Holmen AB (publ)

Good afternoon, everybody, and welcome to the year-end report presentation for the Holman Group. It's me, Henrik, and Stefan, as usual, now I must say. Thank you. You're most welcome to listen to us. We do the presentation, then we're happy to take all your questions, and we are especially happy that you take your time on a Friday afternoon like this. So let's start. I think if we just make a very quick summary of the year, it felt like we were a bit optimistic in the beginning of the year, but after a while it changed into... geopolitics tariffs and also cautious consumers not really spending and also construction business that didn't really take off but we come back to that a bit late Despite challenging market conditions, we were able for the full year of 2025 to deliver close to 3.3 billion Zinc, which we consider as fairly good. Also in the fourth quarter, but I think in the fourth quarter we'll come back to it when we go through the different business areas. It makes more sense. If we then take our industry, which means our right now loss-making sawmills and board and paper, we've been able during the year to deliver return on capital of employed of 15%. And based on our performance and also our financial position, We had a board meeting this morning where the board of directors decided to propose to the general annual meeting to increase the ordinary dividend from SEIK 9 to 9.50. And just to remind ourselves what we have distributed to our shareholders. The last five years, in total, $13 billion in dividends and buybacks. And given, as I said, our financial position where our debt-to-equity ratio is at the current moment roughly 10%, we are in a solid financial situation. All right. Then a few words about the wood market, and we come back to forest and forest evaluations a little bit later. And if we start with the fourth quarter, of course, and then we will also comment on the storm a little bit, which happened in January. But what we saw in the fourth quarter was that the industry is running at a bit lower activity and also a little bit slower demand for pulpwood. And prices have come down a bit. And price lists have been adjusted. But what you see here, remember, this is delivered to our meals, both pulpwood and saw logs in the fourth quarter, meaning it includes also logistics and administration costs. On the saw log side, however, we see that prices were largely unchanged. Most driven by the sawmills. We see that most sawmills, almost all the sawmills in Sweden, still have been running at more or less full capacity. And you can see that in the statistics, which we will also come back to when we go through the sawmill operations. This is the situation we had when we ended the year, and then came the heavy storm in mid-Sweden in January. To start with, it has limited effects on Holmen, but just to give a figure on what this is, this is roughly 10%, or 10 million cubic meters is roughly 10%. 10% of what we normally harvest in a year in Sweden in total. In our case, a bit more than 300,000 cubic meters in this area is also roughly 10% of what we in total in Holmen forest land harvest in one year. And in this area, where we have now 300,000 cubic meters laying down, it's roughly one third of a yearly harvest. What will happen to that is, of course, that that will be more local supply and exactly what kind of effect on the local market in terms of pricing for pulpwood and saw logs. That's a little bit early to say yet. But Stefan, before you talk about the result, will it cost us a lot of money to take care of the trees now laying down?

In general, looking back at what the costs have been with previous storms, we see that the added cost for taking care of these kind of volumes is approximately a bit more than 100 Swedish kronor per cubic meters. So for the next year, maybe 30 to 40 million Swedish kronor. That will increase costs in the forest division. Looking at the result for the fourth quarter, that amounts to 403 million Swedish krona. It was heavily negatively affected by a write-down of failing rights of some 160 million Swedish krona. The forest division in Holmen is not only responsible for the management of our own forest, but also for the supply of wood to our industries. The breakdown that we did in Q4 refers to felling rights concerning the sawmill operations, and as you will see later on in the presentation, the financial conditions for the sawmill are really challenging for the moment. That also meant that we needed to adjust the value of these felling rights. Underlying performance in the forest division was good in Q4, if we exclude this write-down. The result increased by some 25 million Swedish kronor compared to the third quarter, and that is mainly due to higher harvesting volumes as we harvested a bit more than 800 cubic meters in Q4. Moving over to the updated valuation of our forest holdings. As you know, we usually do this exercise every fourth quarter every year, so also this year. We own 1.3 million hectares of land. Approximately 1 to 1.1 million hectares of that is the productive forest land and it is that part that is included in this valuation. 65% of our holdings is up in the northern part of Sweden, as you see from the map to the right. 25% in the middle part and some 10% in the southern part of Sweden. Our holdings consist of more than 4,000 individual forest properties with an average size of close to 250 hectares per property. The valuation that we do is based on transactions with forest properties in the areas where we own forests. We include transactions from the last three years in our model. And as you can see from this table, that means that we have included close to 1,000 transactions in the valuation model. The average size to the right in the table of the market transacted properties is 100 hectare per property, while ours are two and a half times the size of that, and I will come back to that later on. Looking at the historical development of property prices in Sweden in general, we see that it has been quite a steady increase over time. And from 2005 up until today, the annual increase in price has been 4.3%, which is a bit more than two times the inflation during the same period. To that, of course, we should add the cash flow, etc., from the owning of these properties during this time to get the full financial result. Historically, property prices have tracked wood prices quite well. What we have seen the last couple of years is that the increase in wood prices has not yet at least been reflected in the property prices. Coming back to our forest, the value based on this updated valuation is 57 billion Swedish krona. That is a small decrease by 2% compared to the same period last year. And the decline in value is due to the fact that we this year does not include the year 2022 in our valuation model. And that particular year, prices for forest properties were higher than normal. We also do a reference valuation every year. This year it was in Västerbotten up in the northern part of Sweden where we have 370,000 hectares of land. The outcome of the external valuation were on par with our own model. There is although a size premium in the market, meaning that larger properties trade at a higher price than smaller ones. We don't include that in our model, and it has not been included in the external reference valuation either. But if we would have included it in the external valuation, prices would have been 8% higher.

