2024.

Opinion

Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that the group sustainability statement does not comply, in all material respects, with

1) the requirements laid down in Chapter 7 of the Accounting Act and the sustainability reporting standards (ESRS);

2) the requirements laid down in Article 8 of the Regulation (EU) 2020/852 of the European Parliament and of the Council on the establishment of a framework to facilitate sustainable investment, and amending Regula- tion (EU) 2019/2088 (EU Taxonomy).

Point 1 above also contains the process in which Metsä Board Oyj has iden- tified the information for reporting in accordance with the sustainability reporting standards (double materiality assessment) and the tagging of information as referred to in Chapter 7, Section 22 of the Accounting Act.

Our opinion does not cover the tagging of the group sustainability statement with digital XBRL sustainability tags in accordance with Chapter 7, Section 22, Subsection 1(2), of the Accounting Act, because sustainability reporting companies have not had the possibility to comply with that provision in the absence of the ESEF regulation or other European Union legislation.

Basis for Opinion

We performed the assurance of the group sustainability statement as a limited assurance engagement in compliance with good assurance practice in Finland and with the International Standard on Assurance Engagements (ISAE) 3000 (Revised) Assurance Engagements Other than Audits or Reviews of Historical Financial Information.

Our responsibilities under this standard are further described in the Responsibilities of the Authorized Sustainability Auditor section of our report.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Matter

We draw attention to the fact that the group sustainability statement of Metsä Board Oyj that is referred to in Chapter 7 of the Accounting Act has been prepared and assurance has been provided for it for the first time for the financial year 1.1.–31.12.2024. Our opinion does not cover the com- parative information that has been presented in the group sustainability statement. Our opinion is not modified in respect of this matter.

Authorized group sustainability auditor’s Independence and Quality Management

We are independent of the parent company and of the group companies in accordance with the ethical requirements that are applicable in Finland and are relevant to our engagement, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

The authorized group sustainability auditor applies International Standard on Quality Management ISQM 1, which requires the authorized sustainability audit firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director of Metsä Board Oyj are responsible for:

the group sustainability statement and for its preparation and presenta- tion in accordance with the provisions of Chapter 7 of the Accounting Act, including the process that has been defined in the sustainability reporting standards and in which the information for reporting in accordance with the sustainability reporting standards has been identified as well as the tagging of information as referred to in Chapter 7, Section 22 of the Accounting Act and

the compliance of the group sustainability statement with the requirements laid down in Article 8 of the Regulation (EU) 2020/852 of the European Parliament and of the Council on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088;

such internal control as the Board of Directors and the Managing Director determine is necessary to enable the preparation of a group sustainability statement that is free from material misstatement, whether due to fraud or error.

171

1

2

3

4

5

6

7

8

9

10

11

12

100

80

60

40

20

0

20

21

22

23

24

20

21

22

23

24

Shares and shareholders | Metsä Board Annual review 2024

Shares and shareholders

Shares and shareholders

Metsä Board’s shares

Metsä Board’s shares are listed on the Nasdaq Helsinki. The share capital of the company on 31 December 2024 was EUR 557,881,540.40. Metsä Board has two series of shares. At the end of 2024, there were 32,802,175 A shares and 322,710,571 B shares. Each series A share entitles its holder to twenty (20) votes at a Gen- eral Meeting of Shareholders, and each series B share entitles the holder to one (1) vote. Metsä Board’s A shares can be converted to B shares if a shareholder or a representative of the nominee registered shares makes a written request for a conversion to the company. In 2024, there were no share conversions.

Dividend policy

In 2024, Metsä Board renewed its’ dividend policy. Metsä Board’s target is to distribute a dividend of at least half of the result for the finan- cial period over time, taking into account the company’s future investment and development needs. The Board of Directors proposes that a dividend of EUR 0.07 per share be paid for the 2024 financial period. The dividend payment, in total EUR 25 million, corresponds to 98% of the result for the 2024 financial period.

Board of Directors’ authority to issue shares

The Annual General Meeting resolved to authorise the Board of Directors to decide on the issuance of shares, the transfer of treasury shares and the issuance of special rights referred to in Chapter 10, Section 1 of the Finnish Companies Act. The authorisation applies to Series B shares. By virtue of the authorisation the Board of Directors may issue new shares or transfer treasury shares up to a maximum of 35,000,000 shares, including shares that may be issued by virtue of special rights referred to in Chapter 10, Section 1 of the Finnish Companies Act. The number of shares corresponds to approximately 10% of all shares in the company. The authorisation is effective until 30 June 2025. The authorisation was fully unused on 31 December 2024.

Impact of change in control

Some of Metsä Board’s shareholder agreements concerning resource and associated companies

include provisions under which Metsä Board must offer its shares in an associated company for sale to the other shareholders in the case of a change of control of Metsä Board. Of these agreements, pursuant to the shareholders agreement of Metsä Fibre Oy, Metsä Fibre’s shareholders should offer their shares for sale to the other shareholders in the case of a change of control. A decrease in the voting rights of Metsäliitto Cooperative in Metsä Board to below 50% would not, however, obligate Metsä Board to offer its shares in Metsä Fibre Oy for sale.

Basic information on Metsä Board’s shares

Metsä Board’s A share

Metsä Board’s B share

Listing

Nasdaq Helsinki

Nasdaq Helsinki

Date of listing

2 January 1987

2 January 1987

Market cap segment

Large Cap

Large Cap

Ticker symbol

METSA

METSB

ISIN code

FI0009000640

FI0009000665

Reuters code

METSA.HE

METSB.HE

Bloomberg code

METSA FH

METSB FH

Number of shares 31 Dec 2024

32,802,175

322,710,571

Trading on the Nasdaq Helsinki in 2024 (2023)

Metsä Board’s A share

Metsä Board’s B share

Closing price on 31 December, EUR

5.60 (7.80)

4.24 (7.19)

Lowest price, EUR

5.40 (7.48)

3.97 (66.2)

Highest price, EUR

9.62 (13.05)

8.11 (8.96)

Average daily trading volume, no. of shares

2,013 (2,132)

379,162 (466,223)

Total trading volume, no. of shares

505,146 (535,219)

95,169,558 (117,021,973)

Market capitalisation, EUR million

184 (333)

1,369 (2,828)

Share price development 2024

EUR Million shares

Metsä Board A

Metsä Board B

Trading volume

Source: Euroland https://www.metsagroup.com/metsaboard/investors/share-tools/share-monitor/

