Holmen Aktie

Good morning, everybody, and most welcome to the Interim Report Presentation for the Holmen Group. Today, it's me, Henrik Sjolund, and Stefan Lorehn. Correct name again. Now the second quarter.

Good.

We will go through the presentation, and then we are happy to take any questions you might have after the presentations.

So let's start. Well, as you know, the quarter again, characterized by uncertainty and the cautious consumers leading to a quite tough supply-demand balance for, I'd say, all forest-based industries. In our case, we also -- we had arctic weather up in the North, which helped us to deliver a decent result, which we will come back to in the different business areas, Stefan.

During the first quarter, we also paid dividend to our shareholders, SEK 1.5 billion. And our financial situation after the dividend, just to remind you is, of course, very strong, and shall remain so regardless of the future.

A few words about the forest. And normally, we don't talk too much about the forest. We talk about the wood market. Same again, what we see in the first quarter is that the industry is not running full, declining or, say, production curtailments, especially in the pulpwood industry, we have seen pulpwood prices coming down slowly and that continued in the first quarter.

We talked a lot about sawlogs as well, and we said we don't see anything happening, also sawlog prices are coming down. We will come back to that when we go through Wood Products, but also there, we see that sawmills are not running full in the first quarter. In our case, this is actually the same slide as we showed a quarter ago. And the reason for that is that we hardly buy anything in the market.

We are fully occupied, helping forest owners to take care of the wood that came down in the storm in the middle part of Sweden. We also moved some resources to take care of that. We should also remember when it comes to us that we have -- should we call it the backpack, we have harvesting rights that we have bought before. And the question and what we don't know to a full extent is how will we do during the rest of the year when it comes to the balance? How much will we harvest in the area where we had a storm? And how much will we harvest in other areas and also consuming what we have bought, say, some quarters ago?

This is the situation we have. And I can say a few words about the storm as well. And 10 million cubic meters in total, roughly 300,000 cubic meters in our forest. As I said, we are relocating some harvesting resources, take care of what's lying down, not only on our land, of course, but also on other forest owners' land. It will lead to some higher harvesting costs but not very much. And as you said, last time Stefan, it will have limited effect on the result for 2026.

So it's a situation where we do see that prices are coming down, but it's very difficult to know exactly when it will be seen in our P&A. I would say it will be after the summer at least. But prices were quite high, and we did harvest some in the first quarter, didn't we?

Yes, we did. The financial performance from the Forest division was quite good, SEK 511 million in the first quarter. That's approximately SEK 25 million higher compared to the same period last year. That's due to us harvesting a bit more in the beginning of this year compared to last year.

Comparing the result in Q1 with Q4, we saw harvesting coming down from the very high levels we saw in Q4, but also that pulpwood decreased a bit, which also took a toll on the result in this division. Despite that, profit quarter-over-quarter increased. That's due to the write-down of the harvesting right that we did in the fourth quarter. Can also add Henrik to the storm that we will most probably harvest a bit less on our own forest during this year compared to a normal year, due to the fact that we are reallocating harvesting resources to help other forest owners taking care of storm felling this year.

Correct. Let's move on to something totally different, Renewable Energy. And we actually only have one slide, but you can talk a lot about this slide, if you want. Most important part is after 2 years with very low prices up in the North, which you can see here, it's a number of quarters, and we have been standing here saying electricity prices are ridiculously low up in the North. We had Arctic weather in January and February. And as you can see, we had more or less the same price in South of Sweden, North of Sweden, even Germany, roughly SEK 1,000 per megawatt hours in January, February.

In March, then prices came down again and something more or less the same path at least as before. But I think we have to remind ourselves also that it's quite the thin balance. Obviously, in January and February, arctic weather means very cold, no wind. And the weather is important to how electricity prices actually develop. And when I say thin balance going forward, I mean that it will come more transmission capacity, but we'll have to wait a bit until '27, '28, roughly 700, 800 more megawatt hours or megawatt to be able to transmit the electrons from the North to the South or rest of Sweden. And there are also a number of projects, electricity consuming projects on its way. But until then, I think we will live with a bit of uncertainty and weather permitting when it comes to the electricity price.

