Svenska Cellulosa Aktiebolaget SCA (publ)

Good morning and welcome to this presentation of SCA's third quarter report. Today we're joined by President and CEO Ulf Larsson and CFO Andreas Evets. We look forward to walking you through the results followed by a Q&A session. Over to you, Ulf.

Thank you, Per. So, good morning also from my side and a warm welcome to our presentation of our result for the third quarter 26. During the quarter, result increased sequentially and was also in line with the Q3 25. Market conditions were mixed between the segments during the third quarter. We continue to see improvements both in pricing and demand for the container board segment. In renewable energy, we have seen another quarter with a strong result, while pulp and solid wood products face the continued challenging market. High fuel prices driven by the conflict in the Middle East impacted the result within the forest and industrial segments negatively, while the liquid biofuels business, on the other hand, benefited from higher oil prices. SCA reached 1.63 billion SEK on EBTA level and by that an EBTA margin of 31% for the third quarter. So, turning over to some financial KPIs for the third quarter, and as already said, our EBITDA reached 1.63 billion SEK, which corresponds to a 31% EBITDA margin. Industrial Return on Capital Employed came out slightly above zero, counted for the last 12 months, and the leverage was at 2, while our Net Depth to Equity reached 10.4%. I will now make some comments for each segment, starting with forest. And during the quarter, SCA continued to process windfeld volumes for forest owners in the areas affected by the storm at the end of last year. Harvesting level of our own forest was stable but at a slightly lower level compared to the same period last year. Harvesting to our own forest has contributed to a balanced supply of wood, raw materials to our industries also during this period. Prices for both pulpwood and saw logs have continued down. However, compared to the same period last year, saw log prices are somewhat higher while pulpwood prices are clearly lower. When one compares Q3 26 with Q3 25 sales were down on 1% while EBTA was down 23% mainly due to low prices for pulpwood and increased fuel costs. During the quarter SCA sold low productive forest land far from our industries and at the same time we acquired around 5000 hectares of productive forest land closer to our industries for the same amount of money. The market for solid wood products is moving sideways due to slow building activities in most regions. We expect the demand to continue to be stable on current level in the coming quarter. Production in Germany and Canada has decreased year on year, but volumes in Scandinavia are close to last year's level, driven by processing of storm felled logs. Stock levels remain on the high side among producers for pine but are on normal levels for spruce. Stock levels at customers continue to be on the low side. Delivery volumes were lower in Q3 26 in comparison with Q3 25. SCA Stock of Sown Goods is at a balanced level for the season. The price for solid wood products decreased by 2% in the third quarter at 26% in comparison with the same quarter last year. This development is in line with what I said when I presented the report for the second quarter. The cost for saw logs in the third quarter was still high, but we saw a small price decrease in comparison with the second quarter, and we expect to see some further decreases in log costs when moving into the fourth quarter. Sales were 6% lower in comparison with the same quarter last year. EBITDA margin decreased from 15% to 8% due to high raw material costs and lower 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. And as mentioned earlier, we note that the inventory level is on the high side in Scandinavia, especially for pine, while the SCA stock level is balanced. As can be seen in the diagram to the bottom left, the Swedish and Finnish sawmill production has been like the five-year average during 26. In the diagram to the top right we can note that the export price index decreased somewhat in the third quarter and as already mentioned SCA's prices moved in the same direction. Going into the next quarter, I estimate that the underlying prices in the market will be unchanged, but we are moving into a seasonally weak demand and we still have negative effects from lower quality on the Stormfell logs, giving a limited risk on the downside. Excuse me. Over to PALP and when comparing Q226 with Q225 sales were up 7% mainly due to strong production and higher delivery volumes which was somewhat mitigated by lower prices. EBTA was down 18% which was mainly driven by lower prices, partly mitigated by lower costs for raw materials, strong production with lower specific costs and repayment of tariffs totaling 15 million SEK. Global pulp prices remained on a low level during the third quarter, supported by a relatively weak demand combined with a high inventory level in China. Several softwood pulp mills have had market-related downtime during the third quarter, and closures of softwood pulp capacity have been announced in both North America and Europe during the year. In Europe and US, softwood pulp prices decreased slightly during the third quarter, whereas prices in China first declined before rebounding towards the end of the quarter. Looking at CTMP, demand and prices remained at a low level during the third quarter. Global inventories of softwood pulp stayed at a high level during the quarter, as shown in the diagram, whereas hardwood inventories increased from a low level to a more normal level. So moving over to container board and here sales were up 12% compared to the same period last year driven by high delivery volumes and higher prices. EBITDA increased by 130% driven by lower costs for planned maintenance stops, higher prices, lower costs for raw materials and repayment of tariffs of 27 million SEK. This was partly mitigated by negative currency effects. After a softer box demand in the early summer, demand recovered in the third quarter with full-year growth slightly below long-term average. A stronger manufacturing industry in combination with a growing retail business has been very supportive. European demand of containerboard has improved during the third quarter following the box demand and we forecast a positive demand development of containerboard in the coming quarter. There is no new container wood capacity started up in the first three quarters of the year. During the last quarter of 26 we can expect ramp up of the new capacity started in 25 as well as some closures to balance some of the increased supply. Craftliner inventors remain on a seasonal normal level Q3 driven by both stable deliveries and limited supply. During Q3, the availability of OCC has been in balance with supply and demand, which in its turn has led to stable prices. Prices for Brown Craftliner in Central Europe increased in the beginning of the third quarter with €60 per ton for Brown Craftliner and €40 per ton for White Craftliner. The improved underlying demand in combination with strong cost pressure and lower global supply have supported a third price increase for Kraftliner this year. With the gradual implementation from September, prices for brown Kraftliner in Central Europe have increased with additional €8 per tonne and another €60 per tonne for white Kraftliner. Finally, I will say some words about renewable energy. In this segment, we have had a stronger quarter this year compared to the same period last year, and that is mainly driven by higher prices and strong production in our jointly owned biorefinery in Gothenburg. Electricity prices were volatile during the quarter, but higher in comparison with Q3 previous year. Delivered volume was higher, driven by our new wind farm Fasikan. In solid biofuels, we've had a good production and stronger deliveries in the year in comparison with last year. And by that, Andreas, I hand over to you.

