Coillte Annual Report 2020

1 Coillte Annual Report 2020. Cover: Tree Bark - Coillte 's Massy's Estate, Old Military Road, Jamestown, Co. Dublin. Inside cover: Coillte 's Curraghchase Forest Park, Kilcornan, Co. Limerick. 2. Coillte Annual Report 2020. OUR. FUTURE. 3. Coillte Annual Report 2020. CONTENTS. Our Vision 6. Our Mission 7. Our Purpose 7. Our Values 7. Who We Are 8. What We Do 9. Financial Performance 10. 2020 Highlights 11. Chair's Statement 12. Chief Executive's Review 14. OUR HIGHLIGHTS. Financial 19. Forest 20. Land Solutions 22. Renewable Energy 24. MEDITE SMARTPLY 25. Coillte during Covid-19 27. OUR FORESTS. For Wood 31. For Nature 37. For Climate 43. For People 49. Diversity and Inclusion 52. OUR BOARD. Board of Directors 54. OUR FINANCIALS. Statutory Financial Statements 57. Report of the Directors 58. Statement on Internal Control 62. Governance Statement and Board Members' Report 69.

2 Independent Auditor's Report to the Members of Coillte Cuideachta Ghn omha ochta Ainmnithe 74. Group Profit and Loss Account 76. Group Statement of Other Comprehensive Income 77. Group Balance Sheet 78. Company Balance Sheet 79. Group Statement of Cash Flows 80. Company Statement of Cash Flows 81. Group Statement of Changes in Equity 82. Company Statement of Changes in Equity 83. Notes to the Financial Statements 84. Corporate Information 129. All forest images captured in this year's Report were photographed on the Coillte estate. 4. Coillte Annual Report 2020. 5. Coillte Annual Report 2020. Our Vision TO CREATE A. SUSTAINABLE FUTURE. FROM OUR FORESTS. AND LAND. 6. Coillte Annual Report 2020. Our Mission To work with nature to create enduring value from our forests and land. Our Purpose TO DELIVER THE MULTIPLE. BENEFITS FROM OUR FORESTS. AND LAND WHILE LEAVING AN.

3 ENRICHED RESOURCE FOR. THE NEXT GENERATION. Our Values EMPOWERMENT. SIMPLICITY. OUTWARD LOOKING. RESPECT. RESPONSIBLE. 7. Coillte Annual Report 2020. WHO WE ARE. Coillte IS THE CUSTODIAN OF MORE THAN 440,000 HECTARES. OF LAND, MAKING IT ireland 'S LARGEST FOREST MANAGER AND. LARGEST PROVIDER OF OUTDOOR RECREATION. IN ADDITION, Coillte DEVELOPS GREEN ENERGY PROJECTS, PRODUCES PANEL. BOARD AND DELIVERS NATURE CONSERVATION PROJECTS OF. SCALE. WE ARE FOCUSED ON DELIVERING MULTIPLE BENEFITS. FROM OUR FORESTS AND LAND. 8. Coillte Annual Report 2020. WHAT WE ARE. WE DO FINANCIALLY. SUSTAINABLE. WE PROVIDE SUSTAINABLE WE PROTECT. MATERIALS TO BUILD HOMES AND ENHANCE. AND WORKPLACES THE ENVIRONMENT. WE INVEST IN THE RURAL WE DEVELOP GREEN ENERGY. COMMUNITIES IN WHICH TO POWER HOMES AND. WE ARE ROOTED BUSINESSES. WE PROVIDE WE CLEAN. HEALTHY SPACES THE AIR. FOR US ALL TO ENJOY YOU BREATHE.

4 9. Coillte Annual Report 2020. FINANCIAL PERFORMANCE. Operating cash flow Turnover ( 'million) ( 'million). 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020. Cash/(Net Debt) EBITDA. ( 'million) ( 'million). 2016 2017 2018 2019 2020. ( ). ( ). ( ). ( ). 2016 2017 2018 2019 2020. 10. Coillte Annual Report 2020. 2020 highlights EBITDA OF 66M SUCCEEDED IN "KEEPING WOOD AND. IN VERY CHALLENGING MARKET WOOD PRODUCTS MOVING" DURING. CONDITIONS THE COVID-19 AND FORESTRY. LICENCE CRISES. VISITOR NUMBERS TO ACHIEVED RECORD REFORESTATION. FOREST SITES DOUBLED TO TRIPLED LEVELS OF OVER 9,000ha ACROSS KEY SITES PLANTING 22 MILLION TREES. COMMENCED THE DUBLIN RECEIPT OF PLANNING. MOUNTAINS MAKEOVER INITIATIVE FOR A NATIONAL VISITOR. DELIVERING FORESTS FOR PEOPLE DESTINATION AT AVONDALE. AND NATURE FOREST PARK. PLANNING APPLICATIONS SUBMITTED COMMENCEMENT OF. FOR OF RENEWABLE A C.