Correct. But we do not take into consideration that we own forest land based on company-owned forest land either, which normally goes at a substantial premium.

Correct. So it's an upside from that perspective as well.

Okay, thank you very much. Totally different subject, renewable energy. And here we have been standing here, Stefan, for some quarters now and looked at very low prices in the northern parts of Sweden. In the fourth quarter, we saw that also prices in SC2, northern parts of Sweden, increased a bit. You will come back to what it means in terms of earnings. But I think we also should include January because... and do this in kind of two phases because it has happened quite a lot lately in the fourth quarter we can see that the difference between the different areas both germany and sc2 and sc3 it's roughly the same distance it's like a parallel shift but if we look at what has happened now in january it looks a bit different In the fourth quarter, we should add that there is a cable from SC1 in absolutely northern parts of Sweden into Finland, which has had some impact. We also know that when we were a bit negative about the outlook because we had so much water in our reservoirs, that's no longer the case. Since the autumn, the water levels are on the normal level. And right now, when we have had for some time Should we call it Arctic weather? With dry weather, there is a different situation. All of a sudden, now we have a situation where actually the marginal price for gas is setting the price for electricity in the whole of Sweden. Gas in Germany. And how can that be? Well, for some reasons. First of all, as I said... Dryer weather, less water for the hydropower installations and also the cable to Finland has had some impact. But what we also see here is that the price is fairly stable. It hasn't changed much during January, meaning no volatility or not as much volatility. For us, that means when we make money on the electricity market, especially in our paper division, it's based on volatility. When there is less volatility, as the situation is right now, we make more money. It's like a shift from paper to our energy division instead. Nobody knows how long this will stay, but it's a kind of a new situation where, again, less earnings based on volatility in the south in our paper division, but more earnings coming from our energy division. Then, Stefan, if we go back to the fourth quarter to see, did we get a premium when we were producing?

Yes, we did, as we usually do. We did run our hydropower stations quite efficiently, meaning that we can run them when prices are high and take down production when prices are lower. Harder, though, to run wind power farms. We did curtail our production from the wind power also during the fourth quarter when prices from time to time were really low. Result wise, it is an uptick compared to the loss making quarters that we've seen the last couple of quarters. As Henrik said, prices went up in the fourth quarter, but not to a historical normal level. But of course, if we compare to the situation as it has been earlier this year, it's a clear uptick. That is reflected in the result and also the fact that we had some seasonally higher production in Q4 that also gave some tailwind to the result.

