Arctic Paper S.A.

Hello and welcome to today's webcast with Arctic Paper, where CEO Michael Jarczynski and CFO Katarina Wojtkowska will present a report for the first quarter of 2025. After the presentation, there will be a Q&A, so if you have any questions to Arctic, you can send them in via the form to the right. And with that said, I hand over the word to you guys.

Hello everyone, welcome to this Friday morning presentation of Arctic Paper financial results for first quarter 2025. Together with CEO Michał Jopczyński, we will present this to you. Starting with a summary of Q1 2025 results, if we compare them to the same quarter of 2024, we can see that there was some decrease in our net sales. It had two main, it had a bit different reasons in our both segments. In the paper segment, the biggest impact was the lower volume of salt paper and also just a slightly bit lower paper price. On the side of pulp, the main reason was lower volume salt. On the EBITDA side, we also noticed significant decrease of our results and it had some influence also from the paper segment, which was mostly, as mentioned before, lower volume and a bit lower price. Whereas on the pulp segment side, the main reason was very high cost of wood. So raw materials on one hand and on the other hand also the strengthening of Swedish krona against both US dollar and also euro had some impact on the results. The group's net debt to BTA ratio is still on a safe level, even though it has increased somehow due to more use of our overdraft facilities, but it still remains on relatively low level, which indicates the good financial position of the group. Let's go to the characterization of each of our segments.

Next, please. Q1 was quite stable and unfortunately not in the favor of the pulp and paper producers. The demand in Europe and even globally demand for the pulp and paper product was weak. And also we already see this regarding the prices. During the Q1, we have flat prices, even small decrease compared to December prices and also small flat compared to the last year. Move to the next one, please. From the volume perspective, we are a bit better compared to end of last year, but significantly lower compared to Q1 2024. The demand for paper is weak and we were able to use maximum 74% of all capacity. It's a little bit better compared to December, but normally December and the Q4 is a quite weak period for the pulp and paper producers. From the volume perspective, we were able to produce and deliver 125,000 tons of fine paper to the customers. Next, please. From the operating data, the revenues is quite flat, small difference compared to Q1 2024. It's only 0.5%, but also a small decrease compared to end of last year. The evidence price is also affected by the currencies. But the currency's fluctuation and the effect of the currencies for all results will be presented in a few minutes by Katarzyna. Next, please. No changes regarding our product structure. We are still producer of fine quality paper in three paper mills, two in Sweden and one in Poland. Regarding the market share, also not big changes. Europe is still by far our key market. And unfortunately, Germany is due to the recession or weak economic performance. We were not able to maximize our size according to our plans. Still, Germany is number one. And then the next big market are Poland, UK, Central Europe and Nordic. Our sales outside of Europe is quite limited, only 2%. We already started, beginning of last year, small sales to the US. and it seems that due to the current tariff issues and turbulent in a global trading relation this market is not so promising and probably we have to revise our strategy regarding this market already this year we delivered to us close to one and five thousand tons of paper thanks please No changes regarding the client structure. Our biggest percentage of the product is delivered to the merchants, which are responsible for delivering the product for the middle and small-sized companies across Europe. The second part is the printers across Europe. Big printers are located in France, UK, Germany. And the next is the publishers, mainly in Germany and also in UK. The next, please. The pulp market is also characterized by low demand. It's affected mainly due to global recession or global turbulences regarding the trading. The demand for pulp related products like paper, packaging and tissue product is weaker compared to 2024. And it has significant impact regarding the results delivered by our pulp segment. Next, please. Still, we notice very high or even the most expensive wood prices in our history. And unfortunately, even due to this quite stable demand for the wood product, the prices of wood pulp is growing in Sweden. And the average is close to 700 Swedish kronor per cubic meter delivered. We hope that it will stabilize because the demand for the forest product, especially timber, is quite stable or even decreasing. But probably it will affect positively on our result on Q3 this year. The next piece.