AGM Information • Feb 25, 2025
AGM Information
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are hereby invited to attend the Annual General Meeting at 15.00 CET on Monday 31 March 2025, in Vinterträdgården, Grand Hôtel (Royal entrance), Stallgatan 6, Stockholm, Sweden
Shareholders wishing to exercise their voting rights and participate in the AGM must:
Shareholders who are represented by a proxy must issue a written, dated authorisation for the proxy. A proxy form is available at www.holmen.com, and is also available by post on request from shareholders. If the shareholder is a legal entity, certificate of registration or other authorisation documents must be enclosed. Copies of the documents should, to facilitate entrance, be sent in advance to the abovementioned e-mail address or postal address.
The Annual General Meeting has previously decided to set up a Nomination Committee to make proposals concerning the election of Board members and the Board's fees and, when relevant, the election of auditors and the auditors' fees. As decided by the AGM, the Nomination Committee shall consist of the Chair of the Board and one representative of each of the three largest shareholders by voting rights on 31 August each year. Prior to the 2025 AGM, the Nomination Committee consisted of Bo Selling, L E Lundbergföretagen; Lars Ericson, Kempestiftelserna; Vegard Torsnes, Norges Bank; and Fredrik Lundberg, Chair of the Board. The Chair of the Nomination Committee is Bo Selling.
The Nomination Committee has submitted the following proposals:
It is proposed that fees be paid to the auditors against approved invoices.
Item 14 The Nomination Committee proposes the re-election of Fredrik Lundberg, Alice Kempe, Louise Lindh, Ulf Lundahl, Fredrik Persson, Henrik Sjölund, Henriette Zeuchner, and Carina Åkerström, as well as the election of Stefan Widing as a new member, for the period until the end of the next Annual General Meeting.
Lars Josefsson has declined re-election.
It is proposed that Fredrik Lundberg be re-elected Chair of the Board of Directors.
Item 15 The Nomination Committee proposes, in accordance with the Audit Committee's recommendation, the re-election of auditing firm PricewaterhouseCoopers AB as the Company's auditor until the end of the next Annual General Meeting. They have communicated that authorised public accountant Magnus Svensson Henryson will be main responsible auditor if re-elected.
The Board proposes that a dividend of SEK 12.00 per share be paid. The Board proposes that the dividend date of record be Wednesday 2 April 2025. Provided the Annual General Meeting resolves in favour of the proposal, the dividend should be distributed by Euroclear Sweden on Monday 7 April 2025.
The Board of Directors proposes that the Annual General Meeting resolve on a new long-term share savings program ("the Program" or "LTIP 2025"). The Program is aimed at the Group Executive Management and Business Area Management teams and will be implemented after the Annual General Meeting.
The Annual General Meetings in 2022 and 2024 resolved on long-term share savings programs ("LTIP 2022" and "LTIP 2024", respectively), which will expire in connection with the publication of Holmen's interim report for the first quarter of 2025 and 2027, respectively. The programs are similar, but LTIP 2022 includes a broader group of key individuals, whereas LTIP 2024 includes only the Group Executive Management. Additionally, LTIP 2024 introduced a climate-related target for the allocation of Performance Shares II.
The Board considers the programs to be appropriately designed and proposes that the 2025 Annual General Meeting adopt a long-term share savings program with terms that are, in all material respects, equivalent to those of LTIP 2024. Since LTIP 2022, which includes business area management
teams, expires in 2025, the Board proposes that LTIP 2025 should include not only the Group management but also the business area management teams.
The overall purpose of the Program is to maintain a strong alignment of interests between key individuals within the Group and the shareholders and to continue fostering a long-term commitment to Holmen. The Program is intended to attract and retain employees who are crucial to Holmen's continued success. It should be achievable, easy to understand, cost-effective to administer, and simple to communicate.
