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.