Svenska Cellulosa Aktiebolaget SCA (publ)

Good morning and welcome to this presentation of SEA's 2025 half-year 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 for that, Anders. And also from my side, good morning and warm welcome to the presentation of our results for the second quarter 2025. During the second quarter we continued to deliver good profitability in a challenging environment and our high degree of self-sufficiency in strategic areas mitigated higher costs, not the least related to wood-raw materials. We reached a bit over 2 billion SEK on EBITDA level and by that an EBITDA margin of 38% for the second quarter. In the quarter, SEA had higher prices and a really strong production, good delivery volumes in both wood and container board. The volume increase has not the least been related to Bålsta sawmill and Obola container board mill, where we have performed strategic investments. Due to higher availability in production in our container board mills, we also generally noted a lower specific cost level in the second quarter. And all strategic investments will step by step contribute to increased productivity and cash flow generation during upcoming years. Global uncertainty remains driven by discussions around new and changing tariffs. This clearly affects the global demand and business climate in a negative way. Especially the pulp market has been hit so far. Turning over to some financial KPIs for the second quarter. As already mentioned, our EBITDA level reached a bit over 2 billion SEK, which corresponds to 38% EBITDA margin. Our industrial return on capital employed came out at 8%, counted for the last 12 months, and the leverage was at 1.8 times, and our net debt to equity reached 12.5%. I will now make some comments for each segment starting with forest. Higher 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. Although we now feel that the market for mainly pulpwood cools down, at the same time we will have a lagging effect until we get the full impact cost-wise. When one compared Q2 2025 with Q2 2024, sales were up 14%, mainly due to higher prices for pulpwood and saw logs, as well as higher delivery volumes to SA industries. EBITDA was up 21% mainly due to higher prices, higher harvesting of own forest and higher delivery volumes to SEA industries. Turning over to business area wood. In general, we still have a slow underlying market for solid wood products. Despite the general low demand, we have noted signs of improvement in the repair and remodeling segment this year in comparison with last year. The uncertainty in general economic development continues to affect the market recovery negatively. Stock levels are on the high side among producers, but we believe mainly on the low side at customers. The price for solid wood products increased by 4% in the second quarter, in comparison with the first quarter 25, although the increase has been almost double, counted in local currencies. Our production level was very good during the quarter, but deliveries were even stronger, resulting in a decreased stock level of sown goods for SEA. As expected, the cost for saw logs has increased from the first to the second quarter and we also expect them to continue to increase going into the third quarter. Sales were up 15% in comparison with last year. The EBITDA margin reached 18% in the second quarter, driven mainly by higher prices and higher delivery volumes. 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 on the high side in general, while the SA level is rather normal. As can be seen in the diagram to the bottom left, the Swedish and Finnish sawmill production have been on a rather normal level in the first five months of 2025. In the diagram to the top right, we can note that the price increased during the second quarter with a somewhat stronger development for spruce. Going into the third quarter of 2025, I estimate that the prices in average will decrease with up to 5%, somewhat more for pine and somewhat less for spruce. This is driven by the higher availability of pine products. In the construction sector, we can conclude that the start of new buildings continues to be low. As said before, uncertainties are still present, but we see improved consumption in the repair and remodeling sector, which is early to respond in a positive way to lower interest rates. Over to PALP. In comparison Q2 2025 with Q2 2024 sales were down 16% mainly due to lower delivery volumes and lower prices. EBITDA was down 49% compared to last year mainly due to higher costs for wood raw material and lower prices. Global demand for pulp was at a healthy level during the first quarter of 2025 and we saw increasing prices on all markets. Anyway, during the second quarter the market changed with reduced demand and prices came under pressure, much due to uncertainty related to US tariffs that were introduced in the beginning of April. The weakening of the USD had, in comparison with Swedish currency, a negative impact on the price in SEC in both Q1 and Q2. MBSK prices increased during the first quarter and reached 1600 USD per tonne in Europe in April. Today we are around 1510 USD per tonne after three consecutive months with decreasing prices. In the US, MBSK prices have had a similar development as in Europe. In China, MBSK prices have fallen from 8.10 USD per tonne in March to 6.80 USD per tonne today. And in real terms, they are today on historically low levels. Regarding tariffs, all pulp supplies exporting to US except for Canadian producers are currently subject to tariffs. Canada and Europe are the main suppliers of MBSK pulp for the US market. Europeans are of course at risk of losing market shares in the US if having higher tariffs than Canadian suppliers over time. Looking at the CTMP, prices have been unchanged in Asia at low levels and decreasing slowly in Europe during the second quarter. Inventories of softwood and hardwood have been increasing in April and May, as you can see in the