Svenska Cellulosa Aktiebolaget SCA (publ)

Good morning and welcome to this presentation of SCA's 2025 year-end report. With me here today, I have President and CEO, Ulf Larsson, and CFO, Andreas Evert, 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 very warm welcome to the presentation of SCA's result for the full year and the fourth quarter 2025. During 2025, SA showed resilience. Despite the increasing wood, raw material costs, a challenging market environment, and a currency headwind, we reached 6.6 billion SEC on an EBITDA level, and by that, an EBITDA margin of 32% for the year. Our high degree of self-sufficiency in strategic areas continued to be an important factor to mitigate high costs. Harvesting from our own forest increased and reached 5.4 million cubic meters during 2025, partly offsetting the higher cost of wood-drawn materials. SA continued to gradually increase production in the sites where strategic investments had been made, and this has resulted in high delivery volumes in comparison to last year, driven by the new paper machine in Obola, the grading mill in Bollstad-Somil, the biorefinery in Gothenburg, and so on. These investments will contribute to increased productivity and cash flow generation during upcoming years. The book value of SEA forest assets decreased slightly compared to last year and amounted to 104 billion SEK at the end of 2025. As you already know, SEA bases the valuation of the forest on complete transactions in the region where SEA owns land. Turning over to some financial KPIs related to the full year 25. As already said, our EBITDA reached 6.6 billion SEC for 25, which corresponds to a 32% EBITDA margin. Our industrial return on capital employed came out to 4% for the full year 25, and the leverage was at 1.7 after having finalized our big strategic investments. The proposed dividend for the AGM to decide on is 3 sec per share, and this is in line with our aspiration to provide a long-term, stable, and over time increasing dividend to our shareholders. We handed out 3 sec per share also last year. And finally, earnings per share was 4.56 sec. This slide will give you an overview of KPIs for the fourth quarter of 25, and our EBITDA reached 1.2 billion SEC during the fourth quarter, which gave us an EBITDA margin of 25%, driven by a negative currency effect and lower selling prices. Our net debt to equity remains on a solid level of 11%. I will now give some comments for each segment, starting with Forrest. Stable harvesting levels from our own forest have contributed to balanced 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, and this can be seen in the graph in the bottom left. Regarding pulpwood, we have now passed the peak, and prices have continued to come down during the quarter. Demand for saw logs continued to be high, especially for spruce logs. When one compares Q425 with Q424, sales were up 10%, while EBITDA was up 3%, mainly due to higher prices for wood-raw materials. The storm in mid-Sweden during the end of the year had a limited impact on SEA land. We estimate that approximately 100,000 cubic meters has fallen. When we widen the scope to Sweden, we estimate that around 10 million cubic meters has fallen, and the majority in Gävleborg and East Dalarna County. I guess we have also another three to four million cubic meters in Finland. The CA will prioritize harvesting windfall volumes to support private forest owners, and this might have a minor impact on the total level of harvesting from our own forest during 2026. Harvesting activities in windfall areas will primarily be carried out from Q2 and forward. Windfall volumes will contribute to an increased availability of woodrow materials in this region. Over to wood, and in general, we still have a slow of improvement in the repair and remodeling segment, as well as a decreased production level in Germany, generating better supply and demand balance, especially for sprues. Stock levels remain on the high side among producers for pine, but are on normal levels for sprues. Stock levels at customers continue to be on the low side. SA had strong delivers in the fourth quarter, resulting in a seasonally low stock level of Zongos for us at the end of 2025. The price for solid wood products decreased by 5% in the fourth quarter of 2025 in comparison with the third quarter same year. And this development is in line with what I said when I presented the report for the third quarter. As expected, the cost for SOLOGS has increased from the third to the fourth quarter, and we also expect them to continue to increase going into the first quarter 26. Sales were up 5% lower in comparison with the same quarter last year. EBITDA margin decreased from 17 to 6% due to higher raw material costs and the negative currency effect. 