13.0

11.0

9.0

7.0

5.0

3.0

5.0

4.0

3.0

2.0

1.0

0.0

DIVIDEND

EUR %

DIVIDEND /

net result

%

0.70

0.60

0.50

0.40

0.30

0.20

0.10

0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0

Dividend/share, EUR

Dividend yield, %

173

Shares and shareholders | Metsä Board Annual review 2024

Shareholdings of the members of the Board of Directors and CEO on 31 December 2024

Holding

Ilkka Hämälä

Chair of the Board of Directors

301,849

Jussi Linnaranta

Vice Chair of the Board of Directors

42,251

Hannu Anttila

Member of the Board of Directors

4,761

Raija-Leena Hankonen-Nybom

Member of the Board of Directors

22,653

Erja Hyrsky

Member of the Board of Directors

19,269

Mari Kiviniemi

Member of the Board of Directors

13,446

Jukka Moisio

Member of the Board of Directors

22,044

Mikko Mäkimattila

Member of the Board of Directors

9,813

Juha Vanhainen

Member of the Board of Directors

14,221

Mika Joukio

CEO

377,846

Share holdings of the Corporate Management Team members are presented on pages 194–195.

175

Price development and number of shares

2024

2023

2022

2021

2020

Adjusted share prices, EUR

A share

high

9.62

13.05

10.50

11.00

8.80

low

5.40

7.48

7.66

8.50

4.80

closing

5.60

7.80

10.15

9.38

8.64

average

7.80

10.06

9.48

9.48

6.88

B share

high

8.11

13.05

10.49

11.01

8.79

low

3.97

7.48

7.09

7.50

4.47

closing

4.24

7.80

8.77

8.61

8.62

average

7.19

10.06

8.73

9.14

6.12

Trading volume at Nasdaq Helsinki, number of shares

A share

505,146

535,219

849,346

1,802,589

1,758,683

% of total number of shares

1.5

1.6

2.6

5.5

5.3

B share

95,169,558

117,021,973

87,832,699

98,057,575

155,232,570

% of average number of shares

29.5

36.3

27.2

30.4

48.1

Number of shares at year end

A share

32,802,175

32,802,175

32,802,175

32,802,175

32,887,151

B share

322,710,571

322,710,571

322,710,571

322,710,571

322,625,595

Total

355,512,746

355,512,746

355,512,746

355,512,746

355,512,746

Number of shares at year end

354,991,386

354,750,822

355,359,331

355,512,746

355,512,746

Market capitalisation at year end, EUR million

1,552.6

2,576.1

3,161.5

3,086.2

3,065.2

Number of shareholders, B shares

63,714

62,501

56,887

54,904

48,165

Key figures

EUR million

2024

2023

2022

2021

2020

Earnings per share

Result before tax

51.4

120.9

524.9

365.8

212.3

– Income taxes

-12.0

-19.3

-63.5

-51.8

-42.2

= Result for the period

39.4

101.6

461.4

314.0

170.1

– Average number of shares

354,991,386

354,750,822

355,359,331

355,512,746

355,512,746

Earnings per share, basic and diluted, EUR

0.07

0.27

1.15

0.82

0.48

Shareholders’ equity per share, EUR

4.91

5.35

5.86

4.78

3.89

Dividend per share, EUR

0.07  1)

0.25

0.58

0.41

0.26

Payout ratio, %

98.1

93.5

50.4

49.9

54.3

Metsä Board shares have no nominal value.

Dividend yield, % of closing price

A share

1.3  1)

3.2

5.7

4.4

3.0

B share

1.7  1)

3.5

6.6

4.8

3.0

Price/earning ratio (P/E ratio)

A share

78.4

29.2

8.8

11.4

18.1

B share

59.4

26.9

7.6

10.5

18.0

Price to book value (P/BV), %

A share

114.1

145.9

173.2

196.2

222.0

B share

86.4

134.5

149.6

180.1

221.5

1) The Board of Directors has proposed that a dividend of EUR 0.07 per share be distributed for the 2024 financial year.

176

Key figures | Metsä Board Annual review 2024

Calculation of key ratios

Key figures

Alternative performance measures

Key figure

Definition

Justification for the use of the key figure

Profitability

Operating result

=

Result before income tax, financial income and expenses, exchange gains and losses and share of results from associated companies and joint ventures

The key figure describes the Group’s ability to produce a profit from its busi- ness, and it is independent of the company’s capital structure

EBITDA

=

Operating result before depreciation, amortisation and impairment losses

The key figure shows how much margin is left over from the Group’s sales after deducting the variable and fixed costs of business before depreciation, amortisation and impairment

Return on equity (%)

=

Result before income tax - income taxes

The key figure describes the Group’s ability to produce a profit with the assets invested in the Group by shareholders

Shareholder’s equity (average)

Return on capital employed (%)

=

Result before income taxes + net exchange differences and other financial expenses

The key figure describes the Group’s ability to produce a profit on the capital invested, from the point of the party investing the capital

Balance total – non-interest bearing liabilities (average)

Financial position

Equity ratio (%)

=

Shareholder’s equity

The key figure describes the Group’s capital structure, solvency and ability to take care of its commitments in the long run

Balance total - advance payments received

Net gearing ratio (%)

=

Interest-bearing net liabilities

The key figure describes the Group’s capital structure and financial position

Shareholder’s equity

Interest-bearing net liabilities

=

Interest-bearing liabilities – cash and cash equivalents and interest-bearing receivables

The key figure describes the Group’s indebtedness

Other

Total investments

=

Investments in owned and leased fixed assets and investments in business combinations

The key figure describes the Group’s application of funds for maintaining and renewing its production machinery and plants and for expanding its business with corporate acquisitions

Interest cover

=

Net cash flow arising from operating activities + net interest expenses

The key figure describes the Group’s ability to meet its debt obligations

Net interest expenses

Share performace indicators

Key figure

Definition

Earnings per share

=

Profit attributable to shareholders of parent company

Adjusted number of shares (average

Shareholders’ equity per share

=

Equity attributable to shareholders of parent company

Adjusted number of shares at the end of the period

Dividend per share

=

Dividends

Adjusted number of shares at 31 December

Payout ratio (%)

=

Dividend per share

Earnings per share

Dividend yield (%)

=

Dividend per share

Share price at 31 December

Price/earnings ratio (P/E ratio) (%)

=

Share price at 31 December

Earnings per share

P/BV (%)

=

Share price at 31 December

Shareholders' equity per share

Adjusted average share price

=

Total traded volume per share (EUR)

Average adjusted number of shares traded during the financial year

Market capitalisation

=

Number of shares x market price at the end of period

The presentation of earnings per share is regulated by the Decree of the Ministry of Finance on the Regular Duty of Disclosure of an Issuer of a Security. In addition, the earnings per share ratio is regulated by the IAS 33 standard.

