Financial risks

Metsä Board is focusing on the active development and growth of its paperboard business. Growing the paperboard business and introducing new production to the market are dependent on the successful sales growth in Europe, and particularly in the Americas. Increasing sales at the global level also involves cost and exchange rate risks.

The exchange rate of the euro in relation to the US dollar and Swedish krona impacts Metsä Board’s profitability. The company is growing its operations in North America, in particular, which is why the sensitivity of the result to the exchange rate fluctuations of the US dollar continues to increase. Metsä Board’s financial risks, related primarily to currencies, interest rates, liquidity, counterparty risks and the use of derivative instruments as well as the management thereof, are described in greater detail on 2016 Annual Report on pages 65–73.

Risks associated with the availability of financing

Furthermore, as a result of increasing regulation in the financial market, the operations of credit and bond markets may become more difficult, which may impact 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 units enough time to adjust their operations according to the changing conditions. Metsä Board’s financial risks and the management thereof are described in more detail on 2016 Annual Report on pages 65–73.