Stefan, high prices in January and February.

Yes. That also means -- high result, very good result, of course, from the Energy division due to the high prices that Henrik just mentioned. We can also add that we did commission our Blisterliden Wind Farm in the end of last year and ramped it up during the first quarter that added some production capacity to us in the first quarter, which also gave some tailwind to the result.

I think we can also remind the listeners to what we said about Board and Paper. We'll come to that a bit later, but when you have weather like that and you have much less volatility in the electricity market. That we saw up in the North, but we also saw it in the south of Sweden. And we said also at that time that some other profitability will definitely move North from Board and Paper to Energy, and this is exactly what we see here.

All right. Going on with Wood Products. Well, also here, we had some hopes when we came into 2025, I think I said that last time that 2025 could be the year when things were picking up a bit, and then we had the tariffs and it didn't really happen. And then in the beginning of 2026, I think we definitely saw some signals that things were starting to get better. But then we got the war in Iran and some other things, making it bit more uncertain and people not investing in construction, et cetera, which we are in a situation where we can just see that where the construction market is still rather weak.

If you then take a look at the other side, not the consuming side but the supply side of wood. Starting with Canada, we said it a number of times that in -- especially in the western parts of Canada, British Columbia, we had the bark beetles. We also have a lot of regulations from the -- in the state-owned forest.

In Germany, you can see spike also a part of bark beetle infestation and we had to take care of -- they had to take care of a lot of timber or sawlogs in the forest. And after that, well then logically, supply comes down a bit. And I think right now, we are in a situation where it's not that easy to -- especially when it comes to spruce, supply is limited.

In Sweden, we have discussed for a long time and said, why -- or it's a bit strange. It's the only place actually where we can -- where we have seen that production has just continued as before. Now in the first quarter, we saw that production was coming down also in Sweden and also in south of Sweden, where prices have been extremely high.

Now as we speak, we also had the storm, of course, which could affect the figures going forward in the second quarter, but it's a bit early to say. But we do see that sawmills are not running full simply as the cost for sawlogs are extremely high. Our customers, when it comes to prices, well, normally in the beginning of the year, you see a little bit of an uptick in prices which is quite normal this year. We haven't really seen it. Maybe we've seen some tendencies, but overall, not really. And as you can see also in the U.S., it's been very volatile, but no real price increase.

So it's a fairly tough situation, Stefan, isn't it?

Yes. Yes, it is. And the operating profit from this division is still negative, pretty much in line with the previous quarters that we have seen. Slow demand in combination with still high raw material cost is the reason for this weak financial performance. I don't think it's that much to elaborate on actually when it comes to Wood Products, Henrik?

I think both for -- we will come to Board and Paper, but the raw material cost is a bit too high for the Swedish industry right now. That's quite clear. But it's coming down slowly but steady. Board and Paper. Starting with Board. Same situation as last quarter. Demand is not really ticking up. A lot of players are looking at Europe as a potential market. After discussions at least about tariffs, et cetera, and uncertainty in -- between different continents in the world, prices in our segment, stable. But if you look for marginal volumes somewhere, especially if you go outside Europe, of course, it's quite fierce competition for the volumes. And as supply-demand balance is bit weak as we have added some capacity as well, of course, it's a fairly challenging situation to run. I don't think anyone is really running full. We are not running full either, but we have I'd say, at least a healthy order book and a bit better than the market average.

When it comes to Paper. It's almost the same story, but for slightly different reasons. We know that demand is coming down slowly also here, structural decline. Again, prices are fairly stable. Also again, when you look for marginal volumes, it's a bit tougher competition and also depending on which segment you are. In our case, book paper and the higher you come competing with higher-priced products, the better the situation you find.

And when you compete in the lower segments, it's a bit tougher competition. Also here, we have no intention to run full, but we we have an order book which is fairly okay actually. But still in the market, in general, supply-demand balance is not good. And it hurts, of course, also fixed cost per tonne when you have to distribute it over less tonnes than before.

