Klabin Sa S/Adr

Good morning and welcome to Klabin's conference call. At this time, all participants are in listen-only mode. Later, we'll have a questions and answers session and instructions will be given at that time. We kindly ask that for the benefit of time, each analyst asks a maximum of two questions. As a reminder, this conference is being recorded and the presentation will be in Portuguese with simultaneous translation into English. All participants will be able to choose which language they wish to hear by clicking on the interpretation button and the language of the presentation by clicking on Portuguese presentation screen located above. I'll make a brief announcement for those watching us in English. Any statements made during this conference call in connection with the company's business outlooks, projections, operating and financial targets, and potential growth should be understood as merely forecasts based on the company's management expectations about the company's future. These expectations are highly dependent on market conditions, on Brazil's overall economic performance, and on industry and international market behaviors, and therefore are subject to change. We have with us today Mr. Cristiano Teixeira, CEO, Gabriela Woge, CFO and IRO, and other officers from the company. Mr. Cristiano and Ms. Gabriela will start by commenting on the company's performance during the second quarter of 2026. After that, the officers will be available to answer any questions that you may wish to ask. Now I will hand it over to Mr. Cristiano. Please go ahead, sir. Thank you and welcome to our earnings call for the second quarter of 2026. I'll break from protocol and mention a name here in my presentation. For now, you'll only listen to them, but then you will meet Christian Cetera in our investor relations area. He's the new executive director for people and management. He is Argentinian We have a plant in Argentina that we're very proud of. So he is a fellow Latin American and we're very happy to have him here. He's very experienced and this is something that we need right now. He's 57. He's been in companies like GE and GM. He has over 30 years of experience. And whenever we look at our vision for the next 10 years, the biggest challenge we find is training and retaining talent. If we had to list the main challenges for the company's next 10 years or for the market, that would be among them. So we're very happy to have Cristian with us and we hope that you get to meet him through our investor relations department. So we're going to start talking about our performance for the second quarter. First, we'll give you some topics about the market and then we'll mention our perspective and return for a Q&A. The first point I'd like to raise is that this was a quarter of great operational performance. We were able to put The best management model into practice. And this is something that we don't always get results from. But for the second quarter, we were able to see that planning and the way we run the business, even despite all the hardships, and the market have led to an extraordinary performance. So I'd like to congratulate our entire group of directors for that. Fluff had extraordinary performance. In the fibers business represented here by the word pulp, but this is something I call fibers as we hear in many other places. Our long fiber fluff, which represents 12% of our total and the company in revenue. But when we look at the business's revenue, it represents 30% of our volume and 40% of the revenue. So this is a product that has been maintaining its value Leed and its premium which amounts to about 350 us dollars depending on when the snapshot was taken but this is a minimum premium and this is what we expect for other long fiber products in the near future deals continue to be closed especially in long fiber We see many closures, some of them which are definitive, some of which are temporary. Clubbing product in Latin America, which as you know is the highest yield area in the world for long fiber pinus. This has allowed us to go into new markets in which we find a price advantage for premium products. We're reinforcing what we believe in and we believe in maintaining A significant part of the volume. This is a market that represents 24 million tons. So it's a product that won't be removed from the market. It will be a long lasting product and you're always going to have added value products to get a premium on. And this is a premium I've been talking about for a long time, even before it existed. And here I'm saying that I think we will see a premium on this in the future for long fiber craft liner. And as you know, our strategy is based on this. 55% of our forestry base is long fiber. Now looking at paper. You can see our evolution in coded board. And the world is suffering from the Chinese deflation in coded board. This is of course the main item suffering from that. Thank you for watching! So we're very confident about our products, which are based on long fibers, and we're gaining market share in countries where we hadn't been gaining before. China is the main one, obviously, but we're selling more to China