181

Corporate governance statement | Metsä Board Annual review 2024

Of the nine (9) members of the Board of Directors, 89% (8) were independent of the Company, and 67% (6) were independent of a major shareholder of the Company.

Gender distribution

%

Men 56

Women 44

Age distribution

%

40–50 11

51–60 44

61–65 44

>65 0

No members of the Board of Directors are executive officers of the Company.

The Board as a whole has extensive experience of good corporate governance, international business and management, either in operational or fiduciary positions in various industries, including the forest industry, forestry, engineering, the food industry and auditing. The Board also has many years of experience of managing sustainability issues and assessing the risks and opportunities involved. The Board of Directors’ composition and a summary of the Board members’ work history and positions of trust can be found below in the Board members’ introduction and on the Company’s website, https://www.metsagroup.com/ metsaboard/investors/corporate-governance/ board-of-directors/ .

In the 2024 financial year, the Board held a total of 15 meetings. Board members attended 97% of the meetings (97% attendance in 2023 and 97% in 2022).

Attendance at Board and committee meetings by member

Member of the Board of Directors

Number of Board meetings

Attendance rate (%)

Independence from the Company

Independence from the major shareholder

Ilkka Hämälä (Chair of the Board)

14/15

93

No

No

Jussi Linnaranta

15/15

100

Yes

No

Hannu Anttila (until 26 March 2024)

5/5

100

Yes

Yes

Leena Craelius (as of 26 March 2024)

8/10

80

Yes

Yes

Raija-Leena Hankonen-Nybom

14/15

93

Yes

Yes

Erja Hyrsky

14/15

93

Yes

Yes

Mari Kiviniemi

15/15

100

Yes

Yes

Mikko Mäkimattila

15/15

100

Yes

No

Jukka Moisio

14/15

93

Yes

Yes

Juha Vanhainen

15/15

100

Yes

Yes

Board of Directors’ Committees

If necessary, the Board of Directors may decide to establish committees to prepare and discuss matters falling within its competence, with the assistance of the Board of Directors. The Board has appointed an Audit Committee and a Nomination and HR Committee from among its members. The Board of Directors appoints the chair and members of each committee annually after the Annual General Meeting. The Board and its committees may also be assisted by external advisors.

Based on committees’ the proposals, the final decisions on matters within the scope of the committees’ duties are taken by the Board of Directors, with the exception of proposals on the composition and remuneration of the Board of Directors made directly to the General Meeting by the Nomination and HR Committee.

Audit Committee

The Audit Committee’s role is to assist the Board in ensuring the accuracy, balance, transparency and clarity of the Company’s financial reporting, accounting methods, financial statements, and other financial information and sustainability reporting the Company discloses. The Audit Committee assesses the effectiveness and scope of internal audits, the Company’s risk management, key risk areas, and compliance with laws and regulations. It assesses the independence of the auditor and audit firm and makes a recommendation to the Board on the selection of the Company’s auditor. The Audit Committee also reviews the internal audit’s

half-yearly action plans and reports on signifi- cant audits.

The committee’s members must have sufficient expertise in accounting and financial reporting. The Audit Committee meets regularly, at least four times a year. In connection with its meetings, the committee shall consult the Company’s auditor. The Chair of the committee shall report on each meeting of the Audit Committee to the Board of Directors. The Audit Committee’s duties and responsibilities are set out in its charter, which the Board of Directors has approved ( https://www.metsagroup. com/globalassets/metsa-board/documents/ investors/corporate-governance/en/general/ metsa-board-rules-of-procedure-for-audit-com- mittee.pdf ).

The Company’s auditor, the CEO and CFO, as well as other management representatives and external advisors as required, are also represented at the Audit Committee meetings when invited by the committee.

The board members listed in the table below have acted as members of the Audit Committee since the 2024 Annual General Meeting. The members of the Audit Committee are indepen- dent of the Company and its major shareholder.

The Audit Committee met five times during 2024. Committee members’ attendance rate was 96% (92% in 2023 and 100% in 2022).

185

Audit Committee member

Number of meetings

Attendance rate (%)

Raija-Leena Hankonen-Nybom (Chair)

5/5

100

Hannu Anttila (until 26 March 2024)

1/1

100

Leena Craelius (as of 26 March 2024)

4/4

100

Mari Kiviniemi

5/5

100

Jukka Moisio

4/5

80

Juha Vanhainen

5/5

100

Nomination and HR Committee

The task of the Nomination and HR Committee is to assist the Board of Directors in matters related to the appointment and remuneration of the Company’s CEO, any Deputy CEO and senior management, and prepare matters related to the incentive schemes for management and employees. The committee also prepares a proposal for the Annual General Meeting on the number of Board members, Board composition and Board members’ remuneration. The com- mittee also recommends, prepares and presents the appointment of the CEO (and any Deputy CEO) for the Board’s approval, as well as their salary and compensation. The committee also prepares and provides recommendations to the Board and the CEO concerning matters related to the remuneration and incentive schemes of management and employees.

The committee consists of five Board members. It convenes regularly, at least four times a year. The Chair of the committee presents the committee’s proposals to the Board. The tasks and responsibilities of the Nomination and HR Committee are specified in the committee’s rules of procedure, which by the Board of Directors has approved ( https://www. metsagroup.com/globalassets/metsa-board/ documents/investors/corporate-governance/en/ general/metsa-board-nomination-and-hr-com- mittee-charter.pdf ).

The board members listed in the table below have acted as members of the Nomination and HR Committee since the 2024 Annual General Meeting.

The Nomination and HR Committee met four times during 2024. All members attended all meetings (100% attendance in 2023 and 2022 as well).

Members of the Nomination and HR Committee

Number of meetings

Attendance rate (%)

Ilkka Hämälä (Chair)

4/4

100

Erja Hyrsky

4/4

100

Jussi Linnaranta

4/4

100

Mikko Mäkimattila

4/4

100

Chief Executive Officer

Chief Executive Officer Mika Joukio (born in 1964), M.Sc. (Eng.), MBA, is responsible for the daily management of the Company’s administration in accordance with the guidelines and instructions provided by the Board. The CEO manages the Company’s daily business and is responsible for controlling and steering the businesses.

The CEO has a written CEO contract approved by the Board of Directors. The Board of Directors supervises the CEO’s performance and provides a performance evaluation once a year. The CEO is covered by the Employees Pensions Act, which provides for a pension compensation based on service years and earnings. In the Finnish earnings-related pension system, basic

salary, remuneration and taxable fringe benefits are included in earned income, whereas income from options and share-based incentive sche- mes for management are not. The Company has commissioned an extra pension insurance policy for the CEO, entitling the CEO to retire at the age of 62.