5 45M INVESTMENT. ENERGY PROJECTS AT SMARTPLY. 11. CHAIR'S. STATEMENT. I am pleased as Chair to present the Annual Report and Accounts for Coillte for 2020. 12. Coillte Annual Report 2020. I WOULD LIKE ON BEHALF OF THE BOARD TO COMMEND THE Coillte . TEAM ON THEIR RESPONSE TO COVID-19. THE ADAPTABILITY AND. FLEXIBILITY OF STAFF WAS KEY TO MAINTAINING OUR BUSINESS. THROUGHOUT THE YEAR. Little did we think as we approached 2020 how the commenced the innovative rehabilitation of a cutaway year would unfold. The potential impact of Brexit was bog on Bord na M na lands. We also progressed a overshadowed by Covid-19 and extreme difficulties with number of investments for the future so that we are forestry licencing. Any one of these issues in itself would well placed to develop our business in forest and wood pose enormous challenges for any organisation the processing, and to enable us to play our part in the three of them together posed unprecedented challenges achievement of national Climate Action targets.

6 Key for Coillte and the forestry sector as a whole. All of these for us is ensuring financial sustainability to achieve our issues were a critical focus for Coillte , requiring the purpose, so that the multiple benefits from forests and organisation to adapt and flex to ensure business was land for the people of ireland can be delivered while sustained for Coillte and to support our customers in leaving an enriched resource for the next generation. the forestry sector. In this context, a key milestone was reached in I'm happy to Report that there has been some early 2021 when the Competition and Consumer improvement in licencing, through the effort and Protection Commission approved the transaction for ongoing dialogue between the team in Coillte and their the establishment of the new joint venture renewable counterparts in the Department of Agriculture, Food and energy development company with the ESB.

7 We look the Marine (DAFM). The key requirement is to ensure forward to the establishment of the company in the that the improvements achieved are sustained, and first half of 2021 subject to Shareholder approvals. We outstanding areas are addressed on the basis of a robust also look forward in 2021 to the opening of our joint and fit for purpose process. I welcome the establishment venture investment in a Tricoya manufacturing facility by Minister Hackett of Project Woodland to address in Hull to expand Medite's product base, and the official this requirement, and in particular to develop a shared opening of new mountain biking trails to respond to national vision of what ireland wants from its trees ireland 's ever increasing recreational needs. All in all, and forests. we look forward to 2021 as a year of recovery, but also of continuing development in Coillte 's business and I would like on behalf of the Board to commend national contribution.

8 The Coillte team on their response to Covid-19. The adaptability and flexibility of staff was key to maintaining There were further changes in the Board in 2020, with our business throughout the year, requiring innovation the appointment of Kevin McCarthy. I would like to take and imagination so that some of the resultant challenges this opportunity to thank Kevin and my Board colleagues were addressed successfully while maximising health for their exceptional commitment and dedication to the and safety for everyone concerned. Covid-19 continues to challenging work of the Board in 2020. I would also like be with us, and we will retain our vigilance in ensuring its to thank our customers, contractors and suppliers for effects are minimised for our staff. their continued support and engagement. On behalf of the Board, I would also like to thank our Shareholders, Despite the challenges we faced, and because of the Minister for Agriculture, Food and the Marine and the team effort, Coillte delivered a solid financial the Minister for Public Expenditure and Reform, together performance for the year, albeit below our initial with their officials and advisors in NewERA, for their expectations.

9 We planted our highest number of trees strong support in a year of significant challenge. ever with 22m trees planted across 9,168 hectares of restocked forest, commenced our investment in Bernie Gray the 45m upgrade of SMARTPLY's drying plant and Chair 13. CHIEF EXECUTIVE'S. REVIEW. My first full year as CEO of Coillte proved to be an extraordinary one. During 2020, the Coillte team had to navigate immense challenges, from a once-in-a-century pandemic to the threat of a no-deal Brexit to a forestry licencing crisis which resulted in major timber supply shortages. 14. Coillte Annual Report 2020. Against this uniquely challenging backdrop, forestry and quarter of 2020 as part of tight Covid-19 restrictions. wood production have from the outset of the pandemic As a result, demand for sawlog and for wood panel been deemed essential services. Being asked to operate products declined significantly.

10 That said, demand as an essential service was, particularly in the early recovered strongly during the third and fourth quarters days, a challenge but most importantly an opportunity when construction sites were open, albeit that social for Coillte to play our part in the national and global distancing and new Covid-related safety protocols efforts needed to manage through this pandemic. Coillte decreased productivity in the building sector. colleagues, contractors and customers displayed an inspiring collective effort to keep timber moving and to Brexit uncertainty which persisted right up until year keep each other safe I am very grateful to everyone end, also contributed to a volatile operating environment, across the sector who played their part in making particularly in our core UK market. From Coillte 's this happen. perspective, MEDITE SMARTPLY panel board would have been subject to tariffs in the event of a no-deal The forestry licencing crisis was the most significant scenario and this created obvious uncertainty for challenge faced by our sector.