while China is exporting short fiber folding coated board. Klabin has become more important in this area. We're only going to make folding coated board when it makes sense in our product mix for clients who buy both fibers. But Klabin continues with its expectations. Out of our 1 million tons, we have about 200,000 tons of craft liner. So it is worth making a Kraftliner in the 28 machine, as you know. I'll speak briefly about this, but we have been seeing global increases in Kraftliner. The main one was in Europe, but all American and European manufacturers are announcing increases. Of course, this still doesn't affect us in the second quarter, but price recovery in the third quarter will be important for Kraft Liner. Now, going back quickly to coated boards, we're going to continue to produce Kraft Liner in this machine, and by improving the mix in this machine, especially with LPB, and Clamulti. We're going to continue this migration using Clamulti in China, CUK in China, in South Africa at higher volumes than before. So we continue to be very excited about this migration of added value products on machine 28. We've been seeing the results from that right now. Marcos Ivo is in Vietnam doing the transition and also visiting new opportunities in Vietnam. So we're very excited about the paper market. I spoke briefly about Kraft Liner, but we're in a special moment for it. There are also some closures in this area, but prices are starting to give us confidence So that we can use more Kraftliner. We have been exporting about 50,000 tons per month and these prices are giving us confidence that we can continue to sustain this value and support our internal demands with other papers. There are some opportunities that we have in Brazil and of course there's recyclable machines. This is a moment in which we're making use of the flexibility that I discussed for so long. That's the opportunity cost of exporting versus converting into boxes. Corrugated boxes left the standards very high, but Kraft Liner seems to be able to get some of that share, and that always adds to the company's results. Of course, we're always looking at the opportunity costs. Finally, I started speaking about packaging, but just to continue, this is a very special moment in the packaging area. We have consolidated into big accounts. We're very confident with our clients and contracts. Readjustments are always taking place based on the service level that we can offer to our clients. We have major global partners, And that feel comfortable obviously with our service level. Obviously the weight of our paper is lower than the rest of the market. So we can convert a higher area into cash. So that's something that's very good about the packaging area. So that concludes my introduction. I just like to say that any quarter that was operationally strong with things under control in the market We've been able to gain market share in products by standing out with long fibers, and we have very good expectations for the future. But I'll refer back to this at the end. Let's continue with Gabi. Thank you, Cristiano. Good morning, everyone, and thank you for joining our conference call. On page 4, I present the quarter's results, which reflected the operational stability of our plants and the continued ramp-up of machine 28. Quarterly sales volumes reached 1.18 million metric tons, virtually in line with the second quarter of 25. Net revenue for the quarter reached 5.2 billion reais, also in line with the second quarter of 2025, reflecting primarily the increase in pulp prices in dollars and packaging prices in the domestic market, combined with growth in paper and packaging volumes, which partially offset the effect of the real's appreciation against the dollar. In this context EBITDA for the quarter was 2 billion Reais with a stable margin of around 38% resulting from business performance and cost discipline since cost reduction initiatives have supported these results even amid inflationary pressures on inputs and preparations for El Nino. Turning to page five the total cash cost per A metric ton in the second quarter of 2026 was 3,204 reais, unchanged from the same period last year. This performance reflects cost reduction initiatives, particularly from those targeting variable costs implemented during the quarter. These measures offset the increase in input and shipping prices, resulting from ongoing geopolitical conflicts, as well as the rise in fiber costs. Moving on to slide 6, Klabin ended the second quarter of 26 with a net debt of 24 billion Reais and a leverage measured by the net debt to adjusted EBITDA ratio in dollars of 3.2 times, a reduction of 0.7 times compared to the second quarter of 2025. The company remains focused on its disciplined path of reducing leverage, confirming the consistent execution of its strategy and its stronger capital structure. Moving on to the next page, the company's liquidity remains robust ending the quarter at 12.7 billion Reais. This liquidity consists of 10.1 billion Reais in cash with the remainder in an undrawn revolving credit line. The average debt maturity at the end of the quarter was 84 months and the average cost