Holmen AB (publ)

Good morning, everybody, and welcome to the interim report presentation for the Holmen Group. My name is Henrik Sjölund, and this is not Anders Jernhall. This is Stefan Lorén. He's been with the company for actually quite many years before, and then you were away working for LKAB and back now as CFO. And Anders Jernhall, who you know really well, most of you at least, he has a more free role as vice president of the company. So we will do the presentation together in roughly the same way as Anders and I used to do it. And then after the presentation, we are happy to take any questions you might have. So Stefan, let's start. First quarter. A good result from us. Again, not the least thanks to a really good performance from board and paper, which I will come back to a bit later. The environment is not easy. The market conditions are, I would say, both uncertain and not extremely good. We'll come back to that as well. If we look at our industry, I mentioned board and paper, but if we also include our wood products division and look at how we have performed in terms of return on capital employed in the first quarter, we reached 20%. And as you know, the last 10 years, looking at the graph, we've been on that level roughly, actually 19% as an average. We are now a little bit after the first quarter. We have, as always, I would say, a very strong financial position and we paid a lot of dividend, 1.9 billion SEK. And after having paid the dividend, our financial position is strong and we have a net debt of roughly 10% of equity. All right, let's start with the forest division and maybe more the wood market as such. I think if we go back one year and when we discussed, we discussed actually quite a lot. What is the situation in the wood market? What do we believe about price development going forward? At that time, I couldn't really see anything that should change the situation that prices would continue to go up. Today, The situation is slightly different. We can see that in the first quarter, solog prices continued to increase, especially in south of Sweden. And the price difference now between south and the northern parts of Sweden are bigger than ever before. If we look at the pulp wood prices, we have a situation now where we see that prices are leveling off. And what do we mean by that? Well, we can see that the industry is not running fully in Sweden. We also see that there has been some demand from district heating, biomass boilers, and we've had a rather mild winter. And also electricity prices have been really low, especially up in the northern parts of Sweden, which has some effect. And not only that, but also we can see that the supply of paltbord, meaning the area that is reported for becoming harvested, is increasing as we speak. So things have changed a bit, and as we say, we see that pulpwood is kind of leveling off. But Stefan, prices went up in the first quarter.

They did, Henrik. We reported an operating profit from the forest division of some 487 million Swedish krona. It is affected by temporarily lower harvesting on our own forest this quarter. That is due to us having our harvesting resources in areas where we have more felling rights than we have owned forest and then the harvesting from our forest becomes lower than what's normal. The effect on the result is partly offset, the lower harvesting is partly offset by some price increases that we implemented during the quarter.

Let's move on to renewable energy. electricity prices well we have a quite a big difference between northern sweden sc3 where we have our consumption of electricity well up in the north we have most of our production and then germany and if we look at the chart we can see that prices have been extremely low up in the north for one year now The situation right now is that there is a lot of water in the system, more than usual, which has some kind of effect. And we also have in Sweden something called flow-based, which we haven't really got our arms around. We don't 100% understand exactly what the effect is on the energy price and the system in Sweden as such. If you look at the situation in Germany, this is obviously not so good if you produce a lot of energy or electricity up in the north. Simply, the electricity right now up in the northern parts of Sweden is locked in. We can't make use of the electrons where they are needed. That's why the price difference. If you look at Germany, we can see that prices are coming down a bit. They've been rather high, because fossil energy has been quite expensive. Right now, the sun is coming into play in the system, at least at daytime. The sun is not shining so much at nighttime. But in Germany, there is quite a lot of solar energy on the margin, which means that at daytime, actually, it has an effect on the price, together with slightly lower gas prices. Stefan, even though we have a portfolio of, not nuclear, but hydropower and wind power, most of it is up north. So even if we make like 30% better than the average price, it's not easy to make money when the price is very low.

No, it is challenging conditions, as you say, Henrik, and that is also what we see in the results from the energy division. It's really low being the first quarter of a year, which generally is a quite profitable quarter. I can mention also in relation to this that we have approximately 10% of our hydropower facilities out of operation due to a rebuild that will come into production again during the summer.