Maybe we should start also mentioning the electricity situation when it comes to Board and Paper, as we said last time that there is not the same volatility in the market, which we need to make sure that we can make use of the volatility to make some money. If you would like to comment before we take the result?

No. I think you can change slide to the result, actually. And it's, as you say, Henrik, it's a weak result this quarter, partly due to the high electricity prices that we have seen during the first quarter that affects the part of our production that is not fully hedged. Also, prices were not only high, as you say, they were also stable. That meant that we had a much tougher time to maintain this lower-than-normal energy cost levels that we've seen for a couple of quarters now, because that's dependent on this volatility that wasn't there during the first quarter.

Also, Paper prices went down a bit if we compare with the same quarter last year, and we have the weakening of the dollar that also took a toll on the result for this segment.

Yes, totally agree. Just a couple of words maybe because in this quarter, I think our business model with different business areas, kind of helping each other depending on the situation has really been favorable for us and also making it possible to deliver result, which is fairly okay, even though we would have liked to make more money as always, of course.

I think by that, we are fine, and we are happy to take on any questions you might have.

[Operator Instructions] Our first question comes from Ioannis Masvoulas at Morgan Stanley.

Just a few questions from my side. Starting with the first one, on the Board and Paper, we saw volumes coming down between 6% to 7%, sequentially and year-over-year. Could you provide a rough split between Board and Paper segments? And you talked about the softer demand overall, but is the lower volume just a function of retreating from the spot market? Or are there any adjustments to contract business as well? And I'll stop here for the first one.

Well, when it comes to deliveries compared to the first quarter last year, it's mainly Paper that came down when it comes to deliveries, just a slight decrease in the Board segment, but that's just normal ups and downs, I would say. So it's more the challenging Paper situation that Henrik described, it caused us the lower deliveries.

But it's not dramatic. And you will see, if you look at the different quarters that there are some changes between them. It's -- no, it's not a big thing to be honest.

Second question, just again on graphic paper. We've seen some modest increase in the market over the past couple of months, while we had chemical and transport costs going higher. How should we think about the margin evolution here for Q2 and Q3? And do you expect to see more price hikes coming through over the next few months to restore profitability?

I think you're absolutely right. There are some discussions and some prices are coming up a little bit. And at the same time, as you say, we also have a lot of vessels going through Africa or around Africa, et cetera and a lot of containers being stuck on the oceans, meaning that container freights and freights in general are going up. I think we have to -- if you go back to the pandemic, where we had prices coming up, they came up a lot. We had a slightly different situation then. We didn't have the LNG terminals to the same extent in Europe.

We had a different price level for recycled fibers. And we also -- it was a different situation. And we are not there yet at least. And then we will see what happens. But right now, yes, we do discuss, but you know how life is changing day by day when you follow what happens in -- especially in Iran. But if it continues to be a scarcity of energy, then normally simply the cost for all producers come up and then it will be compensated normally. But we are not really there yet.

And last question for me, just on the Wood price development. You mentioned that sawlogs has started to turn and pulpwood prices continue to come down. How should we think about the cost into your industries for the second quarter on pulpwood? What sort of improvement or percentage improvements shall we expect? And then on the sawlogs -- on the sawmill business, when should we expect the lower wood costs to be reflected in the P&L?

Stefan?

Well, it's quite hard to distinguish because it depends on how much we will harvesting in the storm area compared to the harvesting rights that we bought earlier. It is declining, both pulpwood prices and sawlog prices are coming down, but it's a quite gradual decrease. So we cannot provide you with any percentage number just that they're coming down, but it takes some time, and it goes slowly.

But we also have the harvesting rights in kind of our backpack, which we have to consume some which we have bought to a slightly different price, of course. But after the summer, not before.

Okay. So for the one segment, then shall we expect would cost still go up sequentially in the second quarter or potentially turning more stable or even slightly down.

Rather stable or slightly down?

