Holmen AB

Good morning, everybody. Welcome to the interim report presentation for the Holman Group. It's me, Henrik, and Stefan that will go through the presentation. And after that, we take questions like we normally do. Let's start with the result in the third quarter. Well, cautious customers and not a very strong market for construction. And on top of that, a maintenance chat made result land on roughly 550 million crowns. We will come back to the different business areas during the presentation. Before that, just to mention that we had a strong cash flow and we are also having a very strong financial situation like before. Then let's move on to forest and the wood market. You know, we talked about declining wood prices for some time. And when you look at the chart here, it's what we pay for the wood to our industry. And you have to remember when you look at the chart here that our prices are affected by the storm and how much we have harvested in a storm affected areas during this period, especially this year. On average, wood prices are down roughly 10%. The big question going forward is to understand where wood prices will go from here. Right now, we have a feeling that they are more or less standing still. But when we look at especially pulpwood, for example, in the Baltic states, we do see that prices are actually ticking up a little bit. So again, the question is, where will it be? when we look forward. As you know we have a situation in Sweden today where we actually have too much of industry capacity and not enough harvesting. It's a structural deficit of wood where we stand. Then we talked about the storm. For us, it has not a big effect on the result, Stefan. I think that's enough to say. We do relocate quite a lot of our own resources, so we harvest a bit more in the storm-affected area, also on other people's land, other forest owners' land. But in total for us, and especially when you look at the cost, it's no big deal.

It's not, Henrik, and if we look at the result for the third quarter, we reported an operating profit of just above 440 million Swedish kronor. That's a slight decrease compared to previous quarters due to the lower selling prices for both pulpwood and timber, as Henrik mentioned. Also, harvesting costs were on the same level quarter over quarter, but they are a bit inflated due to the storm that we had, and we need to take care of these storm fellings on our own forests, which is a bit more expensive than normal harvesting. Finally, I can also comment on the harvesting levels, which was slightly higher quarter over quarter, but still we anticipate full year's harvesting to be a bit lower than normal, also that due to the storm that we had in the beginning of the year.

Thank you. Something totally different, renewable energy. I think we should start by commenting a little bit about the situation in Europe. We are again coming into a period where we see gas prices on the rise. And of course, it has an impact on the European cost competitiveness in total. And well, we know that in the US, gas prices are on the same level as before. And we know in China, they are not even using the gas. They have the coal. But the situation for us as a producer of electricity is We had a period last year where prices in northern parts of Sweden were extremely low due to mainly too much water in the system. Now, in the beginning of the year, we had a fantastic quarter if you produce electricity, but prices were extremely high. And right now we are in a situation where, well, northern parts of Sweden, it's roughly half the price as in SC3, where we consume all the electricity. Still, SC3 is roughly half the price as we see in continental Europe. So for Europe, this is really a tough situation. But for us as a producer... Well, we will see and it will not take that long before we will see new consumption electricity coming also up in the north. And we also have new transmission capacity coming on stream. But it will take a bit. And that's not exactly where we are now, even though prices were a bit better in the third quarter. We talked about Europe just to remind ourselves. SE3 is partly connected also to Germany. Sweden and Norway are the only places in Europe where we actually have more electricity than what we consume at the moment. We export quite a lot. But what you see on this chart is that the industry in the southern parts of Sweden, we do actually import German prices at daytime in the third quarter when the sun is shining. In the dark hours, so to say, well, we have a cost advantage in southern parts of Sweden versus Germany. But producing electricity up in the north, you can see we are not affected almost at all compared to SC3 and what happens in Germany. All right.