Upm Kymmene Corp

Hi, everyone. Welcome to UPM Quarter 2, 2026 Results Webcast. I'm Massimo Reynaudo. I'm the CEO of UPM. Here with me is Tapio Corpeinen, the CFO. Well, in the second quarter this year, we reached two important milestones in our transformation. First, we sign the definitive agreement with SAPI to create the graphic paper joint venture and we secure financing for it. Second, we advance the separation of the plywood business into the future visa group. Following these steps, UPM is becoming an increasingly focused advanced materials and decarbonization solution company with stronger growth prospects and improved earnings quality. Next, looking at the quarter to business performance, all our businesses improved their results from last year. Most also outperformed the previous quarter. Increased volumes, disciplined margin management, and continued efficiency improvements supported our profitability in a business environment that turned inflationary. Our quarter to sales grew slightly, and our comparable EBIT from continuing operations increased 71% year-on-year, reaching $212 million, or 9% of sales. I am here referring to continued operations because the UPM plywood business is now presented as discontinued operations in our reporting. Including plywood, UPM's total EBIT was 230 million euros. Now, let's take a look at the businesses in some more detail. And let's start with decarbonization solutions with another stronger quarter for this segment. If we start with energy, the business improved its results from last year. You may recall that commenting the strong quarter one performance back in April, we talked about seasonal and structural factors. When it comes to the seasonal factors, quarter two followed the normal seasonality, which means lower electricity consumption compared to quarter one, which is the winter period. However, on the other side, here comes the structural element. The electricity consumption beyond seasonality in Finland keeps on growing. It has grown by 5% over the last 12 months. This is a structural growth element which is expected to continue in the coming months and years driven by the electrification of the economy, The installation of new data centers, which is now happening at scale, and the installation of green industries, which represent more of a future prospect at this point in time. Beyond the quarterly dynamics, the effect of this structural increase is well visible in the performance in the first half of 2026, being well above the performance of the corresponding period last year. In a market where demand is expected to grow faster than production, we are in a unique position to generate value. The new large-scale consumers need free things to happen at pace. Locations where to install data centers or other industrial projects, grid connections to feed them with energy, and reliable baseload CO2-free energy. When it comes to the locations and grid connections, we have prepared a portfolio of suitable industrial sites with existing or close-by connections. This is important as site readiness speeds up permitting and construction. As for energy supply, well, we can offer 12 TWh of clean baseload power through PPAs. If market conditions made it relevant and financially attractive, we could also add additional renewable power, as we have developed a pipeline of potential wind and solar power for an extra generation up to 1 gigawatt, ready to be built earliest 2027. Now, if we look at the next generation renewables, we have there two businesses, and when it comes to biofuels, the business recorded strong results that we are making visible in the slide here in this mid-year update. The results were supported by good demand and healthy biopremiums for advanced renewable fuels. Sales prices were further supported by higher fossil fuel reference prices during the disruptions in the Middle East crisis. The business achieved an EBIT margin of 35% in this first half of 2026. On the biochemical side, the ramp-up of our biorefinery in Leuna in Germany continues. Customer deliveries of industrial sugars reached substantial volumes and deliveries of renewable functional fillers and other lignin derivatives are expected to start during quarter three. With these things progressing, we have now locked the date for the official site inauguration, which is October 15, and we will be happy to invite you to visit the site, but we'll communicate more about this later on. Let's move now to advanced materials. In this segment, both the adhesive material and specialty material businesses achieved robust mid-single-digit sales growth and double-digit EBIT margins in Q2. The underlying markets continue to grow in Europe and in Asia with some further support from stock buying during the uncertainty triggered by the Middle East conflict. On the other hand, the North American market remained rather soft. This performance has been supported by strong commercial focus, development in higher margin categories or higher growth geographies, and continued actions to sharpen competitiveness. More in detail, Adhesive Materials has been and is investing to accelerate its growth in the U.S. and build stronger positions in higher growth regions in Asia. Specialty materials? Well, their main focus at the moment is on barrier papers, which is a high-growth segment in the market. It is about papers with barrier treatments that enable the replacement of plastic or multi-layer product in consumer applications like, for example, food or pharma. Let's turn the page and moving on to fibres. Well, if we start with Fibre South, or our world-class pulp platform in Uruguay, it has continued to improve its efficiency and performance for several quarters in a row now. In quarter two, this helped to offset the increases in logistic and other costs and expand profits and margins. The profitability was also supported by a moderate increase in hardwood pulp prices. During the