The next question comes from Linus Larsson with SEB.

Continuing on Board and Paper. Just trying to understand the impact of aspects of energy -- energy costs in the quarter. So the EBIT of SEK 168 million was SEK 286 million lower than in the fourth quarter. How much of that was relating to, how should we say, aspects of energy and also going forward, where that you had very high spot prices for electricity at least in the part of the first quarter? Now that's easing for seasonal reasons. And given how you've been able to play the market in the past, what should we expect in Board and Paper with regards to energy optimization in the second quarter and beyond?

Very good question.

Yes. Shall we start with the Q4. There, we had some one-offs, Linus, of approximately SEK 120 million from emission rights and green certificates. That's not included in the first quarter results. So that explains part of the decrease in result. When it comes to the energy situation, I would say, Henrik that we had quite a normal cost level when it comes to energy in the first quarter. High prices affected the part that was unhedged. And we managed to gain some earnings from the volatility on the electricity market but not at all on the same extent that we have seen a couple of quarters ago.

Would you like to add anything?

No, no, we need volatility and there wasn't much volatility in the first quarter. That's clear. And the other ones items you have explained. Good question, Linus. Not easy to know exactly how to answer it, I'm afraid.

But how has the second quarter started in that regard?

Pretty much the same in the first quarter, to be honest, prices has came down, but volatility is still limited.

Okay. And then maybe on FX, what -- I mean on a -- like if we look sequentially, have we seen the worst in FX? Or I mean, given your hedging profile, et cetera, have we seen the worst? Or is it still deteriorating? Or could you give us a feel for where we are in that cycle?

More or less, we've taken the full effect of the weakening of the dollar. But as you know, it moves quite rapidly from day to day. So it's hard to say where it will be in Q2. But the main part of the weakening of the dollar is included in our result. And as you know, the euro is hedged for 2 years. So we'll see how the dollar will develop going forward. But I think we've seen the worse so far.

Yes. Good to know. And then just finally, I mean, you're in very good shape, actually, given the circumstances, doing really well at the trough of the cycle, which we believe where we're at. What's your thinking on capital allocation and in particular, buybacks at this stage?

I think it's quite normal that all companies also, we -- of course, we think carefully before we invest a lot in the industry in these days. Then we have to always keep our things in shape, and we usually say that it less than SEK 1 billion?

Yes. That's a normal CapEx level.

That's where we are.

And no news when it comes to the share buybacks. We have the mandate from the AGM, but the Board needs to decide on any further buybacks before executing if so.

But the mandate is there.

The next question comes from Melbye Martin in ABG.

My question on Board and Paper was answered, but I could do another one. So what do you foresee of price changes for Q2 regarding Board, Paper and Lumber, please?

I think in Board, if you start there, you know what we usually say when it comes to our long-term business in our niches where we are, it takes a long time to change prices. And that's where we are also today. Then when it comes to marginal business, then -- it is a fierce competition, of course. And a lot of people are looking at Europe as a potential market. That's clear. But you have to distinguish between the long-term business and spot business.

Paper, it's not easy to say where it's going. It's also there for us. It's pretty much stable. And what we have to understand what can happen is look at recycled fiber prices is coming up a bit. Other cost is also coming up. We discussed chemicals before. And the overall supply-demand balance in the business is not very high. So it hurts when cost comes up and you can't just reduce prices. Most players can't. There is no margin to play with.

That is holding back because normally, when you are in a situation when you have overcapacity, normally prices go down, but that's not what we have seen really. Then we have to look at the different -- it's cost for energy, cost for chemicals, it's cost for recycled fibers on the continent. And for us, it's, of course, cost for wood and electricity.

In Sweden, what I said before is that, of course, if you look at our cost competitiveness overall, not only us, but all of us producing up here now raw material costs, they need to come down. And that's also a difference between when you had a pandemic, then our raw material costs were lower. Wood costs were lower. It's coming, but it takes some time.

The next question comes from Pallav Mittal with Barclays.