The Board of Directors appoints and dismisses the CEO. The Board of Directors may discharge the CEO without a specific reason. The CEO can also resign from their position. The mutual period of notice is six months. However, the Board may decide to discharge the CEO wit- hout a notice period. If the Board terminates the CEO’s contract, the CEO is entitled to discharge compensation equal to their 12-month salary.

Deputy to the CEO

The Board of Directors may appoint a deputy to the CEO. The Deputy CEO shall be responsible for the CEO’s duties in the event of the CEO’s absence. There is currently no deputy to the CEO.

Corporate Management Team

In Metsä Board’s operational management, the CEO is assisted by the Corporate Management Team, which consists of Mika Joukio, CEO, Markku Leskelä (Development), Jussi Noponen (Sales and Supply Chain), Harri Pihlajaniemi (Production and Technology), Henri Sederholm (Finance) and Camilla Wikström (Human Resources), who all report to the CEO. Laura Remes was appointed as the Company’s Busi- ness Development Director and a member of the Corporate Management Team on 4 October 2024. She will start in her position later in 2025. In the future, the area of responsibility of Markku Leskelä, who is responsible for Metsä Board’s development, will include product development and responsibility when Remes takes up her new position.

The tasks and responsibilities of the Corpo- rate Management Team include investment planning, the development and preparation of the Company’s strategic guidelines, the allocation of resources, the supervision of day-to-day operations, and the preparation of several matters for the Board of Directors. As a rule, the Corporate Management Team meets at least once a month at the invitation of the CEO, and whenever necessary.

The members of the Corporate Management Team are responsible for the operation of their own area of responsibility. The functions are supported by centralised support functions, most of which are shared with Metsä Group’s other companies. Support functions are based on separate market-based service agreements.

The members of the Corporate Management Team have written employment or service contracts. With the exception of the Managing Director, they have no pension arrangements other than the statutory pension scheme. The period of notice for members of the Corporate Management Team is six months on either side.

186

Corporate governance statement | Metsä Board Annual review 2024

Internal control, internal audit and risk management

Effective business requires operations to be monitored continuously and effectively. Metsä Board’s internal management and control procedure is based on the Companies Act, other laws and regulations applicable to listed companies, the Articles of Association, the rules and recommendations of the Helsinki Stock Exchange, the recommendations of the Good Corporate Governance Code, and the Compa- ny’s own approved policies and principles. The effectiveness of internal control is assessed by the Company’s Internal Audit function. Internal control is implemented throughout the organi- sation. Internal control methods include internal guidelines and reporting systems that support controls. External control is the responsibility of Metsä Board’s auditor and the competent authorities. Metsä Board’s internal control, risk management and internal audit principles, operational objectives, and responsibilities are described below. Internal control and risk mana- gement for sustainability reporting is described in the Sustainability Report included in the Com- pany’s Annual Review in the Risk management and internal control for sustainability reporting section.

Internal control

At Metsä Board, internal control includes finan- cial reporting, sustainability reporting and other operational controls. Internal control is carried out by the Board of Directors and the acting management, as well as the entire staff. Internal control aims to ensure the achievement of the Company’s goals and objectives, the economi- cal, appropriate and efficient use of resources, the reliability and accuracy of financial and other management information and sustainability data, compliance with external regulations and internal procedures, adequate safeguarding of operations, data and assets, and adequate and properly organised manual and IT systems to support operations.

Internal control is divided into (i) preventive control such as establishing the Company’s values, general operating and business prin- ciples, (ii) day-to-day control such as directing and monitoring activities, including operating systems and work instructions, and (iii) ex-post control such as management assessments and reviews, and comparisons and verifications to

ensure the achievement of objectives and to monitor compliance with agreed operating and control principles. The Company’s corporate culture, management style and approach to control together form the basis of the overall internal control framework.

Monitoring of the financial reporting process, credit control and authorisation rights

Metsä Board’s financial organisations of the different functions and central administration are responsible for financial reporting. The units report their financial figures each month. The units’ controller functions check their units’ monthly performance and submit a perfor- mance report to central administration. The fun- ctions’ profitability development and business risks and opportunities are discussed at monthly meetings attended by the Company’s and each function’s management. The result is reported to the Board and Corporate Management Team monthly.

Credit control in Metsä Board has been centralised to the Company’s Credit Committee, which convenes at least quarterly. Credit cont- rollers monitor the trend in trade receivables in each sales company under the supervision of the Metsä Group’s Director, Credit Management. Counterparty-specific credit limits are set within the boundaries of the credit policy confirmed by the Board in cooperation with centralised credit control, sales and financial management. The development of credit risks is regularly reported to the Board of Directors.

Authorisation rights concerning expenses, significant contracts and investments have been specified progressively for different organisation levels according to the decision-making authority policy confirmed by the Board and the authority separately granted by the CEO and other management personnel. Investment follow-up is carried out by the Company Group’s financial administration in accordance with the investment policy confirmed by the Board. After pre-approval, investments are handled by the functions’ Management Teams and the Corporate Management Team within the framework of the annual investment plan. The most significant investments are separately submitted to the Board for approval. Investment follow-up reports are compiled quarterly.

Internal auditing

Internal auditing is an independent and objective assessment, assurance and consulting activity.

Internal auditing assists the Board of Directors in its supervisory role and supports Metsä Board and its management in achieving the Company’s objectives by providing a systematic approach to assessing and improving the effectiveness of risk management, control, governance and management processes.

Metsä Board’s internal auditing is carried out by Metsä Group’s internal audit unit. Audit work is carried out in compliance with the internal audit guidelines approved by the Audit Commit- tee. The internal audit function reports to the Audit Committee on operations and to Metsä Group’s President and CEO on administration.

Internal auditing draws up a six-monthly action plan which is approved by the Audit Committee. Auditing is risk-based and focuses on the Company’s activities and units that are considered to be key to achieving the objectives set for operations. In cooperation with the audit function, internal auditing sees to the coordi- nation of plans to ensure adequate coverage of auditing and avoid overlapping work. Similarly, cooperation is carried out with Metsä Group’s other assurance functions such as internal controls, risk management and compliance.

The audit’s results are compiled in an audit report, which is shared with Metsä Board’s CEO and CFO, the management of the audited entity, General Counsel and the persons in charge. The audit reports are submitted to Metsä Group’s President and CEO, CFO, General Counsel, audi- tor and to other Group management if required for information purposes.