in dollars was 5.1% a year, a decrease of 0.3 percentage points compared to June 2025. This reflects the company's debt management initiatives implemented over the past few months. Moving on to page 8, we have the company's free cash flow. Over the last 12 months, the company generated 700 million Reais in cash flow. Moving on to slide 9, distributions to shareholders over the past 12 months totaled 1.18 billion Reais. This amount represents a dividend yield of 5.3%. I would also like to highlight the advanced dividend declaration approved last year in light of the transitional rules provided for in the legislation to the amount of 1.112 billion Reais with the next payment, the third installment scheduled for August 19 to the amount of 278 million Reais. Also in the second quarter, we announced the share buyback program, a sign of the company's confidence in its fundamentals. To date, we have executed 13% of the planned volume, which represents around 70 million Reais. These initiatives reinforce the company's commitment to creating value for its shareholders. Finally, the company continues to benefit from its unique portfolio structure, which provides operational flexibility and helps mitigate the volatility of its results. I will now turn the floor back to Cristiano, who will present the business trends for the company. Thank you, Gabi. As a reminder, we have Nicolini here and Douglas. Both of them are available to answer your questions. Marcos and Soares are not with us, so I'm going to answer questions on coated boards and craft liner. So here we have some trends for the third quarter. We see some challenges for short fiber. Obviously, China is the big issue here, even on the short term. We don't see much space for significant reductions. We might see a slight downward trend but we expect it to recover to the levels we're seeing today. And this is due to the challenges that major operators and pulp manufacturers are facing to sustain these price levels. So it's very hard to operate at the current prices and we don't see many possibilities for price increases in short fiber. The more long fibers react, the more this spread widens and this opens some space for short fibers. So this is the challenge that we have. We can see this in the last needle when it comes to price. For fluff, it's a positive moment. The fibers that China has been using, The available long fiber in China has been consumed and hasn't been replanted. So we expect it to run out in the third or fourth quarter. But it's evident that clients in China operating with high-end products, especially the ones that make OEMs for major brands, They have trouble using recycled fibers that are used in China. China has been switching to long fiber fluff from countries that produce it like us. And since we're seeing a threat on the short and long-term and short fibers, In fluff, we don't see any threats on the short or the long terms. The pinus grown in China is not proper. It doesn't have a proper production area. And even if they are able to work with pinus in some specific areas, their yields are very low, as we see in other regions of the world, low in comparison to ours. There's a lot to be learned in forest management and also understanding what varieties to plant, the productivity and yield from these trees. The more we look into the market and I think every pulp manufacturer looked at China in the last few years. But we're very confident in long fibers, especially because China is not a threat on the short, medium, or long terms in this area. When it comes to eucalyptus, they are, but this is still limited. We often hear about the six millions of hectares planted in China. They can gain productivity in this area. So on average, they are cutting down about 15 EMA on average, So we expect that their yields will go up unless they cut them down earlier. This is something that they do sometimes, but their email will be higher than the current one. How far can that go? From our perspective, it wouldn't go over We are steadfast in our belief in our business even with short fibers but for now since their productivity will improve And even though the planted area in China is not increasing, we expect the same area to increase its yield to 2025 in IMA. And we have a specialist here who can talk about this to you. This is a part of our strategic vision. We're very confident about long fibers and we have a lot of data to share that shows why we're so confident. So the company's strategic choice many years ago is now being confirmed. And in short fibers, a threat that exists but it will still take some years and their planted area is growing only slightly. And as you know, 70% of the wood chips imported to China comes from Vietnam and Vietnam is also very limited in its exports. So even in short fibers, Latin America and specifically Brazil will remain a global powerhouse. Sorry for taking so long on pulp. I just wanted to delve into this after so many years studying this area. And again, if you're interested, Garlon can explain more. When it comes to coated board, we also see a positive moment in price and volume. Craft liner is also very positive. have been paying