Yes, continue with wood products. And starting off with the market situation right now. Well, I think most of us, if we first of all, if we look at what has happened to the price in the first quarter, we can see that prices have ticked up a little bit, not so much, but to some extent. And I think most of us in this business, when we try to make a forecast where we would be, let's say, after the summer or during this year, we were at least fairly optimistic about the construction cycle. And we thought that things would become better during the year. But that was before Liberation Day. And now we are after Liberation Day and the uncertainty is huge. We don't really know what's going to happen. Right now, there is no tariffs when it comes to wood products. But of course, there is a risk that there will be tariffs. When we When we look at the situation for us, and also looking at Sweden as such, I mentioned before that there is a really big price difference for saw logs between southern parts of Sweden and the northern parts of Sweden. And one sawmill in particular, the Braviken sawmill, which is rather big for us, is in exactly the area where the spruce bark beetle infestation was I would say the most hit area in Sweden, really dry on the east coast of Sweden, which meant that for a while we had a lot of supply of saw logs. We could run the sawmill full, but we are in a situation now when there is kind of a backlash. We know there is a global scarcity of saw logs, but in that area, it's even more difficult. that together with that we have also really high saw log prices for the moment and also uncertainty when it comes to what will be the price for wood products in the autumn because remember the saw logs we buy today we will make use of them and produce planks somewhere in october november And that together with also in Braaviken, we have the biggest part of what we produce and export to the US. We have come to the conclusion that we will reduce the capacity a bit. There are some alternatives to choose between, but we will definitely take down capacity a bit and kind of wait and see to understand where things are going when we look forward. I talked a bit about tariffs and I said today there is no tariffs, but we will see what happens. Just to remind you, US is consuming roughly 100 million cubic meters of wood products. Everything here in the bar of Canada is going to the US. This is exporting from different countries. 20 million cubic meters of the 100 being consumed in the US is coming from Canada. And roughly five of what's coming from Europe is also going to the US. So we are dependent, but it's not an extremely big market for us. But it has some effect, definitely. Stefan? We consumed not what we are buying today, but what we bought half a year ago, roughly in the first quarter.

Totally correct. And still the result is just above break-even level this quarter. We have had some headwind from the rebuild of the Iggesund sawmill that affected the result by some 30 million Swedish kronor in Q1. If we compare Q1 with Q4 last year, we see that prices have increased, but we also see that log costs continue to rise, as Henrik just mentioned. But the net effect quarter over quarter is that the margins has increased a bit compared to where we were one quarter ago. All right.

Board and paper, starting off with board and the market situation. We said some time now that things are picking up, but not back to where they used to be. To be honest, when you look at moving 12 now this year or after the first quarter, we have to remember also that Eastern last year was actually in March and this year Eastern was in April. which means slightly less good than what we see on this chart. And just to be honest, it's not back to where we were a few years ago, at the same time as there is more capacity around. And there is also more capacity coming on stream, especially the really big machine in Ulio, the Storenso machine. And it means that there is quite the fight for market shares. We are doing really well. Our market share has increased a little bit, and we are also doing well when it comes to production, which is good news. And the price is more or less stable, but with a new capacity and also with the uncertainty when it comes to tariffs, of course, it's kind of a waiting mode. And we see that our customers worldwide are not really consuming as we thought if we go back half a year or so. Talking about tariffs, right now there is a 10% tariff on board and on paper. I can't say it has had any impact on the business so far. It's more what's going to be in the future. And it's also the indirect effects as there is some capacity in the US that is not totally utilized today, so they could increase capacity a bit. And there is quite a lot of production in Europe that is being exported to the US today. And if there would be a bigger tariff against Europe, of course, it will be a tougher environment here to find a way to offset production here in Europe. As I said, we have a fairly good order book or we have a good order book, but not even we can run absolutely full. Partly because we are producing really well, but also we have to take market related downtime. Paper. It's also overcapacity, but for different reasons. You know, we have here, we have structural decline when it comes to demand. That's something we're experiencing right now as well, together with the uncertainty. And also here we have 10% tariffs. Also when it comes to paper, we don't see any effects yet, but it's all depending on what the tariffs will be and what people will consume in the future. Because now consumption is also, when it comes to paper, a bit lower than normal. Prices also more or less stable. And also here we are doing well when it comes to production efficiency etc. But also here we need to take some market related downtime. But we have done well, Stefan, haven't we? Can you explain how it's possible?

Given the market conditions that we're operating, it's a really good quarter, the first one this year. That is due to, as you said, Henrik, good production in both board and paper division, also strong deliveries from both the segments that we operate. On top of that, we have unusually low energy costs in Q1, and that is because we have the ability to run and stop our machines in a good way, and then we can take advantage of the high volatility in the electricity market that we've seen in the beginning of the year. Also managing going forward, we have two maintenance shut in this division during this year, one in Q2 and one in Q3, and the total effect of those are approximately

300 million swedish krona quite evenly split between q2 and q1 well explained last slide just to remind ourselves the biggest question we have in our industry is to make sure that people understand that the forest should be used not standing there storing carbon all right that's all and we're happy to take your questions we will now begin the question and answer session

Anyone who wishes to ask a question may press star and one on their telephone. The first question is from Linus Larsson, SEB. Please go ahead.

