Holmen AB

Good morning and welcome to the Interim Report presentation for the Holmen Group. It's me, Henrik Sjölund and Stefan Laurén. We will go through the presentation and as we usually do, we take all the questions you have after the presentation. So let's start. Well, in the second quarter, first of all, the result, we were able to produce a really good result, at least a solid result, quite similar to the previous quarters. If you look at the years, though, we can see quite big changes between last year and this year, especially in the beginning of this year, we had a really good contribution from our energy division. And now in the second quarter, we also see good deliveries from board and paper. Our financial position is strong and during the first half of the year we've also distributed roughly 2.5 billion SEK to our shareholders through dividend and buybacks. Let's start with our forest division or let's say the wood market and the situation right now. It's clearly so that we have lower wood prices and if you compare the peak towards what we buy at currently it's roughly 10%. But then you should remember that we have discussed it a number of times that we also have a backpack with wood we have bought at higher prices before and it takes time to consume that. As things are today, we also had a storm in the beginning of the year. In our case, that means that in total, first of all, it was roughly 10 million cubic meters. In our area, roughly half a million, which is roughly half a year's harvesting. And in this area, of course, prices are lower than the normal market, so to say. And we have consumed a bit of storm-filled timber and pulpwood already in the second quarter, and there will be some more in the third quarter. But it's, of course, also a temporary effect, which prolongs the... It takes longer also to consume what we had in the backpack, because now we are more occupied with the storm-filled timber and pulpwood.

Stefan is there any extra cost for this when it comes to our own forest? Yes it is as we communicated earlier we will have increased harvesting cost due to the storm and that's also what we see in the result for the second quarter approximately 10 to 15 million krona higher in the second quarter than normal that partly explains the decrease in result from the forest division Also, prices came down for this division, of course, as prices are going down both for pulpwood and for saw logs. And finally, the storm has made us relocate part of our harvesting resources from the northern part of Sweden to the storm region. And there we take care of storm fellings, of course, on our own land as Henrik described, but also on other people's land that has been affected by the storm. And that makes our own harvesting a bit lower than normal. And that level will maintain throughout the year, I would say.

Thank you. Changing to something totally different, renewable energy. You know that we have had during last year and some time before as well, quite difficult situation when it comes to, or let's say, very different price levels when it comes to northern parts of Sweden, southern parts of Sweden, and not the least versus Germany. We should remember, though, last year, if you look in the Nordic system, it was roughly 20 terawatt hours more than water in the system than what we normally have. And if you look at the situation this year, it's the opposite. It's roughly 20 terawatt hours of water, less in the Nordic system. Not so much less water in Sweden, actually more in Norway. In the first quarter, as you can see, when we had really cold weather for a couple of months in most of Europe, prices went together and there was hardly any difference between Germany and the different parts in Sweden. In the second quarter, still prices are on a more reasonable level. More normal level, roughly 400 megawatt or sec per megawatt hour. But of course, the system is still sensitive to the hydrological balance and the kind of weather we have. And we are lacking a bit of transmission capacity to make sure that the electrons can be used wherever they are needed, especially within Sweden. If you look at what we have earned over the years, yes, the market is volatile, but as an average, we have made a cash flow of roughly 330 SEK per megawatt hour over the years. Will this stay in the same way? Well, I don't think so. It might take some time, and we have discussed it before, but over time, there is... especially in the northern parts of Sweden and Norway, where you have access to not only electricity, but also green electricity, which is needed for Europe. And when we look at what is about to happen, it's new industries, but it's also AI data centers, etc., which we see coming. But it's not coming tomorrow. It takes some time. We are also active ourselves, especially in Europe. helping companies to make sure that they can produce, for example, an AI center up in the northern parts of Sweden. Also in other parts, to be honest. Stefan, that means that we