attention to how far this can go. Of course, this is not only about demand, but also there are closures. And we're very excited about the current moment for Kraft Liner. Looking at this statistically in other periods, Pulp and Paper had similar curves despite being in different markets but normally there was some similarity but now things are different. Craftliner is at a very special moment in prices as well and obviously there are limitations due to the closures. And price announcements from the global players will definitely confirm this narrative that we're bringing to you about how prices will react even more in the third quarter. Corrugated boxes remain positive. We've benefited from the season, the current season, the seasonal pattern, and we're seeing the performance, which has been very good, 4% year on year. And we're still performing well due to the product mix and the seasonal pattern that we see in packaging materials here in Brazil. So that's it about the markets. I'm sorry for taking so long. I wanted to talk about the strategic perspective, but I think we can continue with questions and answers. Thank you. Ladies and gentlemen, we will now begin the questions and answer session. For the sake of time, we would like to request you to ask one question per analyst. If you'd like to ask a question, please click on the raise hand button. If you would like to remove yourself from the queue, click on the lower hand button. The first question will be asked by Rafael Barcelos from Bradesco BI. Go ahead. Good morning. Congratulations on your results. My question is about costs. This is something that has been debated among investors. The company has posted a better than expected result in costs, especially in paper and packaging. If you can tell us a bit more about how sustainable this is for the next quarters, if you can tell us The fuel line drew our attention. I think it's natural according to what we see in the macroeconomic scenarios, but I'd just like to understand if This line will be reduced in the next quarters and what you expect from fuel costs and how it will affect your pulp costs. I know that there is a lag from these costs. And Cristiano, if you can give us a general panorama about the company's cost trajectory. We still have El Niño ahead of us, so what potential impacts do you believe can happen from that? My second question is for Nico. First of all, congratulations on your results. You've been making a commercial effort and the prices have been very good. So I'd just like to understand how sustainable that is. The gap versus the benchmark and the prices being used by other players. Do you believe the company will continue to deliver on these price levels in the future? And if you can give us a general view of the cycle. We've been seeing prices going down in short fibers. So has the demand improved? For August, do you see any signs of price stability in short fibers and in long fibers? It's a more dramatic scenario, so I'd like to understand that as well. Thank you. Thank you, Raphael. So I'll comment on what you mentioned. Gabi will talk about costs and Nico will talk about the markets. First, when it comes to costs, we're at a very confident moment about what we implemented in the last years. So I'm going to take up some time here and you can complain afterwards if I go on for too long. But in the last few years in the company, we invested about 30 billion reais. And all of our plants are at a unique position. Our equipment is at great conditions. We're about to do a startup which has been going very well to recover our Monchalegre boiler. This is a plant and a site that for the last few years has been made much simpler and more objective. So when it comes to costs from the industrial perspective, so efficiency, which is marginal, but it is important in this context. It's not only about the cost. There's an indirect side because when you have a plant that has a better performance but also a higher equipment availability, this availability becomes volume and this reduces the fixed cost. So we did that very well. This cycle is being concluded now with this boiler. For the next five years, we don't expect any significant investments in the company. Like I mentioned, we're going to generate free cash flow for the next years. We're basically turning this curve. So for the next quarters, you're going to see a significant free cash flow generation in the company. I've been saying this frequently. and you'll see it happen soon. But when it comes to costs, I just wanted to leave the most important part for the end. I'd like to remind you that we purchased Arias from Arauc. This is a company that we respect, especially the forests that we got from them. They have the same level of productivity as ours. They're neighbors in Monchalegre. It was hard to manage in cash consumption, but we knew the strategic importance of this asset. Why am I mentioning this? This purchase is going to mature probably in 2029, in our experience. I'm referring here to the forestry plan and even considering El Niño, which I'll discuss, considering Our current activity, the way in which we harvest and manage these areas. What am