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 level is on the high side, especially for pine, while the SCA level is seasonally low. As can be seen in the diagram to the bottom left, the Swedish and Finnish sawmill production has been on a normal level during 25. In the diagram to the top right, we can note that the price decreased during the fourth quarter. The decrease in pine has been higher in comparison with spruce. Coming into the next quarter, I estimate the price on average will be unchanged in comparison with the fourth quarter, with a stronger tendency for spruce related to a better balance. Going forward, we will closely monitor the market development in continental Europe that is impacted by lower production, not the least in Germany. So, coming over to PALP. When comparing Q425 with Q424, sales were down 14%, mainly due to lower prices and a negative currency effect. The negative EBITDA development was also driven by lower prices and a negative currency effect. The cost for the planned maintenance stop in Q4 25 was 198 million sec compared to 250 million sec in Q4 24. Global demand for pulp was at a healthy level during the first quarter of 25. During the second quarter, the market changed with reduced demand and prices came under pressure, much due to uncertainty related to U.S. tariffs. During the third and fourth quarter, prices on MBSK pulp were stable at low levels. On the demand side, we saw an increased activity in China. The weakening of the US dollar in relation to the Swedish krona, which started already in Q1, continued to have a negative impact on the price in SEC, also in Q4. Tariffs on MBSK pulp from the European Union to the US were removed during the third quarter. This allows us to maintain a competitive offering to the US. Market rebates are expected to increase by low single digits in the U.S. and mid single digits in Europe. PIX prices are expected to start to increase to compensate for the rebate. Looking at CTMP, prices were mostly unchanged in Europe and Asia at low levels during the fourth quarter. Inventories of softwood pulp were on the highest level during the fourth quarter. Hardwood inventories, on the contrary, were on average. CTMP inventories came down during the quarter to a more normal level. Moving over to container board. Sales were up 8% in Q4 in comparison with the same period last year, driven by higher delivery volumes, somewhat mitigated by lower prices and a negative currency effect. EBT was down by 6%, driven by lower prices and a negative currency effect. We have seen box demand moving sideways in Q4, but still with a positive development on year-to-date basis of around 1.5%. The retail business remains a positive driver. On the other side, we continue to see a weak European manufacturing industry, which for the moment has a negative impact on the demand. European demand of container board has developed like the box demand and has moved sideways in the last quarter compared to Q4-24, but with slight growth for the full year. During Q4, we saw some closures of capacity in test liner, although not yet enough to balance the capacity started up in previous quarters. As can be seen in the graph, craft liner inventories remain above average level in Q4, Prices for Brom Craftliner in Central Europe decreased during Q4 with €20 per tonne, while White Craftliner has remained stable. We can see another negative price adjustment of €20 per tonne in January. On the other hand, we now hear announcements of around €100 per tonne price increase for Testliner, and if that succeeds, I guess we will have a price push also in Craftliner at the later stage. So finally, I will say some words about renewable energy. And in renewable energy, we have had a strong quarter compared to the same period last year, mainly due to high production and stronger margins in our, with SD-1, jointly-owned biorefinery in Gothenburg. In addition, we have had higher production and stronger deliveries in solid biofuels. Electricity prices continued to be low during the fourth quarter, but slightly higher than same period last year. Low electricity prices in the market impact on our wind business negatively, but is positive for SEA as a net buyer of electricity. SEA land lease business increased to 10.6 terawatt hours according to plan. This is equal to 20% of installed capacity of wind power in Sweden. The Fasikan wind farm was taken over by SA by the end of 2025 and is now ramping up production. And with Fasikan adding to our current power production within the group, we increase our self-sufficiency rate to approximately 100%. The market for solid biofuels in Northern Sweden continues to be weak but stable, and this fact increases our European export share and by that, a somewhat reduced margin. For liquid biofuels, we have seen continuous higher margins compared to previous quarters. And the main reasons for European countries implementing REDD3 and better control mechanism within EU regarding imported products and feedstocks. And we expect the market volatility in renewable fuels to remain high as Europe ramps up the blending mandates both in HVO and SAF. And by that, Andreas, I hand over to you.