Thank you. Over to wood products. I said already in the beginning I will also make wood products, but you said that a bit later. Let's start by having a look at the market. I said already in the beginning as well that the construction market is not really taking off. We can see it in the US that demand is not really taking off. Same in Germany, where demand also is not coming up really. And it's also the same when you look at production in Canada, especially in the west side of Canada, production is down quite a lot. And we can also see that in Germany, not only demand is on the lower side, also production has been on the lower side. It's one place, though, where production has not really changed. I think it's only us, more or less, that have reduced our capacity, especially at our sawmills in the south of Sweden. But if you look at the total in Sweden... North and south, still the Swedish sawmills are on more or less same production level as before. And of course that has also an effect on what I said before when it comes to saw log prices, that they haven't really changed yet. Now Stefan, we are in the beginning of the year, we are always thinking that, and they normally do, Wood products prices normally have an uptick. They go up a bit in the springtime when the retailers, et cetera, they buy before we come out there when the weather gets better and we build our verandas and other things, renovate houses. What happened this year is that, well, prices went up a bit during the springtime. But if we look at the price level right now, we are more or less on exactly the same level as we were a year ago. And the difference is that the saw logs are a lot more expensive than they were a year ago. And especially for us in the southern parts of Sweden, it's really, really difficult to get plus and minus to go together. So, given where we are and what we have done, Stefan, it's not very nice reading, but what can we say about the result? You leave it to me.

Thank you. As you said, Henrik, very challenging market condition, and it continued in the fourth quarter when prices went down a couple of percentage points, quarter over quarter. Wood costs still on the same high level as it has been during the autumn, meaning that the result wasn't nice reading and the operating profit was actually a loss of 111 million Swedish kronor.

That's it. Maybe we get a question about that a bit later. Let's move on to board and papers. And also here we see that, I also said that in the beginning, that the consumers, they are a bit cautious. But just to clarify, if we look at the bar for 22 and the bar for 23, it looks like we lost a lot of volume there. Remember, this is also... This is half of it, at least, is what we used to deliver to Russia, which is no longer in the statistics as Russia was seen as part of Europe. But you can see that in 2025, also, as I said before, it's not really taking off. We are not back to where we would like to be. And it's more or less going sideways. There is a little bit of a difference between folding box board and solid bleach board. And maybe especially for us, as we have quite a lot of solid bleach board, there is some price pressure for folding box board. I would say stable prices for solid bleach board. But I don't think anyone in this business are running absolutely at full capacity utilization rate right now. And especially if you look for marginal volumes somewhere, Of course, then it's a bit difficult to find it, first of all, and also a bit of price pressure trying to get new orders. That's the situation for board. Our order book, I should mention it. I said we take some market-related downtime also. We do that. And we have to be a bit cautious as well how we do when we try to fill our order books. If we then go to paper... Well, we have talked about structural decline for a long time, and you can see for the last 12 months it's down a bit, and it's roughly the same pattern as before, 8% to 10% somewhere there. Also here, I would say it's astonishingly stable pricing, given the huge overcapacity we can see in the market. There is also overcapacity in the board market, but here we've been used to it. But I would guess that we are running at so low operating rates, also putting kind of a floor to what can be done when it comes to pricing. And that's why I guess prices are fairly stable, because they are. And here we are doing okay. Also, we take downtime, but the rest of the market take even more downtime. And it's the same when it comes to board. We take less than the market in general. And we cannot really expect an increase in demand here. It's just to make sure that we are the most cost-competitive ones and make sure that we have the best product development in order to fill the machines with orders where we can make money. But wood is more expensive, Stefan.

It is, and the market is challenging here as well. Despite that, we report high results from the board and paper division in the fourth quarter. Partly included some higher than normal income from green certificates in the UK, and also a bit higher than normal income from emission rights. Deliveries were although quite low in Q4, mainly due to seasonality, but that also meant that we needed to curtail our production a bit more than earlier this year that took a toll on the result in the fourth quarter. Energy costs were still lower than normal in Q4, but maybe not to the same extent as what we saw in Q2 and Q3. And as Henrik mentioned, talking about the electricity market, it is more challenging as we see the market behaving today to maintain this lower than normal energy cost level in the board and paper division. But on the other hand, we gain some, or at least... Right now from the hydropower and wind power production up in the northern part of Sweden.

Well said. I think we are done, aren't we? We are, and we are happy to take any questions you might have, unless you had something more you wanted to say.

Totally fine.

Okay.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered in the queue. If you wish to remove yourself from the question queue, you may press star and two. Questionnaires on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Linus Larsson from SEB. Please go ahead.

Thank you very much and a good day to everyone. Maybe starting with board and paper who had another good quarter in the end of 2025, but I understand there were some support. You mentioned UK green certificates, the carbon emission rights. If we dissect the division just a bit and put numbers on that, Such items would be helpful, and also if you could please maybe guide us a bit into the beginning of 2026 on this.