Internal auditing provides the Audit Committee with a six-monthly summary report on the audits carried out, the main findings and recommendations, and the management action plans and their implementation. The Chair of the Audit Committee and the Audit Director also meet regularly without the presence of management.

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Risk management

Risk management is an essential part of Metsä Board’s standard business planning and leadership. Risk management is part of daily decision making, operations follow-up and internal control, helping promote and ensure the achievement of the Company’s objectives.

The effective coordination of business mana- gement and risk management is based on the operating principles approved by the Board of Directors, which are designed to keep the overall risk management system clear, understandable and sufficiently practical. Risks and their evolution are regularly reported to the Board of Directors’ Audit Committee.

Risk management responsibilities are divided between different institutions. The Board of Directors is responsible for the Company’s risk management and approves the risk management policy, while the Audit Committee evaluates the Company’s risk management levels and practices, as well as key risk areas, and makes proposals to the Board of Directors in this regard. The CEO and the Corporate Mana- gement Team are responsible for defining and implementing risk management principles and are also responsible for ensuring that risks are taken into account in the Company’s planning processes, and that they are adequately and appropriately reported. The owner of Metsä Group’s risk management process is responsible for maintaining and developing the risk mana- gement process and capabilities in cooperation with the business units. Metsä Board’s Risk Committee coordinates risk assessments and compiles a summary of the key risks twice a year, which the CEO presents to the Board after the Management Team review.

Risk management’s key objective is to identify and evaluate the risks, threats and opportunities that may have an impact on the implementation of the strategy and the achievement of short- and long-term objectives. The businesses regularly evaluate and monitor the risk environment and related changes as part of their normal operational planning. The risks identified and their management are reported to the Audit Committee and the Board at least twice a year. Business risks also involve opportunities, and they can be capitalised on within the boundaries of the agreed risk limits. Conscious risk-taking decisions must always be based on an adequate evaluation of the risk-bearing capacity and the

profit/loss potential, among other matters. Such an evaluation must be conducted before any pre-engineering and execution phases of projects and investments.

Responsibilities for risk management are sha- red between the various governing bodies. The Board of Directors is responsible for risk mana- gement and approves the risk management policy, while the Audit Committee assesses the Company’s risk management levels and practices and key risk areas, making proposals to the Board of Directors in this regard.

The key elements of Metsä Board’s risk management include implementing a comprehensive risk management process that supports the entire business, protecting assets and ensuring business continuity, corporate security and its continuous improvement, and crisis management and continuity and recovery plans. In line with the Risk Management Policy and Principles, adequate risk assessment is part of the pre-appraisal and implementation phases of projects that are financially or otherwise significant.

Metsä Board’s risk management function is to:

ensure that all identified risks affecting personnel, customers, products, property, information assets, corporate image, corpo- rate responsibility or operational capacity are managed in accordance with the law and based on the best available information;

ensure the achievement of the objectives set for the Company;

meet the expectations of stakeholders;

protect assets and ensure business continuity;

optimise the profit/loss potential ratio; and

ensure the management of the Company’s overall risk exposure and the minimisation of overall risks.

The most significant risks and uncertainties known to the Company are described in the Report of the Board of Directors.

Auditing

According to Metsä Board’s Articles of Asso- ciation, the Company has one auditor, which must be an auditing firm approved by the Finnish Patent and Registration Office, with the principal auditor being a Chartered Accountant. The General Meeting of Shareholders elects the auditor annually at the Annual General Meeting. The audit was last put out to tender in 2021, and in accordance with the decision of the Annual General Meeting in the spring of 2024, the Company’s auditor will be KPMG Oy Ab, which appointed Kirsi Jantunen, KHT, as its principal auditor. The Audit Committee oversees the auditor selection procedure and makes recommendations to the Board of Directors on the proposal to the Annual General Meeting regarding the selection of the auditor and the auditor’s remuneration.

In 2024, audit fees were paid as follows:

Financial audit fees of the auditor of the Group, KPMG, EUR million

2024

2023

Audit

0.5

0.5

Auditor’s statements*

0.1

0.0

Tax services

Other services

0.0

0.0

Total

0.7

0.6

* including fees for assurance of the sustainability statement

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Corporate governance statement | Metsä Board Annual review 2024

Insider administration

For insider matters, Metsä Board and its group companies comply with Finnish laws, especially the Securities Markets Act, Regulation No 596/2014 of the European Parliament and of the Council on market abuse (MAR) and sup- porting orders and regulations, and the insider guidelines of NASDAQ Helsinki Ltd (Helsinki Stock Exchange) ( www.nasdaq.com/solutions/ rules-regulations-helsinki ). Based on the above provisions, the Company has approved its own insider guidelines.

The goal of insider administration is to enable people considered the Company’s insiders to openly hold shares in the Company while maintaining public trust in the trading and price formation involving the Company’s securities. Insiders and those involved in the preparation of financial reporting are regularly provided with instructions and training.

The Company does not maintain a permanent company-specific insider register. If necessary, the Company will, by decision of the Chair of the Board of Directors, establish an insider project, which will include all persons involved in the preparation of a specific project containing insider information.

In 2024, the Company’s directors subject to the disclosure requirement include the members of the Board of Directors and the CEO. The ownership of these persons and of their related natural and legal persons is public, as each has an independent duty of disclosure to the Com- pany and the Supervisory Authority in respect of their transactions in Metsä Board shares and other financial instruments. Metsä Board publis- hes the notifications of transactions it receives in the form of stock exchange releases.

Directors who are required to report are prohibited from trading in the Company’s shares and other financial instruments between the end of the reporting period and the end of the interim report’s publication date (but always for at least 30 calendar days – the “closed window”).

Additionally, Metsä Board maintains a list of persons who, in the course of their duties, are involved in the preparation and communication of interim reports, the financial statements release, and the annual financial statements and may thus receive inside information. These persons are covered by the Company’s closed window and are therefore subject to the trading restriction mentioned above.

Related party transactions

The Board of Directors has defined the prin- ciples for monitoring and evaluating related party transactions. The Company has cont- ractual relationships with the parent company Metsäliitto Cooperative and its sister companies Metsä Fibre Oy and Metsä Tissue Oyj in the normal course of business. The most significant are related to the procurement of raw materials such as wood and pulp, and the operation of joint integrated mill sites.

