Holmen AB

Good morning, everybody, and welcome to the Interim Report presentation for Holmen. It's myself, Henrik, and Anders, who will take you through the presentation. And we do as we always do. We take your questions after the presentation. So let's begin. We are really happy to be able to show a result for the third quarter, which is on record levels again, not reaching up to exactly where we were in the second quarter, but that was totally outstanding. We have followed market pricing, meaning we have good pricing power, and we've also been able to control the cost situation. We'll come back to that. It's a lot of hard work when it comes to handling the energy situation in most of our business areas, which we will come back to a bit later in the presentation. Good profit level also means strong cash flow. And strong cash flow in our case means also that we have a really low net debt currently. Let's move on to forest and our different divisions. And I will start with a slightly different slide this time, just to remind you, we are, as you know, a company where the forest is in the center of everything we do. But we have also done it in actually a really good way during the years. We plant trees with a perspective of 80 to 100 years. And if you just look at what we have been able to accomplish the last, say, 50, 70 years, we have more wood standing in the forest than ever before, twice as much as after the Second World War, at the same time that we have over time been able to increase the harvest. But we have also, as one of few countries in the world, been able to... reach biodiversity index status which is let's call the good status it's us it's Finland and it's Canada and the rest of the countries aren't simply not there and if you look at Sweden it's also interesting to see you can't see it on this slide but we have improved a lot the last 30-40 years then moving on to the current market situation in the wood market We have talked a lot about tough competition for saw logs the last year at least. But things are changing, as you know. So when it comes to the saw mills, the activity is a bit lower. But when it comes to pulpwood, competition is increasing. Partly because there is not coming any wood anymore from Russia. The pulp mills are still running full. And it means also that less wood Mills running full, more competition, and also when it comes to the energy situation, there is an interest for also burning the wood as prices are currently. Prices are ticking up, Anders. That normally means that we should make a little bit more money in the forest.

Yes, Henrik. The third quarter represents a quite normal quarter. Around 350 million SEC is a normal profit level in today's market environment. We have prices that are Year over year, 15% higher. We have some higher costs as well, but prices, we have established a new profit level in the forest division, reflecting the current market conditions. When it comes to asset values, Henrik, we can take the next slide. You all know that our forests are booked at the value or based on transaction prices in the areas of Sweden where we own forests. We update that annually in the fourth quarter. We'll do it in the fourth quarter of this year. The graph we have included in this presentation includes one of the sources that we use and their pricing up to this summer, which indicates that forest prices are still or have been rising this year. So it indicates that the forest value will increase when we close the books for the year.

Thank you. A few words about paperboard. Also here, we have been able to successively stepwise increase prices. And it's a market which has been, well, demand has been rather good the last couple of years. a bit of a change if we look back a number of years back, but it has been good. And what we have seen lately when it comes to pricing is quite obvious. After many years with hardly any change in price, we have now seen that price have ticked up quite a lot, mainly driven by cost pressure from beneath energy and fiber. In our case... We have good order books. We see in the general market that the order backlog is coming down a bit. But so far for us, it looks fine. But we are also self-sufficient in energy. Not only self-sufficient, we actually have some extra electricity to sell, which has helped the result, I guess.