quarter, Fiber South reported a comparable EBIT of 101 million euros, or 24% of sales. On the other hand, the Fiber North platform in Finland, well, for it, the business environment remained challenging. Even though pulpwood prices have decreased, profitability remains low. Fibers North reported a comparable EBIT loss of 10 million euros in the quarter. Performance being impacted also by the maintenance shutdown in the Pietarsari mill. In the current challenging market conditions, in order to protect the profitability of the business, we're planning temporary shutdowns at the Caucus Mill and potentially at the Pietra Sari Mill, so to optimize production and wood sourcing. Next, talking about communication paper, well, the business delivered relatively solid results during the quarter. As everybody knows, the business is characterized or this market is characterized by a structural demand decline. However, during the first part of the year, the decline has been moderate compared to previous periods. We are talking about a minus 3% in Europe year on year and about a flat in the U.S. in the categories relevant to us. In an inflationary environment, the business focused on disciplined margin protection and the quarter ended with a comparable EBIT of 32 million euros or 5% of sales. Blywood continued to perform well and its results improved from last year, proving the solidity of the strategy and the effectiveness of its execution. The comparable EBIT during the quarter was 16 million euros or a 14% margin, 13% of sales. Due to the demerger process, this is not part of continuing operations reported today. Talking specifically about this business, about the plywood business, three months ago we announced the demerger plan to separate UPM Plywood into a new independent listed company named Visa Group. The plan is to lease the new company on the Nasdaq Helsinki in early November. During the quarter we have made progress with the plan and now the demerger and listing prospectus is available on our website for consultation. In this slide you can see the financial targets of Visa Group. These targets underline the ambition of the new company to grow between now and 2030, supported by the proved ability to deliver robust and resilient profits, Together with the ambition to maintain a strong financial discipline and the confidence to be able to pay good dividends. The extraordinary general meeting to decide on the demerger plan will be held on August 31st. We believe this operation will create a long-term value for the UPM shareholders. As an independent company on one side, Visa Group will be able to pursue its own strategic priorities and growth opportunities with increased focus and the required agility. At the same time, this simplifies the UPM business portfolio and increases its focus on growing segments. But when it comes to the other significant transformational initiatives about communication papers, well, preparations continue at full speed for the planned graphic paper joint venture there. In quarter two, as said earlier, we made another significant step ahead as we signed the definitive agreement for the joint venture with SAPI and we secured financing for the new graphic paper company. As a reminder, we are planning an independent graphic paper company out of 50-50 between UPM and SAPI. which would include all of UPM communication paper business and SAPIS graphic paper business in Europe. The transaction would create a more efficient, adaptable and sustainable graphic paper business. It would create a structurally competitive cost base and supply security for European and global customers. For UPM, the transaction would have a positive impact on profit margins and the balance sheet. UPM would no longer have direct sales exposure to the declining graphic paper markets in Europe or in North America. The transaction, as a reminder, is subject to merger control approval by the European Commission and authorities in other jurisdictions. The work in this area continues to, and we expect the final resolutions by the end of this year. Now, if we broaden the focus beyond quarter two and to where we are going as a company, with these portfolio changes implemented, we also change the profile of the company, increasing its growth potential and margins. As already illustrated in other occasions, and it is visible in the charts on the right, the growth on this new perimeter is not just a future ambition. The business that will belong to the new UPM has shown a strong track record of realized growth above GDP during the last years already. We aim to accelerate. Thank you very much. In this visual you have on the slide, you can see the profit generation between decarbonization solutions, advanced materials, and renewable fibers. The base year is the first semester of 2026, and you can see that it is already quite balanced. Now, in it, If we look specifically to the decarbonization solution segment, the profit generation represented here is impacted by the negative contribution of the ramp up of biochemicals. So this means, in reverse, that as soon as that negative will turn into a positive, the share of decarbonization solutions generated profits will be even larger. And so it will be the ones of advanced materials because of the continued growth in this segment. In other terms, if we project this view in the future, we will have a portfolio made of decarbonization solutions, energy, biofuels, biochemicals, with significant growth potential. Advanced materials, which is adhesive and specialty materials, with good growth, good margins, and low capex needs. and Renewable Fibers that is one of the most efficient cash engines in the whole industry already today. Growing each of these three parts with their different profiles and potentials will ensure good returns and balanced performance across all economic cycles. But now I'll pose and hand it over to Tapio for more comments on the results.