The Board of Directors decides on contractual relations with related parties unless the matter is related to the Company’s normal business and is of minor importance. In situations in which the Board of Directors deals with a business or another contractual relationship, or a relation- ship with Metsäliitto Cooperative or a related company, the Board of Directors acts in principle without its members who are dependent on Metsäliitto Cooperative or the related company in question. The Board of Directors’ Audit Committee regularly monitors and evaluates the transactions and contractual relationships of the Company and its related parties.

To assess directors’ independence and inte- grity, directors must disclose any matters that may affect their ability to act free of conflicts of interest to the Company. As of 31 December 2024, the members of the Board of Directors, the CEO and the other members of the Corpo- rate Management Team had no financial loans from the Company or its subsidiaries, and no collateral arrangements existed between them. There were no significant business relationships between these persons or their related parties (as defined in IAS 24) and the Company during 2024.

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Board of Directors of Metsä Board The Annual General Meeting 2024 elected the following persons as members of the Board of Directors:

Raija-Leena Hankonen-Nybom

b. 1960 Female

M.Sc. (Econ.), Authorised Public Accountant degree

Member of the Board since 2021

Independent of the company and its significant shareholder

Primary working experience:

KPMG Oy Ab :

Chair of the Board (2016–2018)

CEO (2010–2016)

Lead Audit Partner of Large Corporates in Financial Services, Manufactur- ing and Retail Industry (2006–2019)

Head of Audit (2006–2010)

Various audit and IFRS client engagements in Finland and abroad (1987–2005)

Other positions of trust:

Cargotec Corporation , Member of the Board and Chair of the Audit and Risk Management Committee (2023–)

Danske Bank A/S , Member of the Board, Chair of the Audit Committee (2020–)

Posti Group Oyj , Member of the Board and Chair of the Audit, Risk and Sustainability Committee (2020–)

Helsinki Deaconess Institute Foundation sr , Member of the Board (2020–) and Chair of the Audit Committee (2022–)

Directors’ Institute Finland ry , Member of the Board (2021–2024)

Savonlinna Opera Festival Support Association ry , Member of the Board (2018–)

Jalmari and Rauha Ahokas Medical Foundation sr , Chair of the Supervisory Board (2018–2022), Member of the Supervisory Board (2013–2017), Chair of the Board (2008–2012), Member of the Board (2005–2007), Member of the Delegation (1999–2004)

Shares owned: 22,653 B shares

Leena Craelius

b. 1971 Female

MBA, Finance

Member of the Board since 2024

Independent of the company and its significant shareholder

Primary working experience:

SSAB AB (publ), Executive Vice President and Chief Financial Officer, (2021– )

SSAB Europe Oy , Vice President of Finance and Controlling, SSAB Europe division (2016–2021)

Paroc Oy , Technical Insulation business, Business Controller (2015–2016)

SSAB Europe Oy , (former Ruukki Metals Oyj), various tasks of the manager of the financial sector (2009–2015)

Rautaruukki Oyj , various tasks in the financial sector (2005–2009)

Outokumpu Oyj , various tasks in the financial sector (2002–2005)

Shares owned: 4,761 B shares

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Mari Kiviniemi

b. 1968 Female

M.Soc.Sc. (Econ.)

Member of the Board since 2022

Independent of the company and its significant shareholder

Primary working experience:

Finnish Commerce Federation , Managing Director (2019–2024)

OECD , Deputy Secretary General (2014–2018)

Finnish Prime Minister (2010–2011)

Minister of Public Administration and Local Government (2007–2010)

Minister for Foreign Trade and Development and Minister for European Affairs (2005–2006)

Member of Parliament , Finland, (1995–2014)

Other positions of trust:

German-Finnish Chamber of Commerce , Member of the Delegation (2024–)

Club de Madrid , Member (2024–) The Finnish Fare Foundation , Member of the Board (2024–)

Vaasa University , Chair of the Board (2022–)

Asian Infrastructure Investment Bank , International Advisory Panel (2021–)

Savonlinna Opera Festival’s Board of Trustees , member (2020–)

Blic Public Affairs , Member of the Board (2019–2022)

Messukeskus Helsinki , Member of Supervisory Board (2019–2021)

Suomi Mutual , Member of the Board (2013–2014)

The Finnish Centre Party , Leader (2010–2012)

Helsinki City Council , Member (2005–2012)

Ilkka-Yhtymä Group , Member of Supervisory Board (2006–2007)

Finnish National Opera Foundation , Member of the Board (2004–2007 and 2013–2014) Uusimaa Regional Counci l, Member (2004–2008)

Alko Inc. , Member of Supervisory Board (2002–2003)

Lännen Tehtaat Oyj , Member of Supervisory Board (1996–2005) Leonia Bank , Member of Supervisory Board (1997–2000)

VR Group Ltd , Member of Supervisory Board (1995–1997)

Shares owned: 13,446 B shares

Jussi Linnaranta

b. 1972 Male M.Sc. (Agriculture and Forestry), Agronomist

Member of the Board since 2017, Vice Chair of the Board since 2020

Independent of the company. Not independent of the company’s signifi- cant shareholder

Primary working experience:

Forest and Agricultural entrepreneur (2001–)

Thermal entrepreneur (2003–2023) Ministry of Agriculture and Forestr y, Information and Research Centre , various positions (1997–2007)

Other positions of trust:

Metsäliitto Cooperative , Member of the Supervisory Board (2004–2016), Member of the Board (2017–), Vice Chair of the Board (2019), Chair of the Board (2020–)

Pellervo Coop Center , Member of the Board (2020–)

Pohjois-Savo Cooperative Bank , Member of the Representative Council (2014–2017)

The Central Union of Agricultural Producers and Forest Owners (MTK) , Member of the Energy Committee (2007–2008, 2014–2016)

Shares owned: 42,251 B shares

Jukka Moisio

b. 1961 Male

M.Sc. (Econ), MBA

Member of the Board since 2020

Independent of the company and its significant shareholder

Primary working experience:

Nokian Tyres plc , President and CEO (2020–2024)

Huhtamäki Oyj , President and CEO (2008–2019)

Ahlström Oyj , various duties (1991–2008), President and CEO (2004–2008)

McKinsey & Company , Associate (1989–1991)

Other positions of trust:

Cargotec Corporation, Vice Chair of the Board (2024–) Paulig Oy , Member of the Board of Directors (2019–), Chair of the Board of Directors (2020–)

Sulapac Oy , Chair of the Board of Directors (2019–)

Atria Oyj , Member of the Board of Directors (2014–2022)

Neles Corporation , Chair of the Board of Directors (2020–2021)

Shares owned: 22,044 B shares

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Corporate governance statement | Metsä Board Annual review 2024

