ESG Presentation Metsä Board Corporation February 2021 Contents • From sustainably managed northern forests to ecological high-quality paperboards • Fresh fibre paperboards offer solutions to global challenges • Mitigating climate change: Metsä Board’s own actions and sustainability targets for 2030 • Commitments in sustainability and external recognitions • Contact information From sustainably managed northern forests to ecological high-quality paperboards Metsä Board in brief Sales split by product Other operations Market 5% Strong market position pulp 12% in folding boxboard and white kraftliners in Europe 2020: #1 in coated white kraftliners globally EUR White 1,890m kraftliners Long-term customerships 25% Folding boxboard Our customers include brand owners, 59% converters, manufacturers of corrugated products and merchants Sales split by region APAC 9% Paperboard capacity Pulp surplus* Americas 23% 2020: 2,000,000 400,000 EUR EMEA tonnes/year tonnes/year 1,890m 68% *) includes the 24.9% holding in Metsä Fibre 4 Metsä Board benefits from Metsä Group’s value chain • High availability of Northern wood – 100,000 Finnish forest owners as our owner base • Good control of wood raw materials from forests to pulp and board production • Consistent quality of fibres that are tailor-made for the end products METSÄ GROUP METSÄLIITTO COOPERATIVE, Group’s parent company owned by 100,000 Finnish forest-owners METSÄ FOREST METSÄ WOOD METSÄ FIBRE METSÄ BOARD METSÄ TISSUE WOOD SUPPLY AND WOOD PRODUCTS PULP AND PAPERBOARD TISSUE AND FOREST SERVICES SAWN TIMBER GREASEPROOF PAPERS Holding Holding Holding Holding Holding Metsäliitto Cooperative 100% Metsäliitto Cooperative 100% Metsäliitto Cooperative 50.1% Metsäliitto Cooperative 48% Metsäliitto Cooperative 100% Metsä Board 24.9% share of votes 67% Itochu Corporation 25.0% Listed on Nasdaq Helsinki METSÄ SPRING INNOVATION COMPANY From 2021 onwards Metsä Board's annual net pulp balance shows 400,000 tonnes surplus. We focus on premium fresh fibre paperboards and z a high level of sustainability FOCUS We are the leader in sustainability, focusing on premium VISION fresh fibre products for consumer and retail packaging. The high performance of our products is based on Preferred supplier of innovative and technical excellence and tailor-made, high-quality, Nordic sustainable fibrez-based packaging pulps. solutions, creating value for customers globally GROWTH We grow globally together with our existing and new customers by offering sustainable,z safe and high- MISSION performing products. Our growth is based on skilled people, industry-leading products and innovative packaging solutions. Packaging solutions that respect nature PROFITABILITY Our profitability is based on the efficiency of our operations and prioritisation of businesses that benefit from the high performance of our products and services. Each part of the tree is used for the purpose that creates most value – nothing goes to waste Bark, branch and top • Metsä Group’s value chain ensures that each part of the felled tree to renewable energy is being used production Pulpwood • For every harvested tree new seedlings are planted to pulp production and by-products • All wood sourced is 100% traceable and comes from sustainably managed northern forests ensuring the biodiversity and recreational use of forests • 80% of wood sourced is certified and 20% originates from controlled Sawlogs forest sources to wood products • All parties in our wood fibre supply chain have PEFC™ and FSC® Chain of Custody certificates (PEFC™02-31-92, FSC®-C001580) Wood is Metsä Board’s main raw material • Wood represents roughly 27% out of Metsä Board’s total costs (including the wood cost of pulp purchased from Metsä Fibre) • Sourcing function is centralized in Metsä Forest • Majority of wood sourced in Finland comes from the members of Metsäliitto Cooperative • In 2020 Metsä Board sourced 8.2 million m3 wood – This includes the wood bought to Metsä Board pulp/BCTMP mills (5.3 Mm3) and the wood used in pulp that Metsä Board buys from Metsä Fibre (2.9 Mm3) Metsä Board’s wood sourcing areas • Certified wood fibre accounted for Russia 80% of wood fibre procurement in 10% 2020 Baltic countries 11% Finland 51% Sweden 28% 8 Finland – the most forested country in Europe The area of Finland 5% Cities, villages and roads Annual growth of Finnish forests is 10% Fields and agricultural use 100+ over 100 million m3 – more than ever MILLION M3 10% Lakes and rivers Forests grow more than they are used, annual harvesting 73 million m3 (2019) Four seedlings are planted for each harvested tree 75% Forest Over 20% of the Finnish export comes from forest-based products Fresh fibre paperboards offer solutions to global challenges Fresh fibre paperboards offer solutions