Thank you, Massimo. And here before going into the numbers, I'd like to come back to the point that Due to the demerger plan in this second quarter report, UPM plywood is presented as discontinued operations. So in other words, this means that the continued operations of UPM here are presented as if plywood was already separated from UPM. This also means that the Discontinued operations that is presented here it is sort of the residual of that sort of calculation of what UPM would look like without plywood. This means that there are some notable differences if you look at then the reported figures for plywood as a segment for instance the sales line is significantly less for the discontinued operations here as compared to the reported sales line for plywood as a segment. So the point here is that the first of all financial information here presented as Discontinued Operations is not a representative presentation of the historical or future profitability of UPM Plywood as a standalone business. For information related to Visa Group where we have The demerger plan and a prospectus approved in public domain. So for that information, I would say please look at the figures in the prospectus. Then the other point which Massimo has referred to as well here already is that most commentary that we are now giving here is regarding UPM's continued operations, meaning plywood not included. That also then is the case for Our guidance for the second half so for the first half we had the guidance 325 to 525 and we landed to the upper end of that range at 504 that was given for UPM as a whole and now for the second half of the year as said This is given for continuing operation without plywood. So when you are sort of comparing to your own earlier estimates or guidance or sort of expectations earlier in the consensus estimates for the quarter and therefore second half, please take that into account. But then if we Let's go into the figures. So as Massimo already mentioned, our sales from continuing operations then grew slightly to 2.355 billion and the comparable EBIT increased by 71% to 212 million euros. EBIT margin increased from 5.3% to 9%. Then here on the left hand side you can see the second quarter EBIT compared to the last year's second quarter year on year. And here you can see that variable costs have decreased in most businesses compared to the second quarter last year. Impact of sales prices on the group level were neutral. Prices increased in energy and biofuels. In other businesses there was slight decline on this year-on-year comparison. Delivery volumes increased and fixed costs down by 23 million euros. Exchange rate changes were slightly negative in terms of impact to the EBIT. And then finally the fair value change of forest assets was negative 24 million in the second quarter, 26, which is a 30 million negative difference compared to last year. And then on the right hand side, the comparison to first quarter this year sequentially. And you can see that the variable costs started to increase. So we saw some turn to inflationary environment on the cost side. Wood costs were still coming down, but many other costs increased, for example, logistics costs. We were also able to increase prices in most businesses, however. Delivery volumes were slightly lower than in the first quarter and fixed cost increased by 46 million. This is partly seasonal by nature, but then also impacted by the higher maintenance activity in the quarter. We had the Pietarsaari maintenance shutdown, for instance, in this quarter. In Q2 we also had the Olkiloto 1 and 2 nuclear power plant units in the annual maintenance shutdown. And the overall maintenance impact of this on EBIT was in round figures 55 million euros. Finally, the fair value change of forest assets, again, minus 24 million in the second quarter. That is a 28 million negative difference to the first quarter. And then this slide shows you our cash flow in the first half of the year. And many... and many differences there that are sort of circled in this slide. First of all, temporarily impacted by increase in working capital, also by cash payments or the cash effect of restructurings made last year where the provision was made last year in the P&L, and then items affecting comparability, such as this one-off type effects or items related to the transformational projects. So starting from the working capital and looking at this first half figures, we tied up 339 million of working capital In the first half, partly seasonal like we have discussed earlier, but also the basic point is that as our activity increased, our sales was up by 7% or 335 million euros in the first half of this year sequentially compared to the second half of last year. This obviously then had an impact on particularly receivables inventories as well. This means, looking at it the other way around, that we have been able to improve and maintain our working capital efficiency. Obviously, our working to continue get more efficient on working capital, but again, the sort of working capital turns did not change as we had this increase in the top line. But The target is to release cash from working capital during the second half of the year. But then, as mentioned last year, we made significant restructuring actions, particularly in communication papers, but other parts of UPM as well. Restructuring costs were booked as provisions. In last year's result and now then you see the cash impact on this utilized provisions line. And then we also had as said several one-off type costs related to the portfolio transformational projects that we have ongoing and these impacts obviously also one of type temporary items. On the positive side, EBITDA has increased by 93 million compared to last year or by 14 percent. Investing cash outflow 191 million smaller than last year as expected and indicated as we have discussed this capex profile before and you may remember that our guidance for the full year 2026 capex is around 300 million euros. So then how this shows up in our balance sheet as a result of temporary cash flow, but then also including the first payment, first installment of the dividend, 396 million paid out during the quarter, the net debt increased in the second quarter. but we do expect then to work our way down in terms of the net debt during the second half of the year. Then here we have the outlook and profit guidance for the second half of the year. As mentioned earlier, once again the profit guidance is given for the continuing operations excluding plywood. On that basis, we expect our comparable EBIT in the second half to be in the range of 375 million to 575 million euros. On the same basis, the comparison figures In the first half of 2026 were 471 million euros and 479 million euros in the second half of 2022. Now, in the second half of this year compared to the first half of 2026 sequentially, we expect moderately higher sales prices and moderately higher variable costs as well. As usual, communication papers will book the energy refunds in the fourth quarter Also in the second half we will have more maintenance activity. Olkiloto 3 maintenance shutdown and Paso de los Toros maintenance shutdowns are both now in the second half of the year both facilities on a 18-month cycle and this sequential impact compared to the first half of this year coming from the maintenance higher maintenance is around 40 million euros. And then as activity increases further in Loina, we expect to incur somewhat more operating expenses ahead of the sales ramp up, so some headwind on the EBIT there. In the second half of 2026 compared to last year, 2025 second half, we expect higher sales prices and moderately higher variable cost. Then our last year comparable EBIT in the second half included 131 million euro of forest value gains and this year we expect an evaluation impacts to be significantly smaller We know the trajectory of wood cost now is different in Finland and has been during the past nine months than what we saw during last year. Also, we have seen some increase in discount rates, so therefore One can say that the difference in the impact of the forest value change can be up to a three-digit figure. Also in the comparison to the second half of 2025, maintenance activity is expected to increase and that is actually similar around 40 million difference in comparison in maintenance impact to last year's numbers. Energy refunds booked in communication papers in the fourth quarter are expected to be somewhat smaller than last year. around 40 million less impact than last year and then finally in Loina we expect costs to increase year on year as activity is higher. So that is about the outlook and now I'll hand it over back to Massimo for some summary notes.

