Holmen AB

Good afternoon, ladies and gentlemen, and welcome to the Interim Report presentation for the first quarter of 2021 for the Holmen Group. Here in the studio, it's myself, Henrik Sjölund and Mr. Anders Jernhall. And we are going to go through the presentation for the different business areas we have. And once we finalize the presentations, we're happy to take all your questions. So let's start. And happy to say that we have performed a really good result for the first quarter of 849 million SEK. Especially thanks to high prices for wood products, but also higher volumes than before. And also higher efficiency in our paperboard production and also seasonally a bit more water in our hydro installations. And high prices, I should say. Should also remind ourselves that we have a solid financial position also after acquisition of Martinsson's and the payout of the dividend, which is actually today of 1.7 billion SEK. So let's go to the different business areas and start to say a few words about the wood market. We come from a situation, if you go back to last year, where we said that the market is not really in balance. After COVID had started and the first quarter last year, we had a feeling that, well, the sawmills are running almost full, but the paper industry is not. And after that, we also had a period with a lot of spruce, bark, beetle infestation volumes we had to take care of. So there was a lot of pulpwood coming out in the market. which meant that there was a good demand for saw logs, but we had simply too much of pulpwood available and not all of it of good quality either. If you look at the situation today, it has changed quite a lot. even more intense competition for saw logs because the saw mills are doing really well, as we've already understood. And they are really looking for feeding their saw mill with all the raw material they need. But also on the pulpwood side, things have changed a bit so that at least more paper mills are running full, even though we know that some of them also have closed or are about to close. But that market is more in balance. So all over Anders, the market fairly good balance, but tough competition for Zon Timber. How does that reflect our financial result?

Well, Q1 result this year was the underlying result was in line with the profit we generated a year ago. We've seen higher revenues from timber, but lower for pulpwood. These more or less evened out in the forest divisions result. This quarter we reported a gain on the sale of a forest property in the UK. It was a forest property that we bought in connection with starting up the biofuel boiler in Workington eight years ago. And we felt it was the right time to sell it now. We have one more asset close to the mill in Workington that will be sold during the upcoming 12 months. Thank you.

Paperboard. A few words about the market here as well. We say a steadily growing market at stable prices. But if you look at the situation, and again, if we look back a little bit, we talked about a lot of capacity coming in Asia, etc. But to be honest, the situation we have today is a bit different again. There is good demand in Europe, but not that good. But we see a growing demand in Asia, which has helped. And we also see that the fiber balance in the world has changed so that there are not only a feeling that the market balance is good for producers, but also that there are discussions about price increases in the market. But remember, we have said it many times before, both in times when prices are under pressure and when prices are on the way up. In the niche where we are, they move very slowly. If you look at how we have performed, we have been able to slowly but steadily improve our own efficiency. We had a period, especially a couple of years ago, when we were not happy. But if you look at the last few quarters, we have at least been doing better and better. And we have now established a production level of, in total, a bit over 550,000 tons. So Anders, better production efficiency normally means better profit, doesn't it?