to support circular economy and mitigate climate change Increased waste Replacing fossil- Reducing carbon Ensuring product generation due to based materials, i.e. footprint safety urbanization plastics The solution: The solution: The solution: The solution: lightweight pure and safe fresh Paperboard is renewable and packaging, fibres recyclable and biodegradable renewable energy, fibres are recycled wood fibre efficient energy and several times water usage Paperboard is widely collected for recycling and returned to the recycling loop Recycling rates (% of materials collected for recycling) 83% 42% 81% 14% Sources: Eurostat and EPA 12 Fresh fibre keeps the recycling loop going Fresh fibres are needed to ensure strength and purity, and PAPERBOARD IS HIGHLY to keep the RECYCLED BUT 100% recycling loop RECOVERY IS NOT RENEWABLE POSSIBLE ongoing FRESH FIBRE from sustainably managed forests Not all paper and board are recyclable e.g. toilet paper, stained packaging CIRCULATION 3.6 times on average / year Sorting based on quality Source: CEPI results in rejecting part of material RECOVERED FIBRE from communities FIBRE QUALITY Fibre loss in de-inking process deteriorates in recycling THE QUALITY OF COLLECTED PAPER CONSTANTLY DECLINES Less office and graphic papers 13 Recycled fibre Fresh fibre • While recycled fibre packaging is suitable • Fresh fibres are traceable, naturally pure for certain goods, migration of mineral oils and free from unknown chemical from recycled fibre based packaging into substances foodstuffs may pose a health hazard → Ideal for high-end branded products and → Many countries restrict the use of food end-uses, where consumer safety is a recycled fibres in direct food contact priority • Wood fibre can on average be reused 5–7 • Without a continuous inflow of fresh fibre times before it becomes too degraded for into the recycling loop, very soon there further material use would not be any recycled fibre available Safety – consumers and Legislation and various legislators react to health country-specific risks recommendations increasingly limit the use of recycled fibres in food packaging. Consumers today are more aware of chemicals contained in recycled fibres Recycling is of utmost importance and their health and recycled fibres are excellent raw effects on humans materials – but not for packing food. Fresh fibres are the safest choice. Potential from circular economy • Several brand owners, retailers, organisations and governments have made own commitments to switch to recyclable, compostable or reusable packaging • The EU’s Circular Economy Action Plan, as part of the Green Deal, strives for • reducing packaging waste • driving design for re-use and recyclability • considering reducing the complexity of packaging materials to improve collection, sorting and recycling • Metsä Board’s lightweight paperboards are designed to be recycled. In addition, all Metsä Board paperboards, excluding PE coated grades, hold industrial compostability certificates (DIN EN 13432, ASTM D6400), and some grades are certified also for home compostability (NF T 51-800) Metsä Board’s plastic-free eco-barrier paperboard: • Medium barrier for grease and moisture 16 • Can be recycled in paper or paperboard streams or can be composted Fresh fibre paperboard is an alternative to plastics Consumers regard paperboard as a more sustainable choice than plastic packaging* Why do we package? The size of total packaging market is USD 920 billion • The most important function of packaging is to calculated from the value of finished packaging article ensure a product’s safety to consumer and to reduce Source: Smithers Pira wastage in the value chain Glass • The carbon footprint of packaging is usually minimal 6% compared to the packaged product Metal Paperboard 13% 33% *Consumer research company Sense N Insight’s study for Metsä Board Most suitable replacement options are Plastic in rigid plastics and food packaging 36% Other fibre-based 12% 17 High-yield pulp makes the difference in folding boxboard Metsä Board’s folding boxboard can be up to 30% lighter compared to recycled fibre or solid bleached board (WLC, SBS) with an equivalent stiffness. Light weight Three-layer structure of folding boxboard → better yield and sustainability High strength and bending stiffness → secure protection High brightness and smoothness → excellent printability Consistent quality → improved production efficiency Better with less – same stiffness but less weight Weight of 50,000 sheets in size 28” x 40” (B1) to gain CD stiffness of 120 gf-cm & MD Stiffness of 230 gf-cm 11.1 t Metsä Board folding boxboard 280 gsm 12.9 t Solid bleached board (SBB) 324 gsm 13.8 t Coated natural kraft(CNK) 347 gsm 15.0 t Coated recycled board (CRB) 376 gsm Lighter MetsäBoard