Yes, Linus, if we take the higher than normal income from the green certificate and the emission rights in combination with the lower than normal energy cost, we see that those items together affect the result by approximately 250 million Swedish krona in the fourth quarter, quite evenly split between lower than normal energy cost and the emission and green certificate.

Great. And I mean, we've seen similar patterns in previous quarters. What do you expect for the first quarter? What is disappearing possibly?

It's very hard to predict how the energy market will trade in the first quarter, but as Henrik said, talking about the energy market, the volatility that we have gained from the last year, we don't see that high volatility in January so far, meaning that it's much harder for us to maintain this lower than normal level of energy cost. When it comes to the other items, they are quite evenly spread over the year, so there's nothing unusual on those. But it was in Q4, it was a one-off effect from those.

It's a bit weather-permitting, Linus. Sorry? No, but it's important to note that it's more of a shift right now than a loss. Volatility, without volatility, it's very difficult to make money from the volatility. On the other hand, when you have this kind of weather, then you have high prices up in the north.

And other companies have reported of... the sale of excess carbon emission rights disappearing in the beginning of 2026? Do you see the same thing in any of your mills?

Yes, we lose approximately 30% of our allotment next year as the Iggesund Brook mill is no longer part of the system due to them performing too well, actually.

Right. And if we quantify that, how much would that be in terms of tons or millions for that matter?

On an annual basis, maybe 50 million Swedish kronor.

Great. That's very clear. Thank you.

The next question comes from the line of Robin Santavirta from DMV Carnage. Please go ahead.

Thanks. Good afternoon, everybody. Can you just provide some more color about the write-down you made in the quarter? Just wondering if this is basically writing down expensive withdraw material for his own team business, or how does that work?

No, it's actually so that if you run a business that is loss-making, then you need to take down the value of your raw material stocks because you cannot use the value of it in your production units as you are loss-making. So it's more of the sawmill operations running with low result that affects this item.

okay uh but partly the reason for for their weak performance is the high wood cost totally agree they're just trying to understand whether you enter now in a way with the with lower sort of wood cost out into 2026 for this on timber business and whether we should expect sort of uh release in log pricing that is a bit bigger than what we can see in the market.

We don't see any major shift, as Henrik said, when we look at the timber market. Prices have not yet come down. We see that they have flattened out, but they are not coming down. And also you know that we have a lag in the system, meaning that any potential shift in the market, it takes some time to run through our system.

I understand. Now, can I ask, when I look at the log prices in continental Europe and availability, I mean, it's tight and the prices are even higher than in the mid part of Sweden and clearly higher in Europe compared to northern part of Sweden. Still, some of those sawmills generate profits, I understand. How does that work? Is it so that they have exposure to different segments, or what is the reason you would expect them to be bleeding with 150 euro per cubic for soil logs that we can see in many markets? What are the dynamics here that I'm missing?

I don't think you're missing anything, Robin. Still in Sweden, we have quite big differences between northern and southern parts of Sweden. And as Stefan said as well, what we are consuming now, we bought some time ago.

But it's very hard to comment on other players' financial performance, to be honest, Robin.

I'm just trying to understand the dynamics. I mean, the log prices are high, I understand that, but you would expect the end product price start to increase as the raw material is expensive across essentially Europe and in Canada as well. But I guess we need demand for that to happen.

I think we need some more demand, absolutely. But I think it's also important to note that we have said, if we go back some quarters, that there's a scarcity of soil logs, more or less worldwide. That hasn't changed so much. But right now, demand is not enough to make prices go up. But I don't think so much needs to change before you see wood product prices to start climbing. U.S. should be...

Go ahead.

The U.S. is such a place which we should have a close – we follow it closely, of course. And it's a little bit up and down every week now. But obviously, demand is not enough, even though they are very dependent on the Canadians. And they are partly dependent on us as well. And production has not increased a lot in the U.S. So we have to wait and see. But I don't think it takes so much to turn around the picture.

Yeah, okay, I understand, I understand. Final one for you guys, looking at the board and paper, now we hear from you and other, your peers that demand is still quite weak and we have more capacity, certainly in board, not in paper, but capacity utilization in both are quite weak. On the other hand, we can see energy prices, gas and power in Europe going up quite significantly now recently. How should we expect prices sales process to develop in paperboard and paper early 26.

