Holmen AB

Good afternoon, ladies and gentlemen, and welcome to the year-end report presentation for the Holmen Group. My name is Henrik, and together with me is Anders. I think we are quite well known to most of you. And we do it in the usual way. We go through the presentation, and after that, we're happy to take any questions you might have. So starting off with the result for 2021, it's a historically high result, a good result, especially based on that wood products market has been exceptionally strong during the year. And in the light of the good result, today the board of directors of Holmen have decided to propose to the annual general meeting to decide about an ordinary dividend of SEK 750 and also an extra dividend of SEK 4 crowns. Just to remind ourselves where we are, we have a very strong balance sheet, good financial position. Anders, you will come back to the forest valuation in our books. And also, please note that we have a net debt situation of a bit over 4 billion crowns or a ratio of roughly 9%. And in 2021, we have... Paid also there an extra dividend and also invested quite a lot of money in our industries. If we then go to forest, a few words about the forest and the wood market before we talk about the value of the forest. We know that the saw mills have been running more or less full the whole year, which has created quite high demand for especially saw logs. That has been the situation, especially during the first half of the year when prices were extremely high when it comes to wood products. And in the second half, even though we have seen that sawmills haven't been running that full, still we see that there has been quite a good or stable, strong demand for sawlocks. When it comes to pulpwood, we've had a situation during the last few years actually where we have had a bit oversupplied situation of pulpwood. But that market has now started to dry up. And today I think we can say that the market is in fairly good balance. But with the industry actually consuming a little bit more than supply at the moment. And then we are happy to see that there is still a lot of people, Anders, who are interested in owning forests. And they pay more and more money for the forest lands. If you take us through what that has meant for our valuation, please.

Yes, as you saw from the previous graph, prices have steadily risen in all parts of Sweden. And as you probably all know, we use the three-year last transaction prices, the average of that, to value our own forests. That means that this year the value of the forest went up by 9%. All of this change in value has gone directly through equity and has not passed through P&L. So we take the next slide on the reported result. It was high in Q4, driven by a sale of a UK forest property. And this is some properties that we bought in conjunction with starting up the biofuel boiler in Workington to secure the raw material supply. It doesn't have a meaningful use for us anymore. So we have decided to divest it. So that impacted the profitability by slightly more than 200 million SEK. Underlying profit for the forest in this quarter was 300 million SEK.

Thank you. Then moving on to paperboard. Here the market has been exceptionally good. I shouldn't say exceptionally, but really good over the last couple of years during the pandemic. We see that demand from European customers is good. Deliveries from European suppliers to Europe is up some 6%. And for the first time in, we used to say 10 years, we actually not only talk about price increases, but we also see them materialize in the market. In our case, we see strong demand. And if you compare prices in the fourth quarter compared to the third quarter, our prices are up some 2%. And just to remind ourselves that we have multi-year contracts for roughly half our business where prices where it takes longer time to change the price. And going into 2022, we fall off the market with what is open in terms of our production that where we can increase prices in the same way. In our case, we have had two maintenance shuts during the year, which have limited our deliveries a bit. We have also reduced our stock levels during the fourth quarter, which means that we have not been able to increase deliveries during the year. We have kept it roughly on the same level as in 2020. And Anders, there is a lot of items that affect the financial result in the fourth quarter. Please take us through.