The board proposes that the implementation of the Program shall be according to the main terms outlined below.
a. The Program is proposed to be directed at a maximum of 45 permanently employed individuals within the Holmen Group, who are divided into the following four categories: the CEO of Holmen ("Group 1"), the Deputy CEO of Holmen ("Group 2"), other members of the Group Executive Management ("Group 3"), and the Business Area Management teams ("Group 4"). The participants in Groups 1–4 is collectively referred to as "the Participants."
b. To participate in the Program, it is required that the Participants personally invest in class B shares in Holmen and that these shares are allocated to the Program ("Savings Shares")
c. For each Savings Share, the Participants can be allotted one half (0.5) class B shares in Holmen, free of charge, either by Holmen, by another company in the Holmen group, or by a designated third party ("Performance Share I"). Performance Shares I are allotted on the condition that the total shareholder return on class B shares in the company exceeds 10 percent during 2025–2027 ("TSR condition")
d. Participants will also have the opportunity, depending on the fulfillment of certain performance conditions, to be allotted additional class B shares in Holmen, free of charge, either by Holmen, by another company in the Holmen group, or by a designated third party ("Performance Shares II"). For each Savings Share, the Participant may be allotted Performance Shares II in accordance with the following:
Allocation of Performance Shares II shall be based 90 percent on an average return on capital employed1 for the two business areas, Cardboard & Paper and Wood Products, during the fiscal years 2025, 2026 and 2027 ("Financial Target"). For Performance Shares II to be awarded in relation to the Financial Target, a minimum level of 10 percent ROCE must be exceeded, and for maximum allocation, a maximum level of 20 percent ROCE must be achieved. If a level between the minimum and maximum levels is reached, Participants will receive a linear allocation of Performance Shares II in relation to the Financial Target.
The allocation of Performance Shares II shall be based 10 percent on Holmen's climate benefit ("Sustainability Target"). Holmen's climate benefit is described and defined in more detail in the annual report for the financial year 2024 on page 36. For allocation related to the Sustainability Target, the reported climate benefit, measured as an average over the financial years 2025–2027, must have increased compared to the reported climate benefit in the reference year 2024 (adjusted for any extraordinary events, such as major acquisitions, divestments, or equivalent, as well as adjusted for any changes in definitions and methodology for calculating climate benefit). If the climate benefit decreases or remains unchanged during the measurement period, no allocation of Performance Shares II related to the Sustainability Target will take place.
e. Performance Shares I and II will be allotted after the end of an earning period, which runs from May 31, 2025, until the day of the publication of Holmen's interim report for the first quarter of 2028 ("Earning Period").
1 Operating result (excluding comparability-distorting items) expressed as a percentage of average employed capital, as defined in the annual report for each year.
The maximum value of the right to receive a Performance Share I or a Performance Share II shall be limited to 200 percent of the volume-weighted average price of Holmen's class B share during the five trading days immediately following the day of the publication of Holmen's interim report for the first quarter of 2025 ("Cap"). If the value of such a right (calculated based on the volume-weighted average price of Holmen's class B share during the five trading days immediately following the day of the publication of the interim report for the first quarter of 2028, less any dividend resolved by the annual general meeting that has not yet been separated from the share) exceeds the Cap, a proportional reduction of the number of Performance Shares I and Performance Shares II to be allotted shall occur to the extent necessary to not exceed the Cap. This limitation enables control and creates predictability over the maximum scope and cost of the Program.
f. Each Participant may invest in Savings Shares up to an amount equal to a maximum of 10 percent of their respective annual individual gross base salary for 2025.
g. Participants shall invest in Savings Shares during the period from May 9 – May 30, 2025, with the right for the board to extend (or postpone) the investment period for individual Participants if there are special reasons.
h. Performance Shares I and Performance Shares II are normally to be allotted only after the end of the Earning Period.
i. A condition for a Participant, where applicable, to be allotted Performance Shares I or Performance Shares II is that they, with certain exceptions, have been employed within the Holmen group throughout the Earning Period and that the Participant, until the end of the Earning Period, has retained the Savings Shares invested within the Program. Savings Shares that have been disposed of before the end of the Earning Period shall not be included in the calculation to determine the allotment of Performance Shares I or Performance Shares II.
j. If significant changes occur within the Holmen group or in the market that, in the board's assessment, would render the conditions for the allotment of Performance Shares I or Performance Shares II under the Program no longer reasonable, the board shall have the right to make adjustments to the Program, including, but not limited to, the right to decide on reduced allotment of Performance Shares I or Performance Shares II, or that no allotment of Performance Shares I or Performance Shares II shall occur at all.