Good morning, gents, and thanks for taking my question. Starting off with the buybacks that you're announcing today, congratulations on that board decision. It was, in my opinion, could you just maybe elaborate a bit on the board's decision on the size of the buyback mandate and your thinking around it. What are the restrictions and why wasn't it slightly or significantly bigger than what you actually decided, please?

I think if you start, Linus, with the decision we took last year to make use of the mandate from the general annual meeting, it was also up to a maximum of three million shares. And it's actually the same decision we have taken this year. And then we will see how we will make use of the opportunity or the possibility to buy back shares, given what we find is good timing, depending on Of the share price. Yeah, of course. And also given the financial situation we have, and if you look at the... Well, if we start to look at, first of all, the value of the forest, we think this is a good way for our shareholders to actually own more forest per share to a very attractive price.

I couldn't agree more. I'm just curious what's holding you back to make it even bigger?

As you know, we're quite careful with the balance sheet that we have and we don't want to put too much debt on to the balance sheet. So we think that it's quite a balanced decision from the board.

Then I'd also like to ask about board and paper, which reported surprisingly strong numbers in the quarter. And I also note what you just said about no impacts being seen thus far from the ongoing turmoil in the overall macroeconomy. Could you talk a bit about your Order books, how long are they? Could you also talk about your order inflow, anything that you've spotted so far, any tendencies in either directions? Do you think there is elements of restocking in certain markets? And just a bit of more color there would be helpful. Thank you.

Linus, when I say that we don't see any effects of tariffs, that's up until today. But when you talk about the order book, you are absolutely right that, well, we see the market as rather weak. And I said also we need to take some market-related downtime. How much that will be in the future, I don't know. But we see that in board, first of all, we are not really coming back to where we were. And we had some overcapacity already from the beginning. And we know that there is a lot of capacity coming on stream. And on top of that, we have the uncertainty with tariffs. And it's not that we deliver a lot to the US. It's maybe 3-4% in board and paper, a bit more in wood products. But it's the indirect effects that we don't know what they will be. But we do know if there will be bigger tariffs against Europe, so we can't deliver as much as the industry as such is doing today to the US. it will be a fight for market shares and for orders. It's already today a fight. So it's a bit weak when it comes to demand, both for paper and for board. And for wood products as well, actually.

Thank you. And then maybe just finally, you talked about the differences in the various roundwood markets, north and south, pulpwood, saw logs. What's your... I mean, the industry is far from running full, including yourselves. What's your forecast here when it comes to the wood price trajectory in, let's say, 12 months out from here?

We normally don't do that. But what I said was that last year when we discussed this, we were quite sure that we couldn't see anything that would change the market so that prices would all of a sudden start to go down. And they didn't. But where we stand today, what I said is that, well, we see some tendencies when it comes to pulpwood. Supply, first of all, the forest owners, they are increasing the area. They report for harvesting. We see that during the winter, well, not as much biomass was used for district heating. We see that the industry is not running full. And as you or I said, Stefan, it's leveling off. For saw logs, we can only see that The situation we have in south of Sweden with the price we have to pay for the saw locks right now, it's extremely challenging. And the difficult part is to understand what will be the price for wood products in the autumn when we are about to consume what we buy today. And we were more optimistic about the construction market half a year ago. And after liberation, again, there's a question mark, which makes it... difficult to know and to be more on the safe side so to say we have come to the conclusion well we have to reduce production and see where it's going because right now to buy wood to that price it's not working and it will not work as if things don't change and remember when it comes to wood products also an important part of the calculation for a sawmill is also to sell wood chips to the pulp mills And that market is leveling off, as we said. Maybe it wasn't totally an answer to your question, Linus, but almost, I hope.

That's helpful. Thanks a lot to both of you. Thank you.

The next question from Robin Santavirta. Carnegie, please go ahead.

Yes, good morning. So, first of all, regarding the board and paper segment, could you provide some comments on the production volumes in Q1 versus delivered volumes? And also, could you provide some details on the split between the paper board and paper businesses, something about volumes and earnings split there?