Thank you Tapio and right in the spirit of a summary I just want to recap The key elements covered during this call. We had a positive quarter two with improved results in all businesses and significant progresses in our transformational projects. From an operational standpoint, going ahead, our focus will remain on fostering performance, margin protection, and as Tapio has underlined, cash flow. From a strategic standpoint, the focus will be on progressing on our transformative initiatives. If so approved by the EGM in August, at our next quarterly call, we will be a few days away from the listing of Visa Group, which is planned for the beginning of November. And that will complete the strategic review we have initiated about one year ago. At the same time, we will be closer to the end of the year. That is where we expect the completion of the merger control activities related to the joint venture with SAPI. In other terms, we are getting closer to the point in time where the new UPM I described earlier will become a full reality. But we will have some more time to talk about these later. For the moment, this concludes the presentation, and let's open up to questions.

The next question comes from Ioannis Masvoulis from Morgan Stanley. Please go ahead.

Hello, thank you very much for the presentation. Two questions from my side. Loina. One point to clarify, do you expect a big ramp-up cost to occur in the second half of 2026? And beyond that, we should see a moderation. And related to that, could you talk about the timing of reaching positive EBITDA at the asset? And I'll stop here for the first question.

I'll pick your second question. I'll leave Tapio to comment on the cost ramp-up in the second part of 2026. I would say there we are proceeding more or less in line with our schedule, and that is in line or at the base of what we have communicated earlier on. and that points toward reaching production capacity and therefore breakeven in 2027. So no big change or nothing more to add from that standpoint. And then I leave the other part to Tapio.