k. The board shall have the right to decide on the detailed terms of the Program. In this regard, the board shall have the right to make necessary adjustments to these terms to comply with specific rules or market conditions outside of Sweden.
l. Participation in the Program is subject to such participation being legally permissible in the relevant jurisdictions. If Participants outside of Sweden, in the board's assessment, cannot be allotted Performance Shares I or Performance Shares II at a reasonable cost or with reasonable administrative efforts, the board shall have the right to decide on cash settlement for such Participants.
m. The Program shall encompass a maximum of 100 000 class B shares in Holmen (including Performance Shares I and Performance Shares II).
n. The number of Performance Shares I and Performance Shares II shall be adjusted as a result of subsequent bonus issue, share split, rights issue, dividend exceeding 5 percent of the equity in the Holmen group for a specific fiscal year, and/or other similar corporate events.
The costs of the Program, as reported in the income statement, are calculated according to the accounting standard IFRS 2 and accrued over the vesting period. The calculation has been performed based on the noted closing price of the Class B shares in Holmen as of February 20, 2025, i.e., 424 SEK per share, and with the following assumptions: (i) an annual dividend yield of approximately 3 percent, (ii) an annual employee turnover of 5 percent, (iii) that the TSR condition is met, (iv) an average fulfillment of the Financial Target of 50 percent and fulfillment of the Sustainability Target, and (v) the total maximum number of shares available for allocation as per section A.m above. In addition to the above, the costs of the Program have been based on the assumption that the Program includes 45 Participants and that each Participant makes a maximum investment.
The total estimated costs of the Program according to IFRS 2 amount to approximately 17 MSEK, excluding social security contributions (30 MSEK if the TSR condition, the Financial Target, and the Sustainability Target are fulfilled at 100 percent). The costs for social fees are estimated to approximately 8 MSEK, based on the assumptions above, and on the assumption of an annual share price increase of 10 percent during the Program period, as well as a social fee tax rate of 31.42 percent (14 MSEK upon fulfillment of the TSR condition, the Financial target, and the Sustainability target at 100 percent). The costs for social security contributions are
estimated to amount to approximately 8 MSEK, based on the above assumptions, and assuming an annual share price increase of 10 percent during the Program's duration and a social security tax rate of 31.42 percent (14 MSEK upon fulfillment of the TSR condition, the Financial target, and the Sustainability target at 100 percent).
The expected annual costs of 9 MSEK, including social security contributions, correspond to approximately 0.3 percent of the Holmen Group's total personnel costs for the financial year 2024 (0.4 percent upon fulfillment of the TSR condition, the Financial target, and the Sustainability target at 100 percent).
Assuming that the Cap is reached (for this purpose calculated based on the closing price of series B shares in Holmen as of February 20, 2025, i.e., 424 SEK per share) and that all Participants are entitled to the allocation of the maximum number of Performance Shares I and Performance Shares II in the Program and remain in the Program until the end of the Vesting Period, the maximum costs for Holmen under IFRS 2 will amount to 35 MSEK, and the maximum costs for social security contributions to 24 MSEK.
The allocation of repurchased Series B shares to fulfill the commitments under the Program would result in the following dilution effects (under the assumptions specified below). In the event of the maximum allocation of Performance Shares I and Performance Shares II, and provided that no recalculation takes place pursuant to section A.n above, the number of shares to be allocated free of charge under the Program amounts to 100,000 Series B shares in Holmen, which corresponds to approximately 0.06 percent of the share capital and approximately 0.02 percent of the votes (calculated based on the number of outstanding shares in Holmen as of February 20, 2025). The effects on key financial ratios and earnings per share are marginal.
The board proposes that the annual general meeting, as a primary option, decides on gratuitous transfers of treasury shares of class B to the Participants, and that gratuitous transfers of treasury shares of class B can be made to subsidiaries of Holmen to ensure Holmen's commitments to deliver class B shares to the Participants. The company currently holds 4 844 832 treasury shares of class B. The detailed terms of the board's primary option are set out in item 17.B.1 below.