Mikko Mäkimattila

b. 1971 Male

M.Sc. (Agriculture and Forestry), Agronomist

Member of the Board since 2023

Independent of the company. Not independent of the company’s significant shareholder

Primary working experience:

RockRobot Oy , CEO (2021–)

Forestry and agriculture entrepreneur (1994–)

Potila Tuotanto Oy , CEO (2017–2020) Dometal Oy , CEO, partner (2011–2021)

Multiva Magyarország Kft. , CEO of the Hungarian subsidiary (2013–2021)

Farmit Website Oy , CEO (2005–2010)

Lännen Tehtaat Oyj , Development manager (2003–2005)

Suomen Gallup Elintarviketieto Oy , Research manager (2001–2003)

Pellervon taloudellinen tutkimuslaitos , Researcher (1998–2001)

Other positions of trust:

Metsäliitto Cooperative , Member of the Board (2020–), Vice Chair of the Board (2023–)

Pellervo Coop Center , Member of the Delegation (2023–)

LähiTapiola Loimi-Häme Regional Mutual Insurance Company , Member of the Board (2008–2022)

LocalTapiola General Mutual Insurance Company , Member of the Supervi- sory Board (2014–2023)

Dometal Oy , Member of the Board (2012–2021)

Potila Tuotanto Oy , Member of the Board (2013–2020)

Lähivakuutus Cooperative , Member of the Supervisory Board (2011–2014)

Forestry Management Association Loimijoki , Member of the Delegation (2005–2019)

Shares owned: 9,813 B shares

Juha Vanhainen

b. 1961 Male M.Sc. (Process Technology)

Member of the Board since 2023

Independent of the company and its significant shareholder

Primary working experience:

Apetit Plc , CEO 2015–2019

Stora Enso Oyj , EVP and Country Manager of Finland (several different areas of responsibility) 2007–2015

Stora Enso Oyj , several director and manager positions 1990–2007

Kemi Oy , engineer 1988–1990

Other positions of trust:

EKE-Construction Ltd. , Member of the Board of Directors (2022–)

Ponsse Plc , Member of the Board of Directors (2018–) Koskisen Corporation Plc , Chair of the Board of Directors (2020–2023)

Wihuri Group , Member of the Board of Directors (2018–2021)

FoodDrinkEurope , Member of the Board of Directors (2018–2019) Sucros Ltd , Vice Chair of the Board of Directors (2015–2019) Ekokem Oyj (now Fortum Waste Solutions Oy), Chair of the Board of Direc- tors (2015–2016), Member of the Board of Directors and Remuneration Committee (2014–2015)

Finnish Food and Drink Industries’ Federation (ETL) , Member of the Board of Directors and Working Committee (2015–2019)

Efora Oy , Chair of the Board of Directors (2013–2015), Member of the Board of Directors (2009–2013)

Finnish Forest Industries Federation , Chair of the Board of Directors and Working Committee (2012–2013), Vice Chair of the Board and Working Committee (2008–2011)

Confederation of European Paper Industries (CEPI) , Member of the Board of Directors (2012–2013)

Ilmarinen Mutual Pension Insurance Company , Member of Supervisory Board (2009–2015) Stora Enso Suzhou Paper (Suzhou) Co., Ltd. , Chair of the Board of Directors (2012–2014)

Stora Enso Huatai Paper (Shandong) Co., Ltd. , Chair of the Board of Directors (2009–2014)

Stora Enso Arapoti Industria De Papel S.A. , Member of the Board of Directors (2009–2014)

Pohjolan Voima Oy , Vice Chair of the Board of Directors and Member of the Remuneration Committee (2008–2015) Fortek Oy , Chair of the Board of Directors (2003–2008), Member of the Board of Directors (1999–2003)

Shares owned: 14,221 B shares

The shareholdings also take into account any shares held by controlling entities on 31 December 2024.

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Management Team of Metsä Board

Members of the Company’s Management Team:

Markku Leskelä

b. 1962 Male

Senior Vice President, Development

PhD.

Metsä Group employee since 2016. Metsä Board Corporation’s Senior Vice President, Development since 2021.

Main positions:

Metsä Board Corporation , Senior Vice President, Development (2021–)

Metsä Board Corporation , Vice President, Research and Product Develop- ment (2016–2021)

CLIC Innovation Ltd , Chief Technology Officer (2012–2015)

Paperra Oy , Partner (2010–2012)

Metsä Wood , Vice President, R&D (2009–2010)

Metsä Board Corporation , Vice President, R&D (2007–2009)

M etsä Board Corporation , Vice President, R&D, Head of Technology Centre Kirkniemi (2001–2007)

Metsä Board Corporation , various positions in R&D (1991–2001)

ESPRI/State University of New York , Syracuse, Visiting Scientist (1990–1991)

University of Oulu , Department of Biophysics, Research Scientist (1987–1990)

Positions of trust:

CLIC Innovation Ltd. , Chair of the Board (2024–), member of the Board (2020–)

Shares owned: 29,615 B shares

Mika Joukio

b. 1964 Male

Chief Executive Officer

M.Sc. (Tech.), MBA

Metsä Group employee since 1990. Metsä Board Corporation’s Chief Executive Officer since 2014.

Main positions:

Metsä Board Corporation , CEO (2014–) Metsä Tissue Corporation , CEO (2012–2014)

Metsä Board Corporation , Head of Consumer Packaging (2006–2012)

Metsä Board Corporation , Vice President and Mill Manager, Metsä Board Kyro and Metsä Board Tako (2006)

Metsä Board Corporation , Vice President and Mill Manager, Metsä Board Kyro (2005–2006)

Metsä Board Corporation , Senior Vice President, Corporate Logistics and Supply Chain (2004–2005)

Metsä Board Corporation , Vice President and Mill Manager, Metsä Board Äänekoski (2001–2004)

Various management positions in Metsä Board Corporation since 1990.

Positions of trust: Atria Plc , Member of the Board (2022–)

Finnish Forest Industries , Trade Policy Committee, Chair (2022–)

Varma Mutual Pension Insurance Company , Member of the Supervisory Board (2019–) Husum Pulp AB , Chair of the Board (2021–) Metsä Fibre Oy , Board of Directors, member (2014–)

Shares owned: 377,846 B shares

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Remuneration Report

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Remuneration report | Metsä Board Annual review 2024

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Remuneration report | Metsä Board Annual review 2024

The task of Metsä Board’s Investor Relations is to ensure that the market receives accurate and adequate information to determine the value of Metsä Board’s shares. The Investor Relations function engages in active dialogue with representatives of the cap- ital markets and is responsible for the planning and implementation of the company’s financial and investor communication.

