Financial risks

Financial risks

Metsä Board is focusing on the active development and growth of its paperboard business. Increasing sales at the global level also involves cost and exchange rate risks.

Financial risks

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 changing conditions.


FX sensitivities
The US dollar strengthening by 10% against the euro would have a positive impact of approximately EUR 62 million on Metsä Board's annual operating result. Correspondingly, the Swedish krona strengthening by 10% would have a negative impact of approximately EUR 39 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.

Credit risks
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 2019. The main principles of credit control are defined in the credit guidelines of the risk management policy approved by the company’s Board of Directors. Metsä Board’s financial risks and their management are described in more detail in the Notes to the Consolidated Financial Statements, found on pages 80–90 of the 2019 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 2020 January-September Interim  Report published on 29 October 2020.

Created with Highcharts 4.1.5The total packaging market Roughly USD 850 billion 55.0 % 36.0 % 7.0 % 2.0 %USDSEKGBPother currencies1/2

FX sensitivities excluding hedges

10% strengthening of foreign currency vs. EUR will have an impact on Metsä Board’s EBIT of

Currency Next 12 months
USD, $ EUR +62 million
EUR -39 million
GBP, £ EUR +9 million