Well, if you start with the split of the turnover between the two divisions, it's approximately 50-50. A bit higher operating profit in the paper segment compared to the board segment this quarter. It varies a bit, but the low energy cost that we have seen during Q1 is affecting paper more than it affects board business. When it comes to production, it's fairly on par with deliveries during Q1. Then I must say I forgot your third question Robin, sorry.

No, I think you answered actually both and I think I was on it too, but if I can continue with one more. And it's, again, more than paper. And I was wondering if you could provide a bit more detail on the energy setup you have probably in the paper business. But isn't a large part of the energy consumption hedged? I think something like 70 to 80 percent you have hedged. So how does that were called and also I was wondering if you did have some carbon certificate sales in the quarter and how that this year-on-year or queue on queue

Well, to start with, you're completely right that we have hedged a large part of our electricity consumptions. We all go into the spot market on a daily basis. And the new pricing system, the flow-based system that Henrik mentioned, has changed how the electricity market works for the moment. And we have been able to take opportunities into the volatility in that market in the beginning of the year. How that will play out going forward is really tricky to say. We don't know, actually. I can comment on the low energy cost as such. It's approximately 100 million Swedish kronor lower in Q1 than what's normal. And we have no sales of emission rights in Q1.

Good. All right, thanks. And if I can just specify when you say take opportunity, what does that mean? Is it turn down production and sort of sell on the balance in the daily?

Yes. Yes, it's about our ability to how we can run our paper machines. We can start and stop them quite easily and we're quite good at it. So that's the opportunity that we can take.

Right, and then you have secured some sort of attractive price that you potentially sell on the balancing market, that energy instead of using it to produce paper.

It's a lot of items that actually makes it possible to take advantage of the electricity market for the moment. So it's hard to say that it's one thing, but the underlying thing is that we have the ability on how we can run our paper machines.

Thank you very much. Well done in the quote.

Thank you.

The next question from Jane Gaurav Barclays, please go ahead.

Thank you so much for taking my questions. I have a few. So if I hear your comments correctly, you know you are saying that board and paper the forward market is likely poor because of new capacity from competitors. And the wood market is going to be poor because clearly there is a mismatch between when you buy saw logs, which is today, and when you sell. So is the rest of the year going to be much worse than what we are seeing in Q1 in terms of your EBIT?

If we start with the wood products market, remember that when I said in the beginning that prices have come up a bit in the first quarter, that is because of a global scarcity of saw logs. It's not that demand is very good. We thought in the beginning of the year that 2025 could be the year when the construction market is picking up a bit. After Liberation Day, we simply don't know. But what we do know is that we buy more expensive wood today than we did half a year ago. Which means that the expensive wood we buy today is going to be consumed in roughly half a year's time in the autumn. We don't know where the market will be. We can only see that the uncertainty has increased. And it's a question mark if construction will pick up. I would say it's less likely than it was before. That's why we also take down production in the south of Sweden where saw logs are very expensive. In board and paper, you are absolutely right. And in board and paper, it's not the scarcity of supply. It's all about demand and where will demand go. And as we have, as an industry, spent a bit too much money on new capacity, it takes time before demand picks up and consumes the overcapacity we have in the market. It's not a lot, but it's there. And we can see that in consumer board, we already have some kind of overcapacity because demand has not picked up and hasn't reached levels we had a few years ago. And also there, of course, we see a question mark going forward. What will happen to demand when there is a lot of uncertainty in the market? So that, together with new capacity, will lead to overcapacity. So far, the market, it's not dramatic, but we'll see. With tariffs, it will be more difficult.

Right. Thank you so much. Can you just remind us of these flows on wood into US? Because I believe there is tariff on Canadian lumber. And so one thought process was that it could actually benefit you know, players like you.

Like I said before, the US is consuming roughly 100 million cubic meters. 20 of those comes from Canada and roughly five comes from Europe.

Right, and the Canadian number now has status, so the European should be seen as a beneficiary.

No, no, but today there is no tariff. There is an underlying 15% from Canada, but that has been a tariff since many years ago, so that's part of normal. It's what will come, perhaps, if anything will come, it will be on top of the normal situation. So today you can say... Forget about the tariffs with Canada right now, because it's not affecting the market. It's been like that for some time. So it's about what will be in the future. We don't know.

Okay. Thank you. Then secondly, on the forest and on the change in biological assets. So there's a big step up on a year-on-year basis. The book value of forests has also run up, but your key competitor, they didn't see that. So could you just help us understand why there is... that change which is happening and how you know on the value being put into the P&L on this change in biological assets.