Yes, so Johannes, on the first part of your question, well, can sort of refer to the third page third slide of the presentation where we have the kind of trajectory on the biochemicals impact on EBIT and as we state in context of outlook also sequentially second half this year to first half we then are guiding for some additional Headwind negative difference on EBIT level for the biochemicals business. So when the ramp up is proceeding, we are incurring still additional OPEX and of course depreciation then as well during the second half of the year. So it will be some further headwind on the EBIT level.

Thank you for that. And second question on energy, where you talked about up to potentially one gigawatt of new renewable capacity should market conditions justify that investment. How do you think about project returns and how do you think about assessing this opportunity relative to some other opportunities or relative to returning money back to shareholders?

Well, if I comment on that, so first of all, what Massimo is referring to there is the fact that we have on UPM lands where we have, let's say, unique conditions in a sense that we can fit a world-scale solar or wind park on UPM lands and where the conditions are very competitive. for that type of renewable energy generation. We have been in the process of permitting solar and wind projects. Then when and how it would be time to actually make the investment decision obviously is dependent on growing demand and a customer who has the demand from a new window solar park and therefore also is interested to have a PPA agreement connected to the new park so on a merchant basis in the conditions in the Finnish energy system it does not make sense to invest in this but then if you can de-risk the project and these once again are in locations that are very competitive in the Finnish and the Finnish landscape or environment then they can be investments to be considered and depends then finally on that contract structure what is the required return vis-a-vis what is the sort of de-risking related to the PPA contract.

and in general and beyond that as you also asked about comparatively to investment in other areas or returning that to shareholders. I would say the general criteria in this case that I would apply here are the same that apply to other businesses. The return of the business need to be well above the cost of capital and then the risk profile of the investment plays a role into how big compared to the cost of capital it plays. But we're talking in general here because Tapio has explained very well the nature of the Thanks very much.

And if I can squeeze the last one on the visa group, the merger and the targets. So you have a 2030 revenue target that is about 30% above the three-year trailing average for that segment. Is that Sales target purely organic, does it assume any potential M&A? And related to that, the gearing target of one, one and a half times, does that assume that you can transfer some debt in the order of 100 to 150 million euros as part of the merger?

Well, maybe if I'll comment on that as well, again, let's say, In the prospectus you can see some indications of what is kind of the level of debt or impact on UPM indebtedness. Let's say broadly one can say that we will start with a relatively low level of leverage as far as Visa Group balance sheet is concerned. Impact on UPM is minimal in terms of our net debt to EBITDA. but then to the sales target of course let's say looking at the comparison figures it's good to keep in mind that last year we had the strike for our plywood business in the second quarter of last year so that plus the fact that we have had lower construction activity and therefore in the segments where then We are selling two construction-related end uses. That has meant that we also have taken curtailment sort of short-term layoffs. And there are sort of two points to that. One is that On one hand, even in these conditions where the plywood business certainly has not been enjoying sort of high cycle demand, it has been able to generate quite a solid result. If you look at the last sort of 12 months after considering the impact in the second quarter or kind of adjusting for the impact on the second quarter last year of the strike. But then it means also that there is now operating leverage through which this sales target is achievable without any, let's say major investments or capital projects.

Thanks very much. Thank you.

The next question comes from Reinhard van der Walt from Bank of America. Please go ahead.

Hi there, Massimo and Tapio. Thank you for your time. I just want to talk about the SAPI JV. You kind of alluded a little bit to timeline before, but can we just get an update on exactly where this is in its regulatory process? Just noting that back in June I saw some headlines that there was a delay in the process because of access to information.