Thank you, Ulf, and good morning, everybody. I'll start off with the forest valuation and the three-year average price, which we used in the forest valuation to get enough transactions decreased by 4% to 372 sec per cubic meters. The one-year average increased slightly, and the market activity during the year was on a normal level. The valuation of SS Forest assets decreased 204 billion in 2025. The decrease in the three-year average price was partly offset by continued increase in standing volume to 277 million, just below 1.8 billion, driven by increasing long-term prices for wood or materials, and higher standing volume due to the net growth, while the value of the land decreased due to lower prices for forest land. Prices for wood materials continue to increase. The slide shows the index price development for soil logs and pulp wood paid by SE's industries delivered to site. Prices are at a record high level with the continued tight market for saw logs, especially on spruce, while the balance of pulpwood has improved. If we move on to the income statement and focus on the full year to the right, net sales were stable at around 20 billion. High deliver volumes and high prices were offset by negative currency effects. EBITDA increased 8% to just below 6.6 billion, driven by negative currency effects and high raw material costs, which are partly set by high delivery volumes and somewhat higher prices. The EBITDA margin was 32%. EBIT decreased to 4.4 billion, and financial items totaled minus 433 million. Benefactor tax rate of just below 20%. bringing net profit to 3.2 billion or 4.56 SEC per share. If we look at the fourth quarter to the left, EBITDA totaled 1.2 billion and was affected by a planned maintenance stop in Astrand by 198 million. Net profit for the quarter totaled 485 million or 0.69 SEC per share. Looking at the dividend, the board has proposed a dividend of three sec per share, which is unchanged from the previous year. On the next slide, we have the financial development by segment for the full year. Starting with the forest segment to the left, Net sales increased to just below 10 billion, and EBITDA increased to 3.8 billion, driven by higher prices for pulpwood and saw log, and increased harvesting from SCA's own forest. In wood, net sales increased to 6.1 billion, driven by high delivery volumes and high prices, which was offset by negative currency effects. EBITDA increased to 856 million, corresponding to a margin of 14%, and was negatively impacted by higher costs for SOLLOGS. In pulp, net sales decreased to 7.1 billion due to lower prices and negative currency effects. EBITDA decreased to 752 million, corresponding to a margin of 11%. The decrease was mainly related to lower prices, negative currency effects, and higher costs for pulpwood. In container board, net sales increased to $7 billion, driven by higher volumes from Mobula and higher prices. EBITDA increased to $1.1 billion, corresponding to a margin of 16%. In renewable energy, EBITDA was stable and totaled $442 million, corresponding to a margin of 22%. The market for liquid biofuels improved during the later part of the year, while electricity prices continued to be low. Moving on to the quarter, and on the next slide, prices decreased 6%, with lower prices in pulp and container board. Volumes increased by 7% due to higher volumes in mainly container board, but also pulp. And lastly, currency had a negative impact of 6%, bringing net sales to 4.9 billion. Moving on to EBITDA Average, and starting to the left, price mix had a negative impact of 370 million, and higher volumes had a positive impact of 77 million. High cost for raw materials had a negative impact of 37 million, which was mitigated by a high degree of self-sufficiency in old raw materials. We had a positive impact from energy of 41 million, and a negative impact from currency of 269 million. Others was impacted by but lower costs from planned maintenance jobs. In total, EBITDA decreased to 1.2 billion, corresponding to a margin of 25%. Look at the cash flow. We had an operating cash flow of 3.1 billion for the year and 529 million in the quarter. And as you know, other operating cash flow relates mostly to working capital currency hedges and should be seen together with changes in working capital. Moving on to the balance sheet, the value of the forest assets decreased to 104 billion. Working capital decreased compared to the previous quarter, but increased year on year to 5.3 billion. In the quarter, we have increased our harvesting rights of especially spruce soil logs for 2026 from private forest owners, which increased both inventories and payables, but no impact on the quarter's cash flow. Capital employed decreased to $112 billion, and net debt totaled $10.9 billion. And we have now almost finalized our large ongoing investment projects. Equity totaled $102 billion, and net debt to equity was 11%. Thank you. With that, I'll hand back to you, Ulf.