The activities of Investor Relations also include collecting feedback from investors and market information for Metsä Board’s manage- ment and Board of Directors.

Meetings with investors and analysts are primarily attended by the Vice President for Investor Relations, the CFO and/or the CEO. All requests from investors are handled in a centralised manner by Investor Relations. During the silent period, the company will not provide comments on the company’s financial standing or outlook, or the market environment.

Investors website

More information about Metsä Board as an investment, as well as the company’s strategy, operating environment, financials and govern- ance, can be found on the company’s website at https://www.metsagroup.com/metsaboard/ investors/.

Investor relations in 2024

In 2024, several investor and analyst meetings were organised, both virtually and in person. Investors were met mainly in Finland, Central Europe and North America. Metsä Board also participated actively in investor conferences organised by brokerage firms.

The 2024 Annual General Meeting was held on 26 March 2024 in Espoo.

In connection with the publishing of each interim report, Metsä Board organises a webcast and conference call open to everyone. During the event, the CEO and CFO present the results, and the audience can ask questions. The recordings and presentation materials are available on the company’s website for at least five (5) years.

Metsä Board’s investor communication makes use of social media through X and LinkedIn accounts, for example.

Analyst coverage

At least the following brokerage firms conducted analyses of Metsä Board in 2024: ABG Sundal Collier, Carnegie, Danske Bank, DnB, Inderes, Nordea, OP Equities, SEB and UBS. The contact details of the analysts and some of the consen- sus forecasts are available on the company’s website.

Metsä Board is not responsible for the con- tent, accuracy or extent of the analysts’ views.

Annual General Meeting in 2025

Metsä Board’s Annual General Meeting will be held on Thursday 20 March 2025 at 2:00 p.m. EET in Finlandia Hall, Mannerheimintie 13 e, 00100 Helsinki, Finland. The notice to general meeting, including registration instructions, as well as the general meeting documents and additional information are available on the Company’s website at www.metsagroup.com/ agm2025.

Profit distribution

The Board of Directors proposes to the Annual General Meeting to be held on 20 March 2025 that a dividend of EUR 0.07 per share be paid for the 2024 financial period. The proposed dividend is in line with the company’s dividend policy.

The dividend will be paid to shareholders who are registered in the company’s shareholder register held by Euroclear Finland Oy on the date of record, 24 March 2025. The Board of Direc- tors proposes 31 March 2025 as the dividend payment date.

Contact details for investor relations

Katri Sundström

Vice President, Investor Relations

tel. +358 10 462 0101

katri.sundstrom@metsagroup.com

General questions and comments related to investor relations can be emailed to: metsaboard.investors@metsagroup.com.

Business ID 0635366–7

Metsä Board Corporation

Head office

PO Box 20

02020 METSÄ, Finland

Financial reporting in 2025

Silent period

Financial report

Publication date

1 January–6 February 2025

Financial Statements Bulletin 2024

6 February 2025

1 April–29 April 2025

Interim Report for January–March 2025

29 April 2025

1 July–31 July 2025

Half-year Financial Report for January–June 2025

31 July 2025

1 October–23 October 2025

Interim Report for January–September 2025

23 October 2025

Investor relations and investor information

201

To the Board of Directors of Metsä Board Corporation

We have performed a reasonable assurance engagement on the financial statements 743700KKB8Q035K38488-2024-12-31-0-en.zip of Metsä Board Corporation (Business ID 0635366-7) that have been prepared in accordance with the Commission’s regulatory technical standard for the financial year ended 31.12.2024.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for the preparation of the company’s report of the Board of Directors and financial statements (the ESEF financial statements) in such a way that they comply with the requirements of the Commission’s regulatory technical standard. This responsibility includes:

preparing the ESEF financial statements in XHTML format in accord- ance with Article 3 of the Commission’s regulatory technical standard

tagging the primary financial statements, notes and company’s identi- fication data in the consolidated financial statements that are included in the ESEF financial statements with iXBRL tags in accordance with Article 4 of the Commission’s regulatory technical standard and

ensuring the consistency between the ESEF financial statements and the audited financial statements.

The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the prepa- ration of ESEF financial statements in accordance with the requirements of the Commission’s regulatory technical standard.

Auditor’s independence and quality management

We are independent of the company in accordance with the ethical require- ments that are applicable in Finland and are relevant to the engagement we have performed, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

The auditor applies International Standard on Quality Management (ISQM) 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Auditor’s responsibilities

Our responsibility is to, in accordance with Chapter 7, Section 8 of the Securities Markets Act, provide assurance on the financial statements that have been prepared in accordance with the Commission’s regulatory technical standard. We express an opinion on whether the consolidated financial statements that are included in the ESEF financial statements have been tagged, in all material respects, in accordance with the require- ments of Article 4 of the Commission’s regulatory technical standard.

Our responsibility is to indicate in our opinion to what extent the assurance has been provided. We conducted a reasonable assurance engagement in accordance with International Standard on Assurance Engagements (ISAE) 3000.

The engagement includes procedures to obtain evidence on:

whether the primary financial statements in the consolidated financial statements that are included in the ESEF financial statements have been tagged, in all material respects, with iXBRL tags in accordance with the requirements of Article 4 of the Commission’s regulatory technical standard and

whether the notes and company’s identification data in the consolidated financial statements that are included in the ESEF financial statements have been tagged, in all material respects, with iXBRL tags in accordance with the requirements of Article 4 of the Commission’s regulatory technical standard and

whether there is consistency between the ESEF financial statements and the audited financial statements.

The nature, timing and extent of the selected procedures depend on the auditor’s judgment. This includes an assessment of the risk of a material deviation due to fraud or error from the requirements of the Commission’s regulatory technical standard.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

Our opinion pursuant to Chapter 7, Section 8 of the Securities Markets Act is that the primary financial statements, notes and company’s identification data in the consolidated financial statements that are included in the ESEF financial statements of Metsä Board Corporation 743700KKB8Q035K38488-2024-12-31-0-en.zip for the financial year ended 31.12.2024 have been tagged, in all material respects, in accordance with the requirements of the Commission’s regulatory technical standard.

Our opinion on the audit of the consolidated financial statements of Metsä Board Corporation for the financial year ended 31.12.2024 has been expressed in our auditor’s report dated 6.2.2025. With this report we do not express an opinion on the audit of the consolidated financial statements nor express another assurance conclusion.

Helsinki 20 February 2025

KPMG OY AB

Kirsi Jantunen

Authorised Public Accountant, KHT

Independent auditor’s report on the ESEF financial statements of Metsä Board Corporation

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