I can only agree. You are right. Gas prices are up now a lot, and that has an influence on production cost in continental Europe, as well as in Sweden, of course, when we have these electricity prices. But also the long term trend for gas is not up, it's rather flat or sideways or maybe even down. So it depends a lot what will happen. Right now it's the weather to be honest and people are a bit scared that they will not have enough gas and all of a sudden you have a spike. And with the conditions we have right now, the marginal price for gas in Germany goes all the way through up into the northern parts of Sweden. But, of course, when we produce in paper mainly, we have hedged our electricity price. So really high gas prices, of course, it's good for us if it stays like this. But if it will, I don't really know.

But is it enough then to support pricing this combination of essentially capacity utilization quite weak across Europe and then this sort of energy prices?

You're right again. It's about cost. It's not that we are in the driver's seat because operating rate is over 90%. That will not happen. So it's about cost that you can't produce unless you get coverage for the cost. And I think it depends on how long this goes on.

I understand. Thank you very much.

Thank you.

The next question comes from the line of Palav Mehta from Barclays. Please go ahead.

Hi. Thanks for taking my questions. So firstly, on the board and paper side of things, can you just let us know the split between board and paper? And also, I mean, yes, you definitely highlight weakness in consumer paper board. Can you now give some more details around how has tariffs impacted the industry so far, given a lot of movement between June and December of last year? And do you expect any change in the near term?

A bit hard to catch your question, Pallav, but I think the first one was about the split of operating profit in the board and paper divisions. Main part of the annual result is referring to the paper division this year due to the lower than normal energy cost and also that we had two major maintenance shots in the board division. Maybe you can take the other.

Maybe we can repeat what you said about board and especially board, wasn't it?

On the board side of things, how have tariffs impacted you so far? And are you seeing any changes in the way you are interacting with your customers?

Well, our exposure to the U.S. market is quite limited when it comes to both board and sawmill and paper. So the direct effects from the tariffs is quite limited for us. It's rather the dynamic effects when people that usually exported a lot to the U.S. is taking volumes other places where Europe is a natural part for some of those. So that's more of the dynamic effects that affects Holmen rather than the direct hits from tariffs.

Sure. And if I can just ask one on your balance sheet and the returns you shared earlier for your... Netbed EBITDA leverages now around 1x, but I don't see any incremental share repurchases or any plans. So can you just comment on that? What are your plans with capital returns?

If it was CapEx next year, or is it for maintenance? Let's start with CapEx, we can take both of them. I think you can expect CapEx to be much lower next year compared to 2025, when we have the wind farm in Blisterliden being built. So maybe a bit higher than 1 billion next year in CapEx is reasonable to assume. When it comes to maintenance shot, we have one shot in the Igesund mild next year, which we have annually. It's in the third quarter, and the estimated effect on the P&L is 150 million Swedish krona.

Correct. Thank you.

The next question comes from the line of Lindström Oskar from Danske Bank. Please go ahead.

Yes, good afternoon, guys. Two questions from my side. First off is coming back to this issue of the gas price spike that we've seen in Europe and the effect it's had. How quickly does that have an impact on the cost for producers in continental Europe? What's your sort of understanding of how quickly that feeds in or does it take a long time or is the spot price relevant? That's my first question.

I think it has an impact quite fast actually because you take business today that you are supposed to deliver in two to three months normally. You have to take a decision today and make your best forecast. What will be your energy cost when you are about to produce and deliver? So, in that sense, it has an impact already now that all producers, dependent on gas for their production, should be a bit more cautious. What the end effect will be, I don't know, and how long it will stay like this. Well, the longer the better for us, of course, but that's a bit more difficult to understand.

Just a follow-up on that.

A follow-up. Have you seen any tendency... among your competitors to essentially raise their prices in reaction to this?

I can't say we have seen that yet, but... But you're an expert.

The second... By asking you. The second question is on board. And, I mean, you operate in... you know, to large part in solid bleach board, which is sort of a niche premium segment within the overall board market. It doesn't seem to have been impacted by the type of sort of increased Asian competition in export markets, which we've seen impacting the liquid packaging board niche segment. Should we expect the solid bleachboard market to be sort of immune to this wave or waves of Asian capacity and competition?

I think you're right when it comes to that part of the business. But as I said before, we are not running... totally full either we take some market related downtime and if you want to get an extra order as a marginal order it's very difficult especially if you try to get it from asia but we have not been affected directly but indirectly you can say we do feel the competition if i may ask roughly how much of your board or of your solid bleach board is exported outside of europe

goes to Asia, in effect?