Yeah, I mean, to summarize 2025, I think we have delivered a solid result given the current market situation. When we compare 2025 with 2024, I mean, we are negatively impacted by almost 1 billion related to currency and also to raw material costs. On the positive side now, I can see that our strategic investments, they have started to deliver, and it will be interesting to see when we have a turning point in the market, what kind of leverage we will get from those investments. So by that, I think that we open up for questions.

Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. Thank you. We will now take our first question from Jonas of Morgan Stanley. Your line is open, please go ahead.

Yes, good morning. Thank you very much for the presentation. Just two questions on storm Johannes, where you've given us some very useful color. But just to get your perspective on how things develop from here, assuming we do have the additional wood supply coming to the market, shall we expect to see an acceleration in the decline in pulpwood prices? And what would it mean for solar prices that have remained stubbornly high? And then second, and related to the storm, Your costs, harvest costs, were likely a bit higher in Q4. Going into Q2, where you expect to focus on harvesting winter fall volumes, how should we expect your harvesting costs to develop in Q2 and Q3 this year, and would that have a meaningful impact on your P&L? Thank you.

If we start with the cost, I mean, as I said, not more than 100,000 cubic meters has fallen on SEA land. And, of course, when you take care of that part, that will increase the cost. But that's a minor part of the harvesting we do on our own land. But for private forest owners, okay, we will have increase in costs. And typically, I mean, the forest owner has to pay for the increase in cost levels. So that will be no... no major impact on on on on sea in that perspective when it comes to prices i mean as you say for pulpwood prices they have already start to decline and and that will step by step come into the accounts of companies as we have i mean we have a lagging effect of course but but that will continue and maybe it will also Yeah, I mean, it will not be – park board costs will not be – that will be positively helped by this storm, that's for sure. When it comes to SOLOX, I guess the main – The main part of what has fallen is pine, and maybe we start to see decreasing prices for pine, and that will also, I think, after a while, come also for spruce. But during the first quarter, at least for SA, I mean, we have to – take care of what we bought already in the fourth and third quarter. And that means increasing solo costs in the first quarter. But then I guess we start to see some decreases also for solos. But as it is just now, I guess it's an oversupply. It will be at least in the second quarter an oversupply of pulp wood, while it will be a little bit more stabilized situation for solos.

Thank you. Sorry, just a So go on.

Now that's my view, more or less.

Very useful. So just one follow-up on pulpwood. What sort of cost development into your industry shall we expect for Q1 versus Q4?

On pulpwood, it's a low single-digit decline. Around 2%. Thanks very much.

But on the other end for SOLOS, I guess we will have almost 7-8% price increase. And then step by step we will see reducing prices.

Got it clear. Thank you very much.

Thank you.

And we'll now take our next question from Charlie Moussans of BNP Paribas.

Good morning and thank you very much for taking my My questions. Just firstly on currency, I know you did the, in the statement, you give the average hedging rates. It looks like, you know, those are still meaningfully ahead of latest spot market rates. So as things stand, should we continue to expect a sequential currency headwind over the next couple of quarters? I guess, particularly on the the dollar um and then secondly i'm sorry if i missed it but um have you given or can you share your thoughts on capex for 2026 and any early thoughts on where that might go to in 2027 as you complete uh wrapping up any final uh expansionary projects

Yes, I'll start with the currency. You're absolutely right. We have, I mean, for next year, on average, we hedge about 50% of our net currency exposure. So once those hedges go out, of course, if the dollars stay at the same level, that will be a headwind. And If you look at our dollar exposure, if you include the indirect effects, meaning that we might sell in SEAC or euro in pulp, but the price also depends on the PIX prices in dollar. If you include that indirect effect, our dollar exposure is around 700 million US dollars per year. And then on the CapEx side, Our early estimate is around, on current capex, is around 1.5 billion for next year. And strategic capex, we have some spillover from this year to next year, suspecting that to be around 400, maybe 500 million. But after that, I mean, we have finished basically all of our strategic capex that we're currently decided on.

Many thanks. And then just briefly on pulpwood, as you acknowledge it's coming down, I just wondered, are you seeing at all any of your customers start to pressure you to pass those costs on in terms of lowering your prices in any of the industrial output grades?

I mean, prices are already very, very, I mean, low at the moment for finished products. I think this lower cost will, of course, help our margins.

Great. Thank you. Best of luck in the quarter. Thank you.

Thank you. And we'll now take our next question from Robin Santorezza of BNB Carnegie. Please go ahead.

Thank you very much, and good morning. First question I have is related to harvesting volumes. You have nicely increased those in line with your guidance a few years ago and land at 5.4 now in 2025. What is the best guess for 2026 and 2027? Is it roughly harvesting volumes in line with what you achieved in 2025 or is it higher or lower? What are the key reasons for that?

We start with that, but I mean, we will, I guess we might see a minor decrease from our own forest as we now have to support private forest owners in our region and we have some also agreements in place already, which is long-term good for us. I mean, we will place some of our resources in south from Sundsvall in Gävleborg and even further south to help it. I mean, 10 million cubic meter in a rather limited area that's quite a lot and that will of course need some extra resources to take care of it. We also have to fight against the time because now we had more or less one meter snow which I mean it's not so easy to go in there and start to do the harvesting operations. So I guess we will have a peat getting the wood destroyed, blue stain and things like that. So that might have a minor impact on the harvesting volume on our own forest.

So the pool here is roughly the same or slightly lower perhaps?

Yeah, I mean, it is around this level.

All right, thanks. In terms of the European softwood pulp sales... Can you share some light on the discounts you have agreed for 2026, helping out with modeling here? And also in terms of the lease prices, where are they now at the end of January and what's the outlook for the next month or two? Just so we understand how the net price of the outlook is.