I referring here to as the maturity? Our average radius will go down. We've been saying this for 10 years. We purchased areas close to Klabin And apologies for repeating this, but we purchased wood that was far away from our plants. Even with Araucos, a part of this benefit was passed through the cost, but as we start harvesting from areas that are more distant, as we start having a A higher average radius. When that happens, understanding the importance of fiber in the company's cash cost, we're going to reach the optimal cash cost level, in my opinion. Until then, what I can say is that the company is managing its assets. Our assets have very good quality. The people who do day-to-day work, this is all represented in our costs and threats are especially chemical products and fuel. Fuel is connected to the reduced distance that I mentioned. We're also testing other vehicles, even heavy duty vehicles, with other solutions like natural gas, biodiesel, and even electric vehicles. So the industry won't depend on diesel in the future. And on the medium term, we will reduce this reliance due to the reduction in average distances. On the short term, what I can say is, The variable cost will affect our price and margins will be maintained. Thank you Cristiano. I'd like to add to what Cristiano mentioned. This quarter we've faced significant logistics issues which are due to the geopolitical conflicts around the world. We also have the effects of El Nino and our preparations for it. These are outside factors that the company had to deal with in its cost basis. So I'd just like to underscore again that we are directing the company's guidance to the total cash cost. In order not to go into each business because the way we manage this is by trying to offset these factors internally, the factors that affected our costs. And we used some of them as we've been saying for some time through variable cost reduction initiatives, which have in some ways offset the inflationary pressures on the price. But in pulp prices, we saw that BPF oil went up. This is a oil byproduct, and that had an impact to its price due to the conflict. But this was not so significant in our total cash cost. Among our initiatives, we had a significant one for papers, which was negotiating a relevant contract that impacted this segment. So if we put all of this in the same account, the company was very diligent in holding back the inflation impacts, and we are committed to continuing this in the future. Gabi reminded me of a very important point that I'd like to mention to you. Obviously, I mentioned vehicles. That's our reliance on diesel. She mentioned BPF. which is another one. And I'd also like to remind you that on the long term, we won't need BPF either. We have a wood gasification technology. We have some equipment running in the Urtiguera plant which replaced BPF oil in our process. So this last frontier in the plant for a Fuel oil will be eliminated as this technology advances. I'm talking here about wood gasification. Hi, Rafael. Thank you for your question and comments. This was a strong quarter, the second quarter, when it comes to price recovery in short fibers, but this is still short in our yearly comparison. The fluff market, as you've been seeing, has been more resilient. And this will continue in the next quarter. So looking at the third quarter, of course, this area will have The China Factor Affecting It This is a market that has been operating for a few years with challenges, so we're always a bit more cautious trying to advance what's happening in the market, looking at prices, inventories, and supply and demand. When it comes to fibers in general, in short, fibers, the demand in China is still low. We've been seeing since May a reduced demand from China. After two price corrections in June and July, we saw that the market bounced back. So volumes and fiber consumption improved. This will remain low, especially in the downstream. So demand in general will remain stable. We don't see any critical situations for affecting fiber consumption in mature markets in Brazil or Latin America. We expect to have normal sales volumes for the third quarter with no impacts from this and obviously we're going to keep an eye on how prices change as the quarter goes. Any changes to the prices we believe will be limited since prices are already very low and this is pressuring high cost manufacturers as Cristiano mentioned when it comes to long fiber there was a capacity reduction and it was 1.2 million in capacity that was closed in the first half of the year with an additional temporary downtime This has a significant impact on the supply side and this will balance the market. This might not be felt yet in the third quarter, but we expect it to be perceived starting in the fourth quarter of 2026. So to speak about the fluff market, the market remains strong. We expect consistent demand with volumes among the normal levels that we've been reporting. with the same price captures that were announced in the previous quarter and we expect one more consistent quarter of this segment's performance. Thank you. Ladies and gentlemen, we would like to reinforce that due