It's a good but difficult question, because we have quite some deals which we make in different continents than where we deliver the volumes. And again, once they are there, they are sold somewhere else in the world. So we deliver quite a lot to Asia, but it's not Asian business.

Right. But you don't feel that we as analysts or people as investors need to be thinking that you could very, you know, a lot of your current SBB volumes are being very, very challenged in the way that we've seen in liquid packaging.

Not yet. Not yet.

All right. Well, thank you very much. Those were the two questions that I had. The other ones have been answered already. Thank you. Thank you.

The next question comes from the line of Muir Sanz-Charlie from DNP Paribas. Please go ahead.

Yes, good afternoon. Thank you for taking my questions. It's Charlie here. I just wanted to follow up on a question that wasn't fully answered before around capital allocation. You have not declared any extra dividends this year. How are you thinking about balancing your leverage and capital allocation beyond the 9.50 increasing? between potentially an exorbitant loan at a later date or a buyback?

No, we feel that we have a good position, the one we have right now when it comes to our financial position and the 10% net debt is fine. But we would never, ever jeopardize anything when it comes to our financial strength. If anything comes up that we think we should spend money on. And given the challenging situation in the market, but also that we are in a fairly good position, we find that an increase, it's 5-6%, it's not that small increase, it's balanced given the situation we are in. There are also some uncertainty in the world that we don't have in our own hands. So that's why we landed in today proposing a dividend of 950 and no extra dividend as we see things right now.

Understood and then the second question I have is with respect to the pulpwood price as you indicated the delivered cost for you is only just a little bit but clearly some of the stumpage prices have started to fall quite significantly now. Which quarter in this coming year do you anticipate it starting to manifest as a particular material tailwind in your input costs? And the same question, I guess, if there's any signs at all on the movement on stumbling on logs as well. Thank you.

But as you say, pulpwood prices are coming down. We have changed price lists a number of times already now, but that's not the same as that you have bought a lot to cheaper prices. But I think you should wait a little bit to see what happens with this storm and the It's rather big volume, to be honest, at least, outside our Iggesund mill, to be honest. Laying there, we move our capacity, and we do the deals right now to see where the price will land. That will have an effect locally at least, how that will spread, and if it will make things go faster when it comes to especially pulpwood coming down, most likely, but how much it will spread and how far down it will go, it's too early to say.

Okay, thank you very much.

The next question comes from the line of Cole Aker from Jefferies. Please go ahead.

Awesome. Thanks for taking my question. I'd just like to follow up on the chart you put out on slide. 13, looking at the price of forest properties and the nominal wood prices. Just so I understand this, you made the comment that forest prices didn't rise as much as the nominal saw log and cycle. Are you trying to imply that potentially if we see some downward pressure on saw logs or pulpwood, you would hope that forest property transaction realities would be more resilient? I'm just wondering how you're thinking about it into 2026, considering we are seeing pulpwood prices at least lower.

As you know, we base our evaluation of our forest on deals made by people out in the transaction market. How they will behave is quite tricky to digest. What we see is that the last couple of years, increase in wood cost has not been reflected in the behavior from the buyers of forest properties paying a premium based on that. So we have a larger spread now between the wood cost and the property prices than what we've seen historically. How that will play out in the long run, I think we have to wait and see, as Hendrik said as well when he commented on pulpwood and timber prices.

but maybe also you can say that well wood prices can come down quite a lot before it should have an impact on property prices going down you can do that as well that's helpful just to understand uh forest prices might be a little bit stickier um then i've got another two my side the first is on um on board prices i know you less folding box board i'm just wondering is there any kind of rough estimate you can give on what is the decline you've seen on kind of your pricing segment, just how we think about into 2026. I mentioned some pressure, but some help on the quantum would be useful. And then I'd just like to follow up on the soiled wood industry. I know profitability is really challenged today. I'd just like to understand if you've got any color from the players in Central Eastern Europe at all around any closures or any shuts that you're seeing there or capacity curtailments in Central Eastern Europe.

Shall we start with the pricing of FPB and SPB? As you know, Cole, our prices and the prices in the segment overall tends to be quite sticky. We have not seen any movement hardly at all during 2025. And there's no big movement in our prices for the moment. But as Henrik said, if we want to sell an extra ton of things, then we need maybe to lower the price a bit. But in general, they're quite sticky.

And solid bridge board, it's more like a niche and prices move very slow in case they move. Falling box board moves a little bit faster.