Sorry, I didn't get it. Was it pulp or was it solid wood products?

Yeah, pulp. I guess the discounts, the annual discounts.

Okay.

Yeah, you're right.

I mean, PIX prices, they were on $1,500, and now they have started to increase, and I guess we will end up in $1,550 maybe in... at the end of January, and we start to, by that start to compensate for increasing rebates, but we will, as you can calculate, we will not... We will do it in one quarter. I guess we will see another price increase in February, and I guess also we will see a third price increase in March. And at that time, I guess we have at least compensated for increasing rebates. But that's the case. So if you compare Q sequentially, if you compare Q1 with Q2, I guess we will have a lower price. We will have a lower price in Q1 in comparison with Q4. And in addition, you also have a stronger SEC against dollar, which will have an impact also. That's harder to predict, but that's the case, as it is just now.

And Ulf guided previously on that the rebates in the U.S. increases low single digits, while in Europe it's mid single digits. And that's general markets rebates.

Okay. I understand. Thank you very much.

Thank you.

And we'll now take our next question from Johannes of FD1 Markets. Please go ahead.

Yes. Hi, everyone. It's Johannes. I have two questions. The first one is on container board. You did pretty well on volumes there, at least compared to my expectations. Could you share some color on that sort of ramp up of volumes, and were you able to sell the new incremental volumes at market terms, or did you have to sort of give hefty discounts there, if you could get some color at least?

Yeah, I mean, we are happy with the ramp-up in Obola, and as I said also before, we are close to 600,000 tons in 2025, which is according to plan. So we will continue that work also going in now to 2026. I mean, it's more a question about mix. I mean, as it is just now with the current market situation in Europe, it's not possible to deliver the extra volume, so to say, in Europe, so that we have to find places overseas. And by that, of course, we have, as it is just now, a substantially lower margin. But again, our main focus just now is the ramp up, and then I guess we are looking forward to the point where the market turns, because then we will have a good leverage also from those volumes. But as it is just now, we are impacted price-wise due to the mix, geographical mix.

Okay. Thank you. That's clear. My second question is more on capital allocation. Of course, this is more of a question for the board, but I tried to ask it to you, Ulf, anyway. The sort of essayist way of distributing cash to shareholders has always been traditional dividends, but in the light that strategy CapEx is now coming to an end and in light of the share price valuation, do you have sort of more intense discussions about about share buybacks going forward, if you can elaborate on that question, please.

I mean, as you say, that's a question for our owners and the board. And I think it was a sign of stability to keep the dividend at the level we had last year. And, I mean, that's a sign of – we believe – I believe that we are – And also, I mean, we know that we are well prepared when the market turns. We have done big investments now, and we have ramped up them in a rather good way. And we are looking forward now to see increase in prices and then leverage from those investments. And as Andreas said, I mean, we have no big investments in plan now coming years. So, I mean, then... then let's see what kind of discussion we will have at that time. But for now, I mean, we are happy to deliver the same dividend as we did last year.

Okay. Thank you.

Thank you. And we'll now take our next question from Oskar Lundström of Danske Bank. Please go ahead.

Good morning. Three questions from me. The first one is actually carrying on from Johannes' question a little bit here about capital allocation, but I'm not going to ask you about share buybacks. I mean, given kind of weak markets, structural challenges, and that the energy segment, at least my book, presumably, is as attractive as it did a few years back, where do you see your potential to sort of structurally grow earnings in the coming years, and where could you invest to drive your growth? That's my first question. Do you want me to ask the other ones as well?

No, if we can take the first one first, I'm happy. I mean, again, as we said, I mean, just now we are in a challenging market environment. As you know, we have done a lot of big investments. We will grow our volumes. We have been growing our volumes also in both 24 and 25. And, I mean, just now we are 100% focused on delivering on those investments. I mean, of course, we will come back. When this is fully ramped up and when we have started to see a slightly better market and by that also a strong cash flow, then I think it's the time to come back to the But just now we are so focused on do what we have started, to finalize what we have started.

Yes, right. My second question is maybe for Andreas. Is there any impact from loss of emission rights on earnings in Q1 or for full year 2026? If so, how much and where have they been reported so far?