So you were talking about some fierce competition for marginal volumes on the Board side of things, especially outside Europe. So can you just talk a bit more about that dynamic? And are you seeing any changes due to the Middle East conflict in terms of trade flows in and out of Europe?

It's a good question. Thank you, but maybe I should be a bit more detailed when I explained it before. We don't see a lot of competition from, for example, Asian producers trying to sell to our customers in Europe. But as an industry, as a total of the European industry, we are dependent on being able to export also to the U.S. and to the China to make it easy. And there we see more competition when we -- what we normally export to other parts of the world. And that's normal also where we do our spot business or let's say, not long-term business, but marginal business for us. Some is also long term, but then it's a different ball game.

[Operator Instructions] Gentlemen, there are no more questions.

All right. Then thank you very much for good questions, good discussions for taking the time also to talk to us and look forward to see you soon again. Thank you very much.

Thank you.

Good afternoon, everybody, and welcome to the year-end report presentation for the Holmen Group. It's me, Henrik and Stefan, as usual, now, I must say. Thank you. You are most welcome to listen to us. We do the presentation, then we're happy to take all your questions, and we are especially happy that you take your time on a Friday afternoon like this.

So let's start. I think if we just make a very quick summary of the year, it felt like we were a bit optimistic in the beginning of the year. But after a while, it changed into geopolitics, tariffs and also cautious consumers not really spending and also construction business that didn't really take off. But we'll come back to that a bit later.

Despite challenging market conditions, we were able for the full year of 2025 to deliver close to SEK 3.3 billion, which is we consider as fairly good also in the fourth quarter. But I think in the fourth quarter, we'll come back to it when we go through the different business areas. It makes more sense.

If we then take our industry, which means our right now, loss-making sawmills and Board and Paper, we've been able during the year to deliver return on capital employed of 15%. And based on our performance and also our financial position, we had a Board meeting this morning where the Board of Directors decided to propose to the General Annual Meeting to increase the ordinary dividend from SEK 9 to SEK 9.50. And just to remind ourselves what we have distributed to our shareholders. The last 5 years, in total, SEK 13 billion in dividends and buybacks. And given, as I said, our financial position where our debt-to-equity ratio is at the current moment, roughly 10%. We are in a solid financial situation.

All right. Then a few words about the wood market, and we come back to forest and forest evaluation, Stefan, a little bit later. And if we start with the fourth quarter, of course, and then we will also comment on the storm a little bit, which happened in January. But what we saw in the fourth quarter was that the industry is running at a bit lower activity and also lower -- a little bit slower demand for pulpwood and prices have come down a bit and price lists have been adjusted. But what you see here, remember, this is delivered to our mills, both pulpwood and sawlogs in the fourth quarter, meaning it includes also logistics and administration costs.

On the sawlog side, however, we see that prices were largely unchanged, most driven by the sawmills. We see that most sawmills, almost all the sawmills in Sweden still have been running at more or less full capacity. And you can see that in the statistics, which we will also come back to when we go through the sawmill operations. This is the situation we had when we ended the year and then came the heavy storm in mid-Sweden in January.

To start with, it has limited effects on Holmen. But just to give a figure on what this is, this is roughly 10% or 10 million cubic meters is roughly 10% of what we normally harvest in a year in Sweden in total. In our case, a bit more than 300,000 cubic meters in this area is also roughly 10% of what we in total in Holmen forest land harvest in 1 year. And in this area, where we have now 300,000 cubic meters laying down, it's roughly 1/3 of a yearly harvest. What will happen to that is, of course, that, that will be more local supply and exactly what kind of effect on the local market in terms of pricing for pulpwood and sawlogs. That's a little bit early to say yet.

But Stefan, before you talk about the result, will it cost us a lot of money to take care of the trees now laying down?

In general, looking back at what the costs have been with previous storms, we see that the added cost for taking care of these kind of volumes is approximately a bit more than SEK 100 per cubic meter. So for the next year, maybe SEK 30 million to SEK 40 million that will increase costs in the Forest division.