The other one was about sawmill operations in Eastern Europe, I think, and potential closure there.

You saw the slide before when it comes to Germany that sawmills are taking down production quite a lot, actually. But if they close or not, I really don't know.

Thank you.

The next question comes from the line of Hendrik Bertens from ABC. Please go ahead.

Hi, this is Henrik from ABG. Sorry if I missed this, but have I understood correctly if hydro and wind power are not hedged, i.e. the current higher energy prices could imply a quite large positive effect in Q1? And could you also please remind me on the season volumes or the weather in Q1? Are there typically more or less wind, and have you seen anything special so far in Q1? Thank you.

The first one I did catch, it was if we were hedged or not. And we have no hedges in place for our energy division, so we are trading at spot prices. The other one... It was about the weather.

It's cold in Stockholm. No, but I think also remind ourselves, we started up the Blister Leading Wind Farm just before the new year. And that timing was good given the situation we have right now. But as I said before, right now it's stable winter weather, almost Arctic weather with It's dry weather. There is not so much water in the reservoirs, meaning hydropower is extremely important to keep stability in the grid. And there is enough capacity that can be transmitted. So the volatility is low, both in northern parts of Sweden and southern parts of Sweden right now. But prices are high. It's also less wind when you have high pressure. But remember, we are not meteorologists. We are only normal business people. As it looks now, it can stay like this at least for a couple of weeks. But the weather has changed before.

Perfect. Understood. Thank you.

The next question comes from the line of Masvula Ioannis from Morgan Stanley. Please go ahead.

Thanks very much for the presentation. I apologize, I joined a bit late, so I might be repeating some of the questions. The first one I had, just going back to the storm Johannes and the impact it had to your business, you talked about... the timber cells and how much of that's going to impact cost. That was clear. It's just a question for me to understand in terms of the implications for the overall harvest volume. So I guess you might move some of your resources towards some of your third-party forest owners as you try to support them. What sort of impact could that have to your harvest volumes in Q2, Q3, and could that extend into the second half, or do you think it's more of a temporary situation? Thank you.

It's more of a temporary thing, but we have not done the complete analysis on how we will deal with these storms effect, but it should be possible to take care of it in the normal operation, meaning that it should not affect our annual harvesting. But we need to do the analysis a bit deeper and need to come back to that in the next presentation, I think.

But you're right, it takes a bit more hours to take care of trees laying down rather than standing up. I said we are a company with capacity, so it shouldn't be the biggest problem for us.

Great, thanks for that. Second question, just again on the forest. When I looked up I can realize prices if I look at revenue divided by volumes in the forest segment. It feels like there was quite a big step down quarter over quarter. And I know there is a lot of sort of trading volumes in the forest segments. So trying to understand if there are any particular aspects to consider for Q4 that might not repeat in the coming quarters.

No, the prices were quite stable quarter over quarter if we look at the sales price that we get from the harvesting of our own forest. If you do the calculation as you did, as you said, it's a lot of timber trading included in that, so it's hard to do that interpretation.

I see, okay. And then turning over to the sawmills where... Performance and earnings have been under quite some pressure for some time. If we think about Q1, I guess with the lag effects, SOLOX are probably going to be even a bit more expensive in Q1 versus Q4, and pricing for some of the products is not improving. Shall we expect profitability in Q1 to be even worse? And in that case, how are you feeling about your operating rates there?

All right. Well, we have taken down volumes during the autumn, as you know. We've taken down shifts in the Braviken mill in the southern parts of Sweden and adjusted at the other swarming as well. How things will play out in the Q1, as Henrik said, it happens from time to time. The prices actually increase when we enter into spring season. But it's very hard to predict what the price will be.

Wood costs should not go up.

Wood costs should not go up, but probably not go down either, so...

And you're talking about Q1, what costs not going up? More or less Fletish. Okay, okay, perfect. And then the very last one for me. I don't know if you mentioned at all any energy sort of optimization or trading games in the graphic segment that you could talk about?

Well, we said that we had some extra income from green certificates in the U.K., some higher than normal income from emission rights and also as earlier this year lower than normal energy costs but not to the same extent as we saw in q2 and q3 total effect of all this item is approximately 250 million swedish krona in the fourth quarter perfect thanks very much thank you

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Henrik for any closing remarks.

Thank you very much. Good questions, good discussion. Look forward to see you soon again. Thank you. Have a nice weekend.