We will have an impact if you look at 2025 compared to 2026, as now the new emission rules, ETS, is in place. That means that if you look at our four big mills, Obola and Ortvike will still be part of the ETS system, while Östrand and Mungsund, they are too good in their emissions, and therefore they will strangely be removed from the system. On Östrand, we don't have a surplus, that doesn't matter, but on Mungsund mill, we will lose our emission surplus, which is about 100,000 tons of emission rights each year. And then, if you look historically back, publication paper, Ortviken was the biggest receiver of emission rights. By that, we divested or closed down in 2020. So that had the biggest impact, but now Munchson will be removed for next year.

And if I may just ask a follow-up on Munchson. Have you been selling those, the full sort of all the emission rights that you've been given each year? Have you sold them each year, or...? Have you built up a backlog or how should we calculate that?

Usually some we sell internally to our logistics department, especially for 2025 when you have to have also buy emission rights in the transportation sector. And the rest we have sold. So we will sell. We will lose 100,000 tons going forward.

So we should assume sort of loss of 25,000 tons per quarter times whatever the average price was for emission rights.

Yes. Yes. That's correct.

Good. All right. Just a final question, if I may, on I guess the wood segment. You mentioned this sort of dramatic or lower harvesting levels in Central Europe. I presume it's as a consequence of the bark beetle infestations there. So two questions there. How dramatic is this decline in harvesting levels in Central Europe? And is there, you know, any sense that this is impacting or will impact the long-term timber and song timber supply from that region? It's the competitor that's disappearing.

Yeah, I guess, I mean, we see also as it is just now, the spruce market is substantially stronger than the pine market, and that's due to the balance, I would say. And the production left in Germany has been – also lower for a while now. And I guess one part of it is that it is tricky to get access to Zoologs. And, of course, when you have a tight balance, you have to pay more. And then, as it is a marginal business, I mean, then they have in some areas taken containment. So the long-term effect, I mean, I don't – typically, I guess – it will be tougher to get access to raw material in that area, especially in the eastern part where they were heavily hit by the spruce beetle. And that is also, I mean, long term, the estimation we've done is that we will have a strong balance for, as a producer, we will have a strong balance for solid wood products going forward. But then, of course, it's also volatile business. It will be impacted by the current business cycle but but we believe that solid wood products will be rather strong going forward as the material is needed not the least if we shall have a chance to to mitigate the climate change and so on i mean we have to use non-fossil products and and that will be that that will be good i think for that business going forward all right thank you interesting yeah

Those are all my questions. Thank you.

Thanks.

Thank you. And we'll now take our next question from Andrew Jones of UBS. Please go ahead.

Cheers, Jens. A couple of questions. First of all, on container board, obviously we've seen some price hikes announced by some of the recycled players. I'm curious what you make of the potential for price increases in the current market given the demand situation and oversupply is a bit more potential in Kraftlander, maybe given the market's a bit more balanced there. And my second question is on forest valuations. I mean, given, obviously, like wood prices potentially coming down and obviously rates going up as well. And what are you seeing, hearing in, you know, in your regions in Sweden in general on the sort of trends for valuations? Are you concerned about sort of more negative valuation as we go into 2036.

Thanks. If I take the container board market first, I mean, as I said, I mean, we have seen now some announcements. I don't know if TestLiner produces, if they have come through with price increases, but they have asked for hundred euro per two ton and and they suddenly need it as i think that many many test lines produce test line producers they are bleeding just now uh short term we have seen gas prices coming up 30 35 percent uh also see prices still on the same level but typically they I guess they will also start to ask for more if test liner producers will come through with their attempts to reach higher prices. And when that happens, then, of course, that will give a price push also for craft liner in a later stage. And, I mean, that is now needed in the market. But I guess we have a chicken race out there. There's a lot of capacity that's coming on stream for test liner and – So don't know when it will happen, but it will happen, and we are at the bottom just now. That's my estimation.

And if you look at the forest valuation, I don't want to speculate going forward, but if you look at 2025, activity was a normal basis and the one year average increased slightly during the year and for next year we see in general that the swedish economy is is improving wood raw material prices are coming down a bit but usually I mean, when you buy a forest asset, you have a 100-year view on the forest prices or the woodland material prices. So it's not – I mean, it's the general long-term view that's the most important. But we'll have to see. But this year was slightly up on the one-year average, but the three-year average declined.

Yeah. Okay, that makes sense. And actually, just to follow up on the wood prices, I mean, you're talking about relatively modest declines, obviously, so prices being pretty flat so far for pulpwood. Given the decreases we've seen in Finland, I mean, is there any, I mean, I would assume that Sweden would have followed to a greater extent already. Is there anything stopping prices sort of gapping down lower given, you know, the potential for arbitrage across the border. I mean, what's the, what's the, what are the thoughts there?