In the event that the required majority for item 17.B.1 below is not achieved, the board proposes that Holmen be able to enter into share swap agreements with third parties, in accordance with item 17.B.2 below.
The proposed Program has been prepared, according to guidelines issued by Holmen's board, by Holmen's Compensation Committee, with the assistance of external advisors. The Compensation Committee has presented the work to the board, after which the board has decided to propose the adoption of the Program at the 2025 annual general meeting.
The board proposes that the annual general meeting, as a primary option, decides that transfers of Holmen's treasury shares of class B may occur under the following condition.
The board proposes that the annual general meeting, in the event that the required majority for item B.1 above cannot be achieved, decides that the financial exposure expected to result from the Program may be hedged by Holmen on market terms by entering into a share swap agreement with an external party, whereby the external party, for a fee and in its own name, may acquire and transfer class B shares in Holmen to the Participants, in accordance with the terms of the Program.
The decision to implement the Program in accordance with section A above is conditional upon the Annual General Meeting deciding either in accordance with the proposal for transfers to the Participants of treasury shares series B in accordance with section B.1 above or in accordance with the proposal to enter into share swap agreements with an external party in accordance with section B.2 above.
For a valid decision on the introduction of the Program according to item A above, a majority of more than half of the votes cast at the meeting is required. For a valid decision on the transfer of treasury shares of class B to the Participants according to item B.1 above, the decision must be supported by shareholders representing at least nine-tenths of both the votes cast and the shares represented at the meeting. For a valid decision to enter into a share swap agreement with an external party according to item B.2 above, a majority of more than half of the votes cast at the meeting is required.
In addition to what has been stated above, LTIP 2022 and LTIP 2024 are described in more detail in note 4 of Holmen's annual report for the financial year 2024.
The Board proposes that the Annual General Meeting approve the authorisation of the Board to, until the next Annual General Meeting, take decisions on the acquisition of treasury shares as follows.
The Board further proposes that it be mandated by the Annual General Meeting to make decisions up until the next Annual General Meeting to use the company's holding of treasury shares as payment in connection with the acquisition of companies or enterprises or to finance such acquisitions, in which case the shares may also be sold via Nasdaq Stockholm. The following conditions shall apply:
The purpose of the mandates for repurchases and transfers of own shares, and the reason for deviation from shareholders' preferential rights, is to give the company opportunity to use treasury shares to finance or pay for, without delay and in a flexible, cost-effective manner, acquisitions of companies or business operations and to ensure future transfers of shares under the long-term share savings programs. The purpose of the mandate to repurchase shares in the company is also to enable the Board to adjust the capital structure, thereby generating a higher value for shareholders.
Approval of the proposal requires shareholders representing a minimum of two-thirds of both votes cast and shares represented at the Annual General Meeting to support the resolution.
If a shareholder so requests, and the Board deems that it can meet the request without causing material damage to the Company, the Board and the CEO shall provide information about any circumstances that might affect the assessment of an item on the agenda and any circumstances that might affect the assessment of the Company's or its subsidiaries' financial position, or the Company's relationship with another Group company.
Accounting records, the auditor's report, and other documents that must be made available to shareholders in accordance with the Swedish Companies Act will be available at the company as well as on the company's website www.holmen.com no later than Monday, March 10, 2025. The documents will be sent to shareholders upon request and will be available at the annual general meeting.
When the notice of the Annual General Meeting was issued, Holmen AB had a total of 162,512,324 shares in issue, of which 45,246,468 Class A shares and 117,265,856 Class B shares. The A-share carries ten votes, while the B-share carries one vote. Following previous repurchases, the company holds 4,844,132 B-shares, corresponding to approximately 3 percent of all shares, which are not represented at the Annual General Meeting. The total number of votes in the company at the mentioned time thus amounts to 569,730,536 (564,886,404 excluding the company's own holdings).
For information about how personal data is processed, please visit https://www.euroclear.com/dam/ESw/Legal/Privacy-notice-bolagsstammorengelska.pdf. If you have any questions concerning our processing of personal data, please contact us via email at [email protected]. Holmen Aktiebolag (publ)'s organisation number is 556001-3301 and has its seat in Stockholm.
Stockholm, February 2025
The Board of Directors
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