Yeah the change in value of forest in Q1 is higher due to us harvesting less on our own forest than we save money on the bank account so to say when we don't take out the wood from the forest and that creates a higher change in value of the forest in Q1. And it's also that we don't have much silviculture cost during Q1 that also affects the change in value of forest. So that are the main explanations for the change in value of forest in Q1.

But over the year, next quarter, we will harvest more.

We will probably harvest more and then change in value will go down. But the net effect of the EBIT is limited. But it's a shift between operating result and change in value.

For the full year, the number in more or less is still about 900 to a billion SEK.

At this market condition, it's reasonable to think that the change in value of forest on a yearly basis will be in line with what we saw last year.

Thank you so much.

The next question from James Perry, Citigroup. Please go ahead.

Morning. Thanks for the presentation. I'd also like to ask about board and paper. Sorry to keep pressing. You said that demand is a bit better in board and lower in paper. It looks like the segment volumes are up about 2% year on year. Do you have any sense as to whether there was an infantry build or changing order patterns, or should we just see the figures as reflecting underlying demand? And are you seeing any acceleration in the graphic paper demand decline in the current environment, would you say?

If you take paper first, no, I think structural decline is around 10%. It's been a bit less after a big drop in 2023. But going forward, we expect demand to drop like 10% per year, roughly. That's what we have in our forecast, or we plan for that at least. when it comes to deliveries and board?

I actually didn't catch the question. Was it the order book in the board as well or was it deliveries going forward?

Yeah, should we see the numbers reflecting underlying demand or have you seen any kind of inventory build or changing order patterns from the customers?

No, the demand is still weak, I would say, Henrik, as you describe it. We don't run full inboard either, and new capacity is coming to the market, so it is an uncertain market condition inboard as well.

But deliveries, they correspond to the market situation right now. We have not built a lot of inventory.

The next question is from Martin Melby, ABG, please go ahead.

Yes, good morning. You've stated a couple of times that there's a lag on the wood costs into your system. Could you tell us then how much will wood costs increase in Q2 and Q3 roughly for Holmen? That's for you, Stefan.

I don't give any detailed guidance on that. You can look at the price graph from the statistic and then you can see where we were price level-wise six months ago, and then you can see how the increase has been from that. I think that's the easiest answer.

You can also say that when it comes to pulpwood, prices don't differ very much if you look at different parts of the country. When it comes to the saw logs, we have a huge difference between south of Sweden and northern parts of Sweden.

Okay, so it's mainly the sawmills that will have firewood costs going forward. the pulp wood will not rise anymore.

As we said, leveling off.

Yeah, from here. Okay. Next question. Harvesting on the forest division, is that coming back already in Q2 or is it a longer wait?

It will pick up to some extent. From a full year perspective, this temporarily low harvesting that we saw in Q1 will have no impact whatsoever on an annual basis. So it will gradually be higher during the rest of the year compared to Q1. But how much that will come off in Q2 is hard to say.

And then you said the board and paper had unusually low energy costs in Q1. And you also mentioned 100 million. So how much was unusual and how much was usual?

The unusual was the 100. It was 100 million SEK lower than what we usually have as energy cost. Okay, thank you.

And last question. SCA said the lumber price is up 10% Q2. Do you subscribe to that?

If you compare the situation one year ago, it's a bit more than 10%. What we see in our figures, it's maybe a bit lower than that quarter over quarter. But it also includes some mix changes, etc. So it's hard to give a firm answer on the exact number.

Sorry? For Q2? That was for Q2?

To be honest, the big thing for us is the bet on the future, and it's the autumn, as we again talk about the lag, which is roughly six months. When you buy the wood today or the saw logs today, you have to understand what will be the selling price in the autumn when we actually are going to consume it and sell it and do the calculation. That's the tricky part when it comes to wood products right now, especially when you pay a lot for the saw logs down south, not northern parts of Sweden, but in the south, it's really expensive. So the wood products prices, they need to go up quite a lot to make it worthwhile harvesting or buying the sawlocks in the south right now. More important than where the price is right now. Thank you. Thank you.

The next question is from Oskar Lindström, Danske Bank. Please go ahead.

good morning uh a couple of questions from me uh first on the wood products business area um yeah the first one here is on on the 30 million in extra cost due to the igasun sawmill rebuild should we expect more of this in the coming quarters

No, you should not. And it's not only direct cost, Oskar. It's also that we don't produce during the rebuild. Then, of course, we are in a startup mode in the end of the first quarter. But it will be only limited effects in Q1, as Henrik said.

