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 enough time to adjust to
The US dollar strengthening by 10% against the euro would have a positive impact of approximately EUR 75 million on Metsä Board’s annual operating result. Correspondingly, the Swedish krona strengthening by 10% would have a negative impact of approximately EUR 45 million. The British pound strengthening by 10% would have a positive impact of approximately EUR 9 million. The impact of weakened exchange rates would be the opposite. The sensitivities do not include the impact of hedging.
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 limits on credit
extended to customers and the applicable terms of payment in cooperation with
the centralised credit control. Nearly all credit risks are transferred by means of
credit insurance contracts. Metsä Board’s customer credit risk was at a normal
level in 2020. The main principles of credit control are defined in the credit
guidelines of the risk management policy approved by the company’s Board of
Metsä Board’s financial risks and their management are described in more detail on pages 88–90 of the 2020 Annual Report.
Hedging policy: 100% of balance sheet position and 50% of annual net FX flows.
The data in the below tables is from Metsä Board's January-June 2021 half-year financial report published on 28 July 2021.