Thank you Ulf and good morning everybody. I'll start off with the income statement for the third quarter. Net sales increased 5% to 5.2 billion, driven by high delivery volumes, which are partly offset by lower prices and negative currency effects. EBITDA was aligned with the third quarter last year and totaled 1.6 billion. Lower prices and negative currency effects were offset by lower costs for planned maintenance stops and higher delivery volumes. EBIT decreased just above 1 billion and financial items totaled minus 102 million. With an effective tax rate of below 20%, bringing net profit to 772 million or 1.1 SEC per share. On the next slide, we have the financial development by segment. Startinging with the forest segment to the left, net sales decreased to 2.4 billion, driven by lower prices for both saw logs and pulpwood compared to the previous quarter. EBITDA decreased to 702 million, driven by lower prices and seasonally lower harvest from SCA's own forest. In wood, prices decreased somewhat compared to the previous quarter, mainly driven by product mix, while the cost for soil logs decreased. Net sales decreased to 1.4 billion, driven by load deliver volumes and somewhat lower prices. EBITDA increased to 117 million, corresponding to a margin of 8%, and the increase was, as I said, driven by lower cost for wood raw materials. In pulp, net sales increased compared to the previous quarter and totaled just below 1.8 billion. EBITDA increased to 198 million, corresponding to a margin of 11%. The increase was mainly driven by lower raw material costs, high delivery volumes, lower distribution costs, repayment of tariffs of 15 million and higher energy net, which is partly offset by lower prices. In container board, craft liner prices continued to increase during the quarter. Net sales increased to just below 2 billion, and EBITDA increased to 446 million, corresponding to a margin of 23%. The result was positively impacted by higher prices, lower costs for planned maintenance stops, seasonal lower costs, and repayment of tariffs of 27 million. In renewable energy, we had another strong quarter driven by high fuel prices. EBITDA totalled 201 million, corresponding to a margin of 42%. Somewhat low results in our solid biofuels and wind business were partly offset by somewhat high results for liquid biofuels compared to the previous quarter. On the next slide, we have the sales bridge between Q3 last year and Q3 this year. Prices decreased 3%, driven by lower prices in pulp, which was partly offset by higher prices in container board. Volumes increased 9%, driven by higher volumes in pulp and container board, which was offset by lower volumes in wood. And lastly, currency had a negative impact of 1%, bringing net sales to 5.2 billion. Moving on to the beta-average and starting to the left, price mix had a negative impact of 144 million and higher volumes had a positive impact of 53 million. Lower cost for raw materials had a positive impact of 7 million, while energy had a positive impact of 4 million. with a negative impact from currency of 57 million, and lastly, with a positive impact from lower cost of planned maintenance stops and tariff repayments of 42 million, which was partly offset by higher distribution costs. In total, EBITDA was aligned with Q3 last year and totaled 1.6 billion, corresponding to a margin of 31%. Look at the cash flow. Operating cash flow decreased to 426 million for the quarter and 1.4 billion for the first nine months. Working capital in the quarter was negatively impacted by higher prices and market mix. 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. Look at the balance sheet. The value of the forest assets totaled $105 billion. Working capital increased to $5.4 billion. Capital employed totaled $112 billion. And net debt stood at $11 billion. Equity totaled $102 billion. And net debt to equity was 10%. And we have now almost finalized our large ongoing investment project. Thank you. With that, I'll hand back to you, Ulf.