Operational risks
A 1 per cent change in deliveries and price of the Group’s products or significant input goods is deemed to affect Group operating profit as per the table to the right. Earnings are relatively evenly spread over the
year. The clearest seasonal effects are lower personnel costs in the third quarter and the fact that electricity production at the hydro power plants is normally higher in the first and fourth quarters. Holmen hedges parts of the electricity consumption by the paper business area. For 2022, 90 per cent of electricity consumption was hedged. At year-end, 90 per cent of electricity consumption was hedged for 2023. For 2024, 60 per cent has been hedged, while for 2025 the figure is 25 per cent.
Impact on operating
|
Change |
Price |
Deliveries |
| Paperboard | +/-1 % | 66 | 35 |
| Paper | +/-1 % | 84 | 42 |
| Wood products | +/-1 % | 50 | 24 |
| Wood from company forests | +/-1 % | 15 | 10 |
| Hydro and wind power | +/-1 % | 12 | 10 |
Input goodsYear 2022 |
|||
| Wood* | +/-1 % | 36 | |
| Electricity* | +/-1 % | 2 | |
| Chemicals | +/-1 % | 20 | |
| Other variable costs | +/-1 % | 9 | |
| Delivery costs | +/-1 % | 22 | |
| Employees | +/-1 % | 30 | |
| Other fixed costs | +/-1 % | 14 |
*Taking electricity price hedges for 2023 into account. Without taking hedges into account, the corresponding figure would be SEK 39 million.
Financial risks
The table to the right shows the extent of the impact from a change in the Swedish krona,the price of electricity and the market interest rate on Group profit before tax and equity next year, taking account of hedging. The adopted change is calculated based on five years’ average historical volatility for each instrument, which is deemed a reasonable change going forward. Historical volatility on exchange rates is calculated based on average annual volatility on the KIX, the Riksbank’s exchange rate index. Excluding hedging, a 5 per cent change in the krona would affect earnings before tax by SEK 500 million a year.
Earnings before tax*Year 2022 |
Change |
SEKm |
| Exchange rate total | +/-5 % | 180 |
| EUR/SEK | +/-5 % | 18 |
| USD/SEK | +/-5 % | 68 |
| GBP/SEK | +/-5 % | 46 |
| Other currencies/SEK | +/-5 % | 48 |
| Borrowing rate | +/-1 % point | 1 |
Equity |
Change |
SEKm |
| Transaction hedging | +/-5 % | 590 |
| Investment hedging | +/-5 % | 11 |
| Equity hedging | +/-5 % | 79 |
| Electricity price hedging | +/-60 % | 2 625 |
| Interest rate changes | +/-1 % point | 8 |
*Estimated effect for 2023 including hedging.