Operational risks

A one per cent change in deliveries and price of the Group’s products or significant inputs is deemed to affect Group operating profit as per the table below.

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.

Impact on operating
profit, SEKm

Year 2019

Change

Price

Deliveries

Paperboard +/-1 % 60 29
Paper +/-1 % 58 20
Wood products +/-1 % 17 5
Wood from company forests +/-1 % 13 9
Hydro and wind power +/-1 % 4 3
       

Input goods

Year 2019

     
Wood* +/-1 % 31  
Electricity* +/-1 % 11  
Chemicals +/-1 % 15  
Other variable costs +/-1 % 7  
Delivery costs +/-1 % 15  
Employees +/-1 % 23  
Other fixed costs +/-1 % 17  

* Taking account of harvesting of company forests and generation of own electricity, net earnings sensitivity for the Group was SEK 18 million for wood and SEK 8 million for electricity. 


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 420 million a year. In addition, a 30 per cent change in the price of electricity would affect earnings before tax by SEK 235 million a year, excluding hedging.

Earnings before tax*

Year 2019

Change

SEKm

Exchange rates +/-5 % 162
SEK/EUR +/-5 % 8
SEK/USD +/-5 % 65
SEK/GBP +/-5 % 44
SEK/Other currencies +/-5 % 46
Electricity price +/-25 % 23
Borrowing rate +/-0.5 % unit 13
     

Equity

Change

SEKm

Transaction hedging +/-5 % 511
Investment hedging +/-5 % 42
Equity hedging +/-5 % 9
Electricity price hedging +/-25 % 159
Interest rate changes +/-0.5 % unit 19

*Estimated effect for 20120 including hedging

 

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Financial risks

Operational risks