Svenska Cellulosa Aktiebolaget SCA (publ)

Good morning and welcome to this presentation of SEA's 2025 first quarter results. With me here today I have President and CEO Ulf Larsson and CFO Andreas Everts to go through the results and take your questions. Over to you Ulf.

Thank you Anders and also from my side good morning and a warm welcome to the presentation of our result for the first quarter 2025. During the first quarter, SEA again showed that we can deliver good profitability even in the continued challenging environment. SEA's high degree of self-sufficiency in wood raw materials mitigated a big part of the higher cost related to wood supply and we reached 1.65 billion SEK on EBITDA level and by that an EBITDA margin of 32% for the quarter. During the first quarter, SEA had strong delivery volumes, not least in the wood segment due to productivity improvements. In other segments, the volume increase has been supported by the ramp-up of strategic investments, and these investments will contribute to increased productivity and cash flow generation during upcoming years. Prices in SEA's industrial segments were generally higher in Q1 2025 than in Q1 2024, and I expect these price increases that they will further contribute to earnings in the second quarter. Global uncertainty has increased with the US tariffs. This also affects the global demand and business climate, and I will give some comments on each segment as we go through the presentation. Turning over to some financial KPIs for the first quarter of 2025. As already said, our EBITDA reached 1.65 billion SEK during the first quarter, which corresponds to a 32% EBITDA margin. Our Industrial Return on Capital Employed came out at 8% for the first quarter, counted as the average for the last 12 months. The leverage was at 1.5 and we have now finalized our big strategic investments in Obola, Utviken and Gothenburg, which will, as already said, contribute positively coming years. Then I will make some comments for each segment, starting with forest. Stable harvesting levels from our own forest have contributed to a stable supply of wood, raw materials to our industries during the period. We have seen a continuous long-term trend of increasing prices for both pulpwood and saw logs as can be seen in the graph on the bottom left. When one compared Q125 with Q124 sales were up 15% and that was mainly due to higher prices for pulpwood and saw logs as well as higher delivery volumes to our own industries. When excluding the effect of capital gains for Hemvallen in Q124, approximately 130 million SEK, EBITDA was up 4%, mainly due to higher prices for pulpwood and saw logs, but also due to higher delivery volumes to our own industries. Turning over to business area wood. In general, we still have a slow underlying market for solid wood products. Despite the generally low demand, we continue to see some signs of improvement in the repair and remodeling segment where SEA is present. The uncertainties in the general economic development have, however, increased due to the tariff discussion between the US and other countries. So far, no tariffs are added to Swedish export of solid wood products to US. Stock levels are slightly higher among producers, but mainly on the low side at customers. As estimated, the price for solid wood products increased with low single digits in the first quarter of 2025 in comparison with the fourth quarter of 2024. Our deliveries last quarter were strong, but our production was also at the high level, resulting in a, for SEA, close to unchanged stock level of zone goods. As expected, the cost for SOLOGS has increased from the fourth to the first quarter and we also expect them to continue to increase going into the second quarter. Sales were up 37% and EBITDA was up 113% in the first quarter of 2025 in comparison with the same period last year. That has been driven mainly by higher prices but also by higher delivery volumes. Debit day margin consequently increased from 10 to 16 percent. Today's stock level of solid wood products in Sweden and Finland is described at the top left on this slide and is shown in relation to the average for the last five years. As mentioned earlier, we note that the inventory is at a slightly higher level than normal among producers. That is mainly related to the pine. As can be seen in the diagram to the bottom left, the Swedish and Finnish showmiss production has been on normal levels in the start of 2025. In the diagram to the top right, we can see small price increases during the start of the year and with a somewhat stronger development for sprues. Going into the second quarter of 2025, I estimate that the price will continue to increase by close to 10%, driven mainly by cost increase for Zoologs, but held back due to the currency development. In the construction sector, we can conclude that the starts of new building continue to be low, while consumption in repair and remodeling sector will be early to respond in a positive way to lower interest rates. so over to pulp when one compared q125 with the first quarter 24 sales were up nine percent mainly due to higher delivery volumes ebta was flat compared to last year mainly due to higher cost for wood draw material and low prices for ctmp mitigated by higher prices for mbsk Global demand for pulp was at a healthy level during the first quarter and we saw increasing prices on all markets. However, the weakening of the US dollar have had a negative impact on the price in local currencies. MBSK prices reached the bottom in Europe in January at US dollar 1480. Today we are around 1600 US dollar per ton after three consecutive months of increasing prices. In the US, MBSK prices have had a similar development to Europe. In China, MBSK prices reached the bottom in the summer of 24 at $710 per ton net. We then saw increasing prices up until March this year when the price reached $810 per ton. And so far in April, the market is in, let's say, wait and see mode. Regarding tariffs, all pulp supplies exported to the US, except for Canadian producers, are currently subject to 10% tariffs. Canada and Europe are the main suppliers of MBSK pulp for the US market and SEA are at risk of losing market shares if having higher tariffs than Canadian suppliers over time. Looking at CTMP, prices have been unchanged in Asia at low levels, but increasing slowly in Europe during the first quarter. Inventories of softwood and hardwood pulp are on normal levels, as you can see in the diagram. CTMP inventories, on the contrary, still are on the high side. Moving over to container board. Sales were up 2% in Q1 in comparison with the same period last year. We can note higher prices on the positive side, while lower volumes had a negative impact. EBITDA was up 70% due to higher prices, which was partly mitigated by higher costs for wood raw material and negative currency effects. We've seen box demand developing positively during last year and into 2025, and by that we are now almost back to historical growth trend levels. We've seen an improved retail demand supported by increasing consumer confidence, which should support the continued growth in box demand over time. On the other side, we continue to see negative growth in the European manufacturing industry, which for the moment drives the demand in the segment in a negative direction. The European demand for container board has moved sideways in Q1 compared to the same period last year. Due to the current turbulent macro environment, it's difficult to predict the long-term impact on demand. With regards to tariffs, we expect the direct impact on our business in container world to be relatively small. The potential impact mainly comes from the effect of tariffs on the overall business environment. Craft dining inventories are slightly above average level in Q1, but trending downwards. The availability of OCC has in the later part of Q1 tightened, although prices have remained stable. Moving into Q2, we will see the prices of OCC substantially moving upwards, mainly driven by availability. European prices for brown craft liner increased in Q1 by 40 euro per tonne, and white craft liner has during the same period decreased by 10 euro per tonne. SEA will increase white craft liner prices in April by 40 euro per tonne and we now feel a more solid underlying demand in combination with strong cost pressure and due to that we have recently announced another price increase of 60 euro per tonne in both brown and white craft liner from 1st of May. So finally renewable energy. In business era renewable energy, we have had a weaker quarter compared to the same period last year. The market for solid biofuels remained stable. Higher prices for sawdust in our pellet business were met by higher prices. In line with previous quarters, the green premiums for tall oil and liquid biofuels are substantially lower in comparison with the same period last year. As mentioned before, main reasons are lower blending mandates in Sweden and increased imports from China, creating an imbalance in supply-demand in the renewable fuels market. We expect market volatility in renewable fuels to remain high as Europe ramps up the blending mandates both in HVO and SAF. Long term our outlook is positive, but in the short term we expect continued low refining margins and biopremiums. The small recovery in biofuel prices we saw at the end of Q4 impacted Q1 positively. However, with the current geopolitical landscape and decline in oil prices, we expect the market to be challenging going forward. Electricity prices were low during the quarter, which impacted our wind business negatively. SCA continues to grow. in land lease for wind power and has reached 9.7 terawatt hours of wind power on SAI land by the end of Q1. That is equal to 20 percent of installed capacity of wind power in Sweden. And finally I can mention that execution of our windmill project Fasikan is progressing according to plan. And by that I hand over to Andreas. Thank you.