It's up and running. It's up and running. Wonderful. Yeah, and then also on wood costs or log costs, logistics are an important part of determining what the cost is for the mill. We've previously heard about tough or high costs for logistics. How are they developing?

If you take pulpwood, and as we said before, the industry in Sweden today is not running full. And prices for pulpwood, it's roughly the same all over the country. It's no big difference. It is mainly, again, the saw logs, that huge difference. We make use of the logistic opportunities we have to move some from the north to the south, etc. But the higher the prices for the saw logs, the less important is the logistic cost at the same time as a share of the total cost. It's not brutal to move it. Once it's on the train, for example, it's more to put it on the train that costs money rather than how far you take it on train, for example.

So, Barney, we previously heard, maybe this is a couple of quarters ago, about sort of lack of personnel, you know, difficulties in getting people to actually travel. due to logistics is that still a situation or is that those constraints easy no i i can't say that's a problem today and also it's not lack of pulpwood today in the market good all right and then a a second question also on the wood products business area um You talked about the uncertainty following the announcement of U.S. tariffs. What's the outlook for construction markets in Europe, both Sweden and other European markets, and perhaps also the Middle East? Are you more negative there as well as compared to where you were, say, three months ago?

Yes.

Or at least more uncertainty, of course.

Before Liberation Day, we thought, and I think most people thought the same, that this could be the year when the construction cycle would look a bit better and pick up after the summer. Second half, we thought it would be quite okay. And we also thought maybe wood products prices could come up a bit, just because there is a global scarcity of raw material. But as things are right now, I think we and most others think that, well, it's a big question mark for whether it will pick up. I don't see it right now. And we also see that consumer confidence in general is lower than it was before Liberation Day.

And this is referring also to Europe and Sweden. Yes.

Of course, in the month where we are right now, when you are going to build a new veranda, you buy, do it yourself, looks right now a little bit better in Sweden than it did a few months ago. But that's normal. It's more after the summer, what will be the situation then? Because you really need a price increase to support what we pay for the saw logs right now. And that has become very uncertain.

Yes. Now, moving on to the board and paper business area and the 100 million Swedish krona positive effect that you mentioned. Yes. Sorry. And just to be 100 percent clear, was this 100 million in sort of lower energy costs or was it a net positive effect from sort of hedging and being able to run your mills and your energy purchases slightly differently due to the new flow-based model that's being implemented in Sweden. I'm not sure, do you understand my question? Was it sort of just lower costs or is it like you're able to run things differently and those 100 million will continue, you know,

It's very hard to see if this will continue, Oskar. As Henrik mentioned, the new flow-based system has created a bit of a new way how the electricity market works. And we have taken the opportunity during Q1. If those opportunities continues, we don't know. So it's really hard to predict the future when it comes to this. The 100 million Swedish krona that I referred to, if you take the normal cost level for energy in total for the paper and board division, it's 100 million lower than that in Q1.

And also normally, I mean, this has to do with the electricity system in Sweden, in south of Sweden, it's not in balance. And now we are in a period of the year when normally electricity prices are a bit cheaper and it's easier to be in balance because it's not so cold, for example. So very difficult to understand where it's going, but we've been able to take advantage of it in the first quarter. That's all we can say.

So it wasn't sort of selling hedged contracts and sort of these types of things. It was just a lower cost. Good. Yeah. Thanks. I mean, those were my questions that I had. Thank you, Oscar.

As a reminder, if you wish to register for questions, please press star and one on your telephone. We have a follow-up question from Jane Gorav, Barclays. Please go ahead.

Thank you. So a follow-up question on, you know, the wood products dynamics. So SCA is reporting almost a 10% EBIT margin, and they would say that their sawmills are in the north, and you are reporting breakeven, and, you know, you are more towards the south of Sweden, whereas you are saying the saw log costs are higher. And then you also said that as the saw log costs go up, then the proportion of logistics to saw logs comes down, so it should be easier to transport. So why can't you just transport swallows from the north to the south and, you know, maybe have a better operating margin?

We do transport, but we have limited capacity to transport. Like many other players. So we can't. There's a limit to what we can do. And over time, we should live from what we have locally available.

Okay. Thank you so much.

Gentlemen, this was the last question. I would like to turn the conference back over to you for any closing remarks.

All right. If there are no more questions, thank you very much. Very good discussion. Thank you for taking the time. I look forward to hearing from you soon again. Thank you.

Thank you.