Thanks for your question. It also helps if that is needed to bring some clarity in that area. I would say that process is proceeding as planned. And as such, we expect to have the final resolution by the end of the year, as communicated ever since we opened up about this joint venture with the LOI in December last year. Where we stand at this point in time is, well, first of all, there are many, what can I say, assessments ongoing in many different legislations, many different countries. In some, the process has been closed already. Just to give you an example, we got clearance, for example, for the U.S. market already. But then when coming to Europe, which is by a number of dimensions the most relevant place, Thank you very much. What I believe what you refer to as a delay isn't the reality. I believe I'm assuming you're referring to some communications about the so-called stop the clock process that was triggered by, let's say, the involved authorities here in Europe. But again, that is nothing unusual. It is unusual. Thank you very much. In the past weeks and months, merger control authorities had contacts with us, with also SAPI, the counterpart, as it is customary in this process, they are contacting customers. Competitors, suppliers. So there is a high degree of information they are gathering. So this is why it's not uncommon, pretty the opposite, that this stop-the-clock approach is triggered. So very long answer, but no delay in the process.

Thank you, Massimo. Can I maybe just talk a bit about the pulp market? So, I mean, European prices spread to China is still really quite elevated. It would be good to get your thoughts on how that develops and what you're assuming in the guidance range for pulp price evolution and mix. and of course we're back to tariff headlines with the US-Canada again. Any implications for that on your pulp business would be great to understand. Thank you.

Okay, well, look, again, here I'll pick the first part of the question, which is more around the market situation in general, and I'll let Tapio to comment with reference to the guidance. Yes, what we have observed in the past month is a softening trend. Thank you very much. Thank you very much. We just consider looking at the past that over time prices will harmonize. But then when and what comes from this in the guidance, I leave it to Tapio.

Yes, and there, of course, as we have discussed earlier as well, we don't sort of disclose our estimates or forecasts on prices or other matters. The guidance obviously is based on our kind of view on the pulp market development, which we don't disclose as such. But the fact is that we do start The second half of this year at a higher level of pulp prices than what we started the first half of this year. So in that sense, that gives the sort of starting position. But then we have the sensitivity how much, let's say, the pulp market or pulp price differences will impact the bottom line.

Okay, thank you. And Tapio, maybe just any implications from the renewed U.S.-Canada tariffs on the pulp market?

Well, that of course is something that we do not know at the moment. Obviously, Canada is a competitor when it comes to, or competing region when it comes to softwood pulp. But let's see, in the past, as you know, there have been then exceptions for Brazilian imports or imports of Brazilian eucalyptus pulp to the US and so on and so forth. So what will happen with Canada, of course, we do not know at this point in time.

Okay, that's fair. Thank you, Massimo and Tapio.

Thank you.

The next question comes from Gabriel Simos from Goldman Sachs. Please go ahead.

Hi, Massimo and Tapio. Thank you very much for taking my questions. I'll keep them to the other divisions. So given the numbers reported for some of your peers in biofuels, we anticipated a better number here in the other divisions. So, I would like first to thank you for the additional information on that division, but it would be helpful to understand the performance of biofuels, specifically during this quarter versus the first quarter, and your expectations for this part of the business ahead. And also, how much has the LOINA ramp-up cost hurt profitability on a sequential basis in the second quarter, because you've given us the number for the first half, right? and if you could explain a little more detail the reason why the expenses towards Loina will increase ahead that would be very helpful because as the ramp up progresses I expected the EBITDA of the business to to improve right but it doesn't seem like that's what you forecast right so that would be interesting to understand and finally if you could add some color on how much the corporate costs are impacting that division during the quarter as well that would be very helpful thank you

Okay, so let's start sequentially with the question about biofuels. As I indicated earlier on, the performance has been strong, supported by, let's say from an operating standpoint, a full run of our assets in Lamparanta. but then supported also by significant bio-premiums for our biofuels. And I like to underline that element because we regard this as a kind of structural or meaningful market improvement. The third element is an increase of the, let's say, price for the fossil fuel base. The overall price for biofuels is made of a fossil fuel base plus a biofuel premium. So the base as well has increased, and that is linked with the conflict in the Middle East. But then I come back to what I said before, the spread increased too because Europe, which is at this point in time the main market for biofuels, is getting into adopting these RED3, Renewable Energy Directive 3 policies. which sets a number of let's say new elements which are favorable for us or favorable for our biofuel business. So they set limits to utilization of certain feedstock in the biofuel production like palm oil or other things, sets a requirement and mandate in terms of utilization of sustainable fuels in aviation and so on. So we regard this part as a structural and therefore independent from what will be the evolution of the fossil fuel Thank you very much. Lojna Thank you very much. Let's say ramp up of the operation and the depreciation are such that the contribution from any cells is not moving the needle substantially. So for the second part of the year, if you have to build some assumption, you can take the first H1, the H1 as a base, and then add some extra costs. Then there was a third question about corporate cost. I don't know, Tapio, if you have elements to give on that.