Sorry, what was it, Woodrow Materials? Was that the... Yeah, but I mean, we have seen pulpwood prices fallen also in our region, and as Andrea said, I mean, we will see some of it also in Q1, I guess, for pulpwoods.

But it's this lag effect because, I mean, you buy on stumpage what we harvest in Q1, we bought in Q2 and Q3 and Q4. You have this delay effect because you buy on stumpage to write the harvest from the private forest owner.

And also you cannot just follow public announcements as you also, on top of that, have different premiums and things like that, which is individual for each buyer and for each market and so on. So, I mean... What you see announced will not be exactly the same effect that you will have in the account, I guess. But you always have this lagging effect. But we have the same journey, and of course now boosted by the windfalls we've seen in our region, that will also have definitely an impact on pulpwood prices.

Actually, just a final one, just on context. I mean, what is the total size of the market in Sweden in terms of pulpwood consumption per year? I mean, how significant is that in the broader market?

I'm not sure. I'm not sure either, Steve. We have around 10% of the forest assets in Sweden, and we harvest around 5 million cubic meters from our own forest each year. Just to get some kind of ballpark.

But was it the total harvesting volume in Sweden? Was that the question?

Yes, exactly.

Okay, sorry. It's around 85 million cubic meters per year. Okay. So it's roughly 10% additional supply. Exactly. 10, 15. 10 between. I guess it will be 15%. And then also in addition you have 3 to 4 million cubic meters on the Finnish side. Yeah. Okay. That's great. Sorry. I didn't catch you.

Thank you. Once again, as a reminder, ladies and gentlemen, if you would like to ask a question... please press star 1 on your telephone keyset. Thank you. And we'll now move on to our next question from Cole Haddon of Jefferies. Please go ahead.

Good morning. Thanks for taking my question. I'd just like to follow up on the saw and wood business. I just missed your commentary on what your expectation is of price declines quarter on quarter into Q1. And just on your saw logs, I know you said they're going to be up around 7%. But just to clarify, that is northern Sweden. I imagine the rest of Sweden's SOLOG prices are lower. Just a clarification there.

I mean, starting with the price development for... finished products as i said from from q3 to q4 we had the average price was down five percent uh from q4 over to q1 2026 i guess we will have a flat price development but what we didn't expect really was the We have had another impact from a negative currency effect impact, of course. But I guess it will be close to zero. On the other hand, for us, as I said, we will have close to 7-8%, you said, increasing log prices. And, I mean, we cannot comment what will happen in other parts of Sweden, I guess. The reason for that for us is that we thought it would be a very tight situation coming into the first quarter, not the least for spruce logs. So we bought rather big volumes in the fourth quarter. And, I mean, we couldn't know or expect that we should have a big windfall in our region between Christmas and New Year. And if we would have knew that, then, of course, we should have acted differently. But now we have to... Take care of what we bought.

Just a longer-term question on wood products. I mean, we've seen CBAM boosting the cost of cement, the cost of steel, you know, import restrictions, increasing prices of these construction raw materials. You know, do we see wood as kind of an underappreciated beneficiary? When do people look at the construction costs of wood? of saw and wood and say, you know, we should start using more of this product, or is that just too far away into the future? And then following up on container board, we've seen some of the U.S. players talk about slightly better order books, slightly better demand. I'm just wondering, are you seeing any more positive trends in the container board and box side at this stage or not yet?

I mean, starting with solid wood products, I guess we are – We are pretty positive to the future market for solid wood products. Then again, it's always a balance between what you have to pay for the raw material and what can you get out from the market. As you know, more than 70% of the cost for a sawmill is related to materials. to the raw material of course so but i mean we feel that the demand for solid wood products is i i guess it's it's okay as it is just now and we we see an improving trend also for for coming quarters now and let's see where we will end up but i think q2 is usually a typically stronger quarter Structurally, I think that, I mean, in many cases, people have tried to turn from also from fossiles over to non-fossile materials. And, I mean, that will also benefit the solid wood business going forward. So I think we are positive long-term in this field. And then about container board, I guess we had, if we look in, Into last year, I mean, the consumption was up 1.5% during last year. And also when you look at the box demand, as you saw maybe on the slide I did show, I mean, you have a positive – the trend is positive. Then again, I think what is – Harming the balance just now is that we have seen a lot of new capacity coming on stream. For Tesla, I mean, the only capacity in Kraft Liner is what we are providing the market ourselves from Obola. But otherwise, in Tesla, we've seen a lot of capacity coming on stream. Some has been closed, and I guess some more capacity will be closed. And I guess we have, for that reason, a little bit of a chicken race just now out there. And let's see what happens. where and when that will, how and when that will end up. So I guess, but then you asked about consumption. Honestly, I don't feel, I think we are, it is a rather slow market out there, at least for us being in Europe and might be a little bit better in US and also in other countries. we have a slightly better demand. But, again, the price is, of course, lower when we have to go overseas with our volumes. And that has also impacted the result for us as we are now ramping up Ebola. Thank you. That was not a very clear answer, but it was a trial at least.

