Annual Report 2012 Including Sustainability Report (Publ) • P.O
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Annual report 2012 including sustainability report 2012 report Annual 2 012 Annual report including sustainability report Holmen AB (publ) • P.O. Box 5407, SE-114 84 STOCKHOLM, SWEDEN Tel +46 8 666 21 00 • Fax +46 8 666 21 30 • E-mail [email protected] • www.holmen.com • ID No. 556001-3301 • Registered office Stockholm BRAVIKEN PAPER MILL Raw materials: Spruce pulpwood and Contents recovered paper. Process: TMP and DIP. Products: MF Magazine, newsprint and telephone directory paper. The Board of Directors and the CEO of Holmen Aktiebolag (publ.), corporate identity number 556001-3301, submit their Production capacity: 750 000 tonnes/year. annual report for the parent company and the Group for the 2012 financial year. The annual report comprises pages Average no. of employees: 551. 4–88. The results of the year’s operations and the financial position of the parent company and the Group are presented in the administration report, pages 4–53, and the accompanying income statements and balance sheets, together with BRAVIKEN SAWMILL the notes and supplementary information. The Group’s income statement and balance sheet and the parent company’s Raw materials: Spruce saw logs. income statement and balance sheet will be submitted to the Annual General Meeting for adoption. Process: Sawmilling. Products: Spruce sawn timber. Production capacity: 550 000 m3/year. Average no. of employees: 94. CEO’s message 2 ANNUAL REPORT List of notes HALLSTA PAPER MILL Business operation 1. Accounting policies 64 Raw materials: Spruce pulpwood. The year in brief 4 2. Operating segment reporting 68 Process: TMP and groundwood pulp. 3. Other operating income 70 Products: MF Magazine, SC paper and Strategy 6 4. Employees, staff costs and remuneration to book paper. Printing paper 10 senior management 70 Production capacity: 670 000 tonnes/year. Average no. of employees: 613. Paperboard 14 5. Auditors’ fee and remuneration 71 Sawn timber 18 6. Net financial items and income from financial instruments 72 Forest 22 7. Taxes 72 IGGESUND MILL Energy 26 8. Earnings per share (EPS) 75 Raw materials: Softwood and hardwood Risk management 28 9. Intangible non-current assets 75 pulpwood. Process: Sulphate pulp. 10. Property, plant and equipment 76 Sustainability Products: Solid bleached board, plastic- Principles 32 11. Biological assets 77 coated paperboard and sulphate pulp. Environmental responsibility 34 12. Interests in associates and other shares and Production capacity: 340 000 tonnes/year participating interests 78 Holmen’s carbon footprint 37 (paperboard). 13. Financial instruments 79 Average no. of employees: 910. Employees 38 14. Inventories 82 Sustainable products 41 15. Operating receivables 82 IGGESUND SAWMILL Dialogue with stakeholders 42 16. Equity parent company 82 Assurance report 43 Raw materials: Pine saw logs. 17. Pension provisions 83 Process: Sawmilling. Corporate governance 18. Other provisions 84 Products: Pine sawn timber. 3 19. Operating liabilities 84 Production capacity: 330 000 m /year. Corporate governance report 44 Average no. of employees: 100. Board of Directors 48 20. Operating leases 84 Group management 50 21. Pledged collateral and contingent liabilities 85 The share and shareholders 51 22. Related parties 85 23. Interests in Group companies 86 HOLMEN PAPER MADRID Financial statements 24. Untaxed reserves 87 Raw materials: Recovered paper. Process: DIP. Income statement 56 25. Cash flow statement 87 Products: Newsprint. Statement of comprehensive income 57 26. Key assessments and estimates 87 Production capacity: 330 000 tonnes/year. Balance sheet 58 Average no. of employees: 188. Changes in equity 59 Cash flow statement 60 Parent company 62 WORKINGTON MILL Notes 64 Raw materials: Spruce pulpwood and purchased sulphate pulp. Appropriation of profits 88 Process: RMP. Audit report 89 Products: Folding boxboard. The cover is printed on Iggesund Paperboard’s Invercote® Creato Production capacity: 200 000 tonnes/year. 280 gsm. It is matt laminated and partially UV-varnished. Annual General Meeting, calendar, information 90 Average no. of employees: 421. Five-year review, sustainability 91 The annual report is produced by Holmen. This is a translation of the Swedish annual report of Holmen Aktiebolag (publ.). Layout: BYN Kommunikationsbyrå AB in cooperation with Holmen. Ten-year review, finance 94 In the event of inconsistency between the English and the Swedish versions, Graphic production: Gylling Produktion AB. Definitions and glossary 96 the Swedish version shall prevail. Photos: Rolf Andersson, Träpriset/Åke E:son Lindman, Facts about industrial sites Skogforsk/Erik Viklund, Ulla-Carin Ekblom and others. Print: Åtta.45 Holmen Annual report 2012 Business areas: Products HOLMEN PAPER Products: Customers: Production facilities: Production Printing paper for magazines, Retailers, magazine, book and Braviken Paper Mill, Hallsta capacity/year: product catalogues, direct daily newspaper publishers, Paper Mill and Holmen Paper 1 750 000 mail, books, newspapers and telephone catalogue publishers, Madrid. tonnes. telephone directories. and printers. Main market: Europe. IGGESUND PAPERBOARD Products: Customers: Production facilities: Production Solid bleached board (SBB) Converters of paperboard for Iggesund Mill and capacity/year: and folding box board (FBB) packaging, as well as printers and Workington Mill. 540 000 tonnes. for consumer packaging and wholesalers. graphical printing. Main market: Europe. HOLMEN TIMBER Products: Customers: Production facilities: Production Pine joinery timber and spruce Joinery and furniture industry, Braviken Sawmill and capacity/year: construction timber. planing mills, builders’ merchants, Iggesund Sawmill. 880 000 house construction firms, etc. cubic metres. Main market: Europe, North Africa and the Middle East. Business areas: Raw materials HOLMEN SKOG Products: Operations: Holding: Annual Wood and biofuel. Responsible for Holmen’s forests Total land acreage harvesting: and for wood supply to the 1 266 000, of which 3.2 million m3sub. Group’s Swedish units. 1 033 000 hectares of productive forest land with Customers: a volume of wood of Annual 3 Pulp and paper industry, sawmills 119 million m growing growth: and thermal plants. stock, solid over bark. 3.8 million m3sub HOLMEN ENERGI Products: Operations: Production facilities Production Hydro power, wind power and Responsible for the Group’s hydro (wholly and partly owned): capacity/year: peat. and wind power plants, as well 21 hydro power stations and 1 112 GWh from as the electricity supply to the 2 wind farms. hydro power. Group’s Swedish units. 1 Holmen Annual report 2012 Dear shareholder A strained global economy and continued we have decided to keep up the pressure re- however, competition in the market for con- crisis in the eurozone also made their mark garding these issues. sumer paperboard is stiffening. For Holmen, on 2012. This has meant tough challenges, Holmen will soon be coming to the end of it is important to constantly ensure that we redundancies and closures in several indus- a period of several weighty investments that are better than the others, a challenge we tries – not least the forest industry, which are laying a solid foundation for the future. adopted many years ago that does not de- has experienced weak demand for several of The years to come will feature a more re- crease in magnitude. This is especially crucial its products alongside selling prices either strained volume of investment and focus on in a market with limited growth. standing still or falling. This development getting the maximum value from the structure In June, the new recovery boiler and tur- has also affected Holmen and, combined we have created. This lays the groundwork bine at Iggesund Mill were commissioned, with an extremely strong Swedish krona for increasing the cash flow of the business and the new biofuel boiler at the mill in and expiring currency hedges, has meant a and, in view of this, the Board has resolved Workington will begin operation in spring decline in profit. This was mitigated by an to propose an increase in dividend of SEK 1, 2013. The latter boiler will replace an old increase in the value of our forests, along making the dividend per share SEK 9. natural gas combined heat and power plant. with initiatives to improve efficiency and The investments leave us well equipped Taken together, this means that we have now reduce costs. for the challenges that lie ahead. two well-invested paperboard mills that are The stronger krona has led to a new com- highly competitive in terms of both quality petitive situation for companies whose pro- Market-leading paperboard and cost. This provides us with the strength duction is predominantly based in Sweden. It producer in demanding and potential to further develop our two requires initiatives with a deeper impact that segments brands, Invercote and Incada, as regards involve cost savings and other measures to Iggesund Paperboard focuses on the highest both quality and service in order to meet the improve efficiency. Such initiatives will not quality segments with the aim of being the demands of future customers. change the situation overnight; rather, they first choice for those with particularly strin- Both investments are good examples of need to be implemented persistently over gent demands on quality and service. Due how Holmen operations are contributing to time in order to achieve results. At Holmen, to competitors investing in greater capacity, the crucial switchover to a resource-efficient