Thank you, Ulf, and good morning, everybody. I'll start off with the income statement for the first quarter. Net sales increased 13% to just below 5.2 billion, driven by higher volumes and higher prices. EBITDA increased 3% to 1.65 billion, driven mainly by higher prices, which was partly offset by higher costs for wood, raw materials. The EBITDA margin was 32%. EBIT increased to 1.1 billion, and financial items totaled minus 114 million. An effective tax rate around 20%, bringing net profit to 800 million, or 1.14 SEC per share. On the next slide, we have the financial development by segment. Starting with the forest segment to the left, net sales increased to 2.5 billion, driven by higher prices and higher deliveries to SCA's industries. EBITDA decreased to 879 million due to seasonal low harvest from SCA's own forest compared to the previous quarter. Our prices for wood, raw materials continue to increase. In wood, prices were slightly higher compared to the previous quarter. Net sales increased to 1.5 billion and were positively impacted by higher delivery volumes. EBITDA was in line with the previous quarter and amounted to 236 million, corresponding to a margin of 16%. Higher prices and higher volumes were set by higher costs for wood raw materials. In pulp, net sales decreased to 1.9 billion compared to the previous quarter, while EBITDA increased to 320 million, corresponding to a margin of 17%. Lower costs for planned maintenance stops were offset by lower prices and negative currency effects. In Container Bar, net sales increased to just below 1.7 billion, and EBITDA was in line with the previous quarter and amounted to 239 million, corresponding to a margin of 14%. Lower prices and negative currency effects were received by lower costs for planned maintenance stops and higher delivery volumes. The market for renewable energy continued to be weak. EBITDA increased compared to previous quarter amounted to 134 million, corresponding to a margin of 22%. The increase was driven by seasonally higher deliveries of solid biofuels and higher results in liquid biofuels, while electricity prices continued to be low. On the next slide, we have the sales spread between Q1 last year and Q1 this year. Prices increased 6%, with higher prices in wood, container board, and MBSK. Volumes increased by 8%, driven by higher volumes in wood and pulp. And lastly, the currency had a negative impact of 1%, bringing net sales to just below 5.2 billion. Moving on to the EBITDA Average, and starting to the left, price mix had a positive impact of 325 million, and higher volumes had a positive impact of 64 million. Higher costs for mainly wood, raw materials had a negative impact of 147 million, with a marginally positive impact from energy, and a marginally negative impact from currency. Last year, we also had a capital gain of 128 million from the sale of Henvollen. In total, EBITDA increased to 1.65 billion, corresponding to a margin of 32%. Look at the cash flow. We had an operating cash flow of 485 million in the quarter. And as you know, other operating cash flow relates mostly to working capital currency hedges, and should therefore be seen together with changes in working capital. Look at the balance sheet. The value of the forest assets totaled 107 billion. Working capital increased to 5.6 billion, mainly driven by higher volumes, currency and VAT receivables. Capital employed increased to $116 billion, net debt stood at $11 billion, and equity totaled $105 billion, corresponding to net debt to equity of 11%. Thank you. With that, I'll hand back to Julf.