Thank you. And we'll now take our next question from Talos Mittal of Barclays. Please go ahead.

Good morning. Thank you for taking my questions. I have two of them. So firstly, can you talk a bit about the adverse mix impact that you highlighted for your pulp and the container mode business, especially over the last couple of quarters? And do you expect that to continue in 2026, given the weakest demand that we have seen in Europe? And just to follow up, what are your expectations on CPMP pricing in the near term?

Can you repeat the first question, please? Just asking about the adverse mix impact on your pulp and ... Yeah, so what we saw in, especially in Q4, as Ulf mentioned, we had lower delivery volumes in Europe due to a weaker market, which means that we sold a larger part in Q4 in overseas market. And I think that was partly because in the weak market, but also because that customers knew that the rebates were going to increase at the beginning of the year. So they ordered as little as possible, of course, during the quarter, since they know the rebates were kicking in the first of January. So I think you might have some positive effect there, but the weak market, I mean, we still expect that in Q1.

And the second one was around CTMP. I don't know if I get you right, but I mean, the demand is still slow on CTMP. And I think we and also other producers, we are taking containments now when we have a high energy price. And so, I mean, we do a marginal demand. calculation and and by that we have a reduced capacity as it is just now from from or tweak and price wise it we have not seen any increase in rebates in in 26 in comparison with 25 so the price is more or less sideways and the business we have in europe is it's okay but but then again it's tough for us to come from europe over to asia not the least, and make some money on it. So we monitor this carefully, and we do this marginal calculation where we have to calculate on the marginal wood cost and also marginal energy cost for CTMP.

Sure. If I can just squeeze one more in, and this is regarding the first quarter of 26, I appreciate there are a number of moving parts, But can you help us understand, I mean, sequentially, how we should think about the first quarter, especially given the declining prices, negative effects, but some support from the pulp food cost side of things? So is it fair to assume a very similar EBITDA in Q1 despite having zero maintenance?

Yeah. So we won't give a direct guidance. If we just look at the moving parts, we have a maintenance stop in the fourth quarter, and we won't have any maintenance stops in Q1. On the pulp side, we see no maintenance stop, but increased in rebates and negative currency effects. As a negative, and as a positive, slightly lower pulp would be. costs in container board. It's, as I mentioned, it's in the beginning of the quarter, this minus 20 euro per tons in prices. And then we'll have to see if this test line of prices goes through. And that might have a positive impact if it goes through at the end of the quarter or Q2. And then in solid wood products, we see fairly stable prices, a bit better on spruce, but increasing soil log prices. And then in forest, we harvest seasonal a bit lower in Q1 compared to Q4. And then other costs, OCC is slightly cheaper. Also, transportation costs go down slightly.

Sure. Thank you.

Thank you. And we'll now take our next question from Alexander of Barreto. It's a give or take. Please go ahead.

Just a quick question regarding harvesting. If you could elaborate a little bit on the expected harvesting volumes over the next few years, and also with regard to biological assets, what kind of long-term growth rate do you see regarding harvesting specifically? Thank you.

I mean, as I said, this year we reached 5.4 million cubic meters, and I guess next year we will, if not do that, as we have to support some forest owners in the windfall areas, we will do that, of course. But I mean, we will remain on around 5 million cubic meters, so that's...

And on biological assets, we expect it to be slightly lower, the revelation, next year compared to this year. But we still have, I mean, we look at the long-term average trend price of wardrobe material prices, and that will still increase even if the prices go down next year. The long-term average will still go up, but impact will be a bit lower next year compared to this year.

And on volumes in that calculation?

The prices will go up, and the volumes is based on our latest harvesting calculation. That will be unchanged.

Okay, thanks.

Thank you. That was our last question, and I will now hand it back to the host for any closing remarks.

And that concludes our presentation of the year-end report. Welcome back in April for our first quarter report. Thank you, ladies and gentlemen.