to the available time, we would request you to ask a single question. The next question will be asked by Rodolfo Angeli from JP Morgan. Go ahead. Good morning. I was prepared to ask two questions. So I'll ask only one. I'll try to keep it short in my answers. Okay, so my first question is about capital allocation and your strategy for the future. You mentioned that you had an expectation for free cash flow generation increases in the next years. So what should we consider for the next projects? Is this starting to figure into your strategic planning? Is there anything that you can share with us? Finally, I'd like to ask you to give us some more details on MP28's mix and how Kraft has performed versus a coded board. Thank you. And Rodolfo, I apologize. I'm the one who's been speaking for too long. We don't expect major investments at Clubbing for the next five years, except for marginal ones, which we will obviously discuss with you. We're not going to make any proposals to the board. We have no expectations about that, which doesn't mean that the company doesn't have a 10-year vision. We remain confident about our short fibers in Santa Catarina, but we don't have any expectations of bringing this to the board in the next five years. So this is what we expect in our free cash flow generation. This is the company's absolute focus. You saw our share buyback strategy and this is the path for us to reduce our net debt and buy back shares through free cash flow generation. Operational cash flow as measured by EBITDA depends on prices, but I'm saying this without basing myself in price increases. This is going to happen regardless of the price curve from now on. Thank you. The next question. We'll be asked by Gabriel Barra from Citi. Go ahead, sir. Hi, everyone. Thank you. I'll stick to one question so that everyone gets a chance You mentioned 1.5 to a cash generation for 2027 as something that can be reached by the company. You're saying that the leverage is within the range you expect for the company and that you might not have so much pressure to deleverage. So what should we expect from this buyback pace? Gabriel, I'm sorry to interrupt. I apologize, but we can't hear your question. So I'll let Gabi answer your question about share buyback and free cash flow. And then we'll continue with the next question. Hi, Gabriel. Good morning. So going back to the company's deleveraging process, I'd just like to underscore that we always talk about this information referring to the future, but this is something that has already happened to a major extent. In the last 12 months, we were close to the top range of our policy, 3.9, and we brought this consistently to the middle of our policy. This doesn't mean that we won't have more in the future. Obviously, we're trying to deleverage. This is a natural movement that Cristiano mentioned of things that have been done in the company which will be reflected in our cash flow generation. So this is something that we expect, but We brought the company to a very comfortable level in managing our debt. We have a long maturity, we don't have any relevant short-term maturities, so it will be faster or slower according to the market, but we've had financial discipline to place the company on this trajectory. So in this context, like Cristiano said, we also announced this quarter the share buyback program. And we have trust in the company's fundamentals. We're convinced that we will have good periods ahead of us. Since we're not expecting to make significant investments like Cristiano said, returns to shareholders will be an important alternative in the future. Does that mean that we're going to stop paying our debt? No, we're always looking at the opportunities that we have in the company And as cash generation becomes more intensive in the future, this will be an important alternative. But of course, this will depend on the performance of the share. One last point, Gabriel. Referring to Rodolfo's previous question as well, now clubbing has 4.4 million tons and I don't know any other company with a portfolio like ours so I'm very excited I'm sitting on some facts that you can look at the products that we're offering to the market And I always talk about long fibers. So considering our portfolio, I said to Rodolfo that we're not going to invest in any transformational capacity for the next years. This doesn't mean that clubbing in the future, in the same five years, will not be Our peers that have long fibers, LPB and prime products, these companies are reducing their capacity. So clubbing in five years, even without any investments, will be globally stronger than it is right now. And then in five years with the different geopolitical situation and so on, we can think about greater transformations. The next question will be asked by Leonardo Correa from BTG Patrol. Go ahead. Hi, everyone. Can you hear me? Yes. Good morning. So I have a couple of quick questions. If you can answer this in a minute or less, that will give others the chance to ask as well. I wasn't even going to ask this question, but I've been hearing from you that buyback has been your focus. We seem to be hearing this more frequently