Well, maybe just a kind of background to that, that of course when looking at or when we open up here the first half impact of biochemicals and biofuels on the other operations, then that obviously explains the More significant part of what is included or what is changing obviously there for the positive and the negative as this slide three very well shows. The remainder includes the sort of group administrative costs as in any stock exchange listed company, but also Our technology R&D activities that are at the group level. So that would be, in a sense, the main points of the remaining part, but we don't disclose any detail in terms of numbers on that.

Okay, thank you very much. Thank you, Gabriel.

The next question comes from Cole Hawthorne from Jefferies. Please go ahead.

Good afternoon. Thanks for taking the question. Just some short ones, my side. I just want to confirm the headwinds in the second half from the maintenance. Could you just quantify the maintenance that you had in the first half versus the second half just so we can get a quantum picture? And then similarly, I just missed the comment that you made on the forest fair value. Is there any guidance that you're giving for the second half number, just that we've got an estimate there? and beyond the technicals. Sorry, go ahead.

Yeah, if I'll just sort of check those couple of points off first and then please continue. But on the maintenance, as I said, it's 40 million kind of a difference in very round figures. So we had 55 million equally round figures without going into the sort of single millions in the first half of the year coming in the second quarter actually. and then let's say around 90 million during the second plus or minus during the second half so that's where the sort of 40 million again without going into single millions level of difference comes from. Then on the forest fair value we don't have guidance as such so what I wanted to sort of indicate or try to sort of give some color on that is that Last year we had 130 million. We don't have the exact number or estimate yet. We will see where the interest rates and so on lie at the end of the year. But as we know, interest rates have been on the rise. The wood price trajectory from what happened through last year to what is happening this year is rather slow. Not for increase of the value so therefore then kind of the delta between 130 million and what will end up being here in this year can be let's say up to around 100 million.

I would like also to take the opportunity of the question about the maintenance to, let's say, to underline one element. During the second part of this year, there are two units undergoing maintenance, which happen to be two of the big recent investments from UPM, meaning the Paso de los Toros mill and the old Quiloto III reactors. Now they are getting into an 18-month maintenance schedule now. So this would mean that the next maintenance stop for both these units will happen in 2028. So just we're not here at the point of guiding or commenting about 2027, but I think it's a Potentially an interesting element for you to be aware of. As in the past, for both units we had maintenance after one year because they were during some way, let's say, the warranty period. Now it's going to be 18 years and they will be running uninterrupted all the way through 2027.

Thank you, that's helpful. And then maybe just following up on the adhesive materials or the old raffle attack business, it was a very strong performance with volumes coming back in the second quarter. And volumes, I suppose, have been more, not more cyclical, but they've been more volatile as there's been restocking and destocking. How should we think about the adhesive materials situation? Division for the rest of the year. Do you think that there was a bit of kind of restock and supply chain expansion in QQ so we shouldn't get too carried away for the back off? I'd like some commentary there.

I would say that there are always multiple components into a performance, but if we isolate the two, yes, there is potentially some, let's say, pre-buying during quarter two or during the Middle East crisis, or during the first part of it, I would even say, to be a bit more precise. Thank you very much. but then you know there is a lot of I would call it self-help in the current performance of adhesive material and that is something that will surely roll over the next quarters whatever the market dynamics will be because you may recall there has been significant restructuring in the business with asset closure production moved to different sites There has been investments in new terminals in Delhi, in Vietnam, in Taiwan, in Asia. There's been investment in a new coating capacity or capabilities in the U.S. and so on. So we are at the point where we see the payback of all these internal activities adding up to a market dynamic. So the market evolution, we'll see it over the future, but the internal factors are all there and there to stay. Thank you. You're welcome. With this, we have also utilized the time we had available and even a bit more. I want to take the occasion to thank you all for the participation and for your questions and look forward to meeting you or emitting you again at our next quarterly call in October. Thank you. Have a nice day.