diagrams, and they are now on the high side. CTMP inventories, on the contrary, have been reduced during the second quarter. So, moving over to container board. Sales were up 15% in the second quarter in comparison with the same period last year, driven mainly by higher prices and higher delivery volumes and high production. EBITDA was up by 95% driven by higher prices, higher delivery volumes, lower cost related to strong production. The positive effect was partly mitigated by higher cost for wood raw materials and negative currency effects. We have seen box demand developing in a positive way during the first half of 2025, although slowing down in the later part of Q2, but still almost back on the post-pandemic growth path. The retail business remains a positive driver of growing 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 a negative direction. The European demand of containerboard has increased in Q2 compared to the same period last year. Although due to the current turbulent macro environment it's difficult to have a view on the long-term demand. In Q2 the supply-demand balance has been impacted by additional test liner capacity coming on stream. In Q3 we expect no further increase in capacity. Craftliner inventories remain above average level as you can see in the graph. During the second quarter the availability of OCC tightened and we saw prices increase significantly. Moving into Q3 we see the availability of OCC moving into a more balanced situation and prices are sliding downwards. Prices for brown and white craftliner increased in Q2 by 40 euro per tonne in Central Europe. So last but not least, renewable energy. In the business area of renewable energy, we've had a quarter in line with the same period last year. We delivered a healthy EBITDA margin of 18% during the second quarter. The market for solid biofuels has weakened due to warm winter and by that lower power prices. For liquid biofuels, we see margins improving from low levels during the end of the quarter. Main reasons are increase in oil prices, European countries implementing RED3 and better control mechanism within EU. We expect market volatility in renewable fuels to remain high as Europe ramps up the blending mandates both in HVO and SAF. Electricity prices were extremely low during the quarter, which impacted our wind business negatively. SEA Landly's business is stable at 9.7 TWh, which is equal to 20% of installed capacity of wind power in Sweden. And finally, I can also mention that the execution of our windmill project Fasikan is progressing according to plan. And by that I hand over to Andreas.

Thank you Ulf and good morning everybody. I'll start off with the income statement for the second quarter. Net sales increased 2% to just below 5.4 billion, driven by higher prices and higher volumes. EBITDA increased 8% just below 2 billion, driven mainly by higher prices, which was partly offset by higher costs for wood, raw materials. The EBITDA margin was 38%. EBIT increased to 1.5 billion, and financial items totaled minus 114 million, with an effective tax rate of around 20%, bringing net profit to 1.1 billion, or 1.55 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 for wood, raw materials. EBITDA increased to just below 1.1 billion due to seasonally higher harvest from SCA's own forest and higher prices compared to the previous quarter. In wood, Prices increased compared to the previous quarter, while the cost for soil logs continued to increase. Net sales increased to 1.7 billion, driven by higher volumes and higher prices. EBITDA increased to 310 million, corresponding to a margin of 18%. In BALP, net sales decreased to 1.8 billion driven by lower delivery volumes and negative currency effects. EBITDA decreased to 261 million, corresponding to a margin of 15%. In the quarter, we had a negative impact from a planned maintenance stop of 25 million. In Container Board, Craftliner prices increased during the quarter, net sales increased to 1.8 billion, and Ibinta increased to 451 million, corresponding to a margin of 25%. The result was positively impacted by higher prices and lower ramp-up costs in Obola. The market for renewable energy continued to be weak. EBITDA decreased compared to the previous quarter and amounted to 87 million, corresponding to a margin of 18%. The decrease was mainly driven by seasonally lower demand for solid biofuels. On the next slide, we have the sales pitch between Q2 last year and Q2 this year. Prices increased 3%, with higher prices in wood and container board, which was partly offset by lower prices in pulp. Volumes increased 1%, driven by higher volumes in wood and container board, which was offset by lower volumes in pulp. And lastly, current selling a negative impact of 2%, bringing net sales to just below 5.4 billion. Moving on to EBITDA Average and starting to the left, price mix had a positive impact of $174 million and high volumes had a positive impact of $76 million. High cost for mainly wood raw materials had a negative impact of $77 million, which was mitigated by our high degree of self-sufficiency. with a positive impact of energy of 55 million and a negative impact from currency of 106 million. In total, EBITDA increased just above 2 billion, corresponding to a margin of 38%. Looking at the cash flow, operating cash flow increased to 953 million for the quarter and 1.4 billion for the first half year. 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 just below 108 billion. The first half of the year has seasonally few transactions, and we therefore left the three-year average price used in the forest valuation unchanged. Working capital increased to 5.9 billion, driven by higher volumes and higher prices. Capital employed totaled 170 billion, and net debt stood at 13 billion. And we have now almost finalized our large ongoing investment projects. Equity totaled 104 billion, and net debt to equity was 13%. Thank you. With that, I'll hand back to you, Ulf.