than in the past. Recently, you changed your buyback policy to 15% of your income. So is it on the table to have a new change in your policy to open up some more space for buybacks? That's my first question. And secondly, talking quickly about coded boards, your outlook is that you will have an improvement in the next quarter. And is there still a scenario of trade down? I know that you've been seeing this in the last quarters. So those are my questions. Thank you. I'll try to be brief. So again, we're paying at the middle of a policy. So 15 in cash generation, we can pay 10. So we do have some space in our current policy. Just as we can pay more, this will depend on the board's decision in the next years. From our perspective, this payment of 15 is at the right level and we've been better in buybacks because in previous periods we We always presented significant investments with four or more points above on lock. This happened to all of them, including Figuera, and we were very successful. We're very proud to talk about Figuera. We spent two years selling and transferring paper to our area. So I think you understand this very well. So now we don't have anything four or five points above the lock to present to you. We won't do that. So buyback is definitely a return. Our capital allocation strategy from my perspective, from our peers and from the board's perspective was very precise in the last few years. And now we're being very precise about our buyback. And that's why we're talking about it because in the past it wasn't worth it. And your next question was about coded board. So yes, out of the 1 million tons that we're producing now, we have 700,000 of LPB, which is for milk, and we're exporting this to all LPB manufacturers in the world. We're very close to beer. In Latin America, we have 70,000 tons of CUK. So we're very confident. Of course, there's a variation, as you noticed. We saw Heineken and others saying that the beer consumption went down after the World Cup. We had peaks as inventory was built up for the World Cup. And it seems to have bounced down to the regular levels. So this is the minimum that we expect for us Encoded Board. So we're confident about milk and beer. If you look at beauty and cleaning, this grew significantly in the last months. And this also represented a significant volume for us. And there are other products that I can mention here as well. So we're saying that we will continue to readjust the price for premium products. And our strategy is not to work with folding, which is a more commodity type of coated board that competes with Chinese imports. So we do manufacture it for clients who want it, but our focus is always for premium products, meaning long fiber. Great, thank you. The next question will be asked by Danielle Sasson from Itaú BBA. Go ahead. Hi, everyone. I'll be brief as well. My question is about pulp. So if Nico can tell me a bit, we've seen that Pulp prices have changed in the last quarter. So if you can tell us a little bit why your performance has been so good and if that's sustainable for the future. So do you believe that the recent reduction in price in the short term has been enough to bring buyers back to the table? was this enough for you to see an increase in your order book which might have been weaker at the end of the quarter but in any case congratulations on the prices that you were able to achieve thank you thank you for your question and your comments So I don't think it will come as news because we've always been saying about how we're not exposed to the Chinese market or we're not very exposed to the Chinese market but we've always given preference to contracted volumes and mature markets where we have competitive logistics despite having some competitive prices to China as well. But we always prefer the tissue market, which is resilient. We've been increasing our exposure there. Graphic papers and segments in which we can capture from our fiber basket. So clients who buy not only short fibers, but long fibers and fluff. This all maximizes our prices and margins. We try to get ahead of the market whenever we can. Obviously, we are not as exposed. This helps us with flexibility and moving values among regions, but the same strategy is seen in other players. So we try to get ahead of them as much as we can to maximize these results. And this will continue because of course we want to prioritize our revenue. Thank you, Nico. And this recent drop, was it enough to turn buyers back on or has it still been difficult to close deals at these lower levels? Sorry, I forgot to answer that question. But yes, we do see that despite our smaller share of the market in China, this price correction that we saw in the last months is triggering a higher fiber consumption. We didn't see any difference in Europe or in other markets. We still expect volumes to be normal. What we're looking at now is that we expect the market to remain stable after September after all this price or excuse me cost pressures with high cost makers. Thank you. Thank you, everyone. We'll see you during the next call. This concludes Clubbing's conference call. Thank you and have a good day.