Looking at the results for the fourth quarter, that amounts to SEK 403 million. It was heavily negatively affected by a write-down of felling rights of some SEK 160 million. The Forest division in Holmen is not only responsible for the management of our own forest, but also for the supply of wood to our industries. The write-down that we did in Q4 refers to felling rights concerning the sawmill operations. And as you will see later on in the presentation, the financial conditions for the sawmill are really challenging for the moment. That also meant that we needed to adjust the value of these felling rights.

Underlying performance in the Forest division was good in Q4. If we exclude this write-down, the result increased by some SEK 25 million compared to the third quarter, and that is mainly due to higher harvesting volumes as we harvested a bit more than 800 cubic meters in Q4.

Moving over to the updated valuation of our forest holdings. As you know, we usually do this exercise every fourth quarter every year, so also this year. We own 1.3 million hectares of land, approximately 1 million to 1.1 million hectares of that is the productive forest land, and it is that part that is included in this valuation. 65% of our holdings is up in the northern part of Sweden, as you see from the map to the right, 25% in the middle part and some 10% in the southern part of Sweden. Our holdings consists of more than 4,000 individual forest properties with an average size of close to 250 hectares per property.

The valuation that we do is based on transactions with forest properties in the areas where we own forests. We include transactions from the last 3 years in our model. And as you can see from this table, that means that we have included close to 1,000 transactions in the valuation model. The average size to the right in the table of the market transacted properties is 100 hectare per property, while ours are 2.5x the size of that, and I will come back to that later on.

Looking at the historical development of property prices in Sweden in general, we see that it has been quite a steady increase over time. And from 2005 up until today, the annual increase in price has been 4.3%, which is a bit more than 2x the inflation during the same period. To that, of course, we should add the cash flow, et cetera, from the owning of these properties during this time to get the full financial result. Historically, property prices have tracked wood prices quite well. What we have seen in the last couple of years is that the increase in wood prices has not yet at least been reflected in the property prices.

Coming back to our Forest. The value based on this updated valuation is SEK 57 billion. That is a small decrease by 2% compared to the same period last year. And the decline in value is due to the fact that we -- this year does not include the year 2022 in our valuation model and that particular year, prices for forest properties were higher than normal.

We also do a reference valuation every year. This year, it was in Västerbotten up in the northern part of Sweden, where we have 370,000 hectares of land. The outcome of the external valuation were on par with our own model. There is although a size premium in the market, meaning that larger properties trade at a higher price than smaller ones. We don't include that in our model, and it has not been included in the external reference valuation either. But if we would have included it in the external valuation, prices would have been 8% higher.

Correct. But we do not take into consideration that we own forest land based on company-owned forest land either, which normally goes at a substantial premium.

Correct. So it's an upside from that perspective as well.

Okay. Thank you very much. Totally different subject, renewable energy. And here, we have been standing here, Stefan, for some quarters now and looked at very low prices in the northern parts of Sweden. In the fourth quarter, we saw that also prices in SE2 northern parts of Sweden, increased a bit. You will come back to what it means in terms of earnings. But I think we also should include January because -- and do this in kind of 2 phases because it has happened quite a lot lately.

In the fourth quarter, we can see that the difference between the different areas, both Germany and SE2 and SE3 it's roughly the same distance. It's like a parallel shift. But if we look at what has happened now in January, it looks a bit different. In the fourth quarter, we should add that there is a cable from SE1, northern -- absolutely northern parts of Sweden into Finland, which has had some impact. We also know that when we were a bit negative about the outlook because we had so much water in our reservoirs. That's no longer the case.

Since the autumn, the water levels are on a normal level. And right now, when we have had for some time, should we call it Arctic weather with dry weather, there is a different situation. All of a sudden, now we have a situation where actually the marginal price for gas is setting the price for electricity in the whole of Sweden, gas in Germany. And how can that be?

Well, for some reasons. First of all, as I said, drier weather, less water for the hydropower installations and also the cable to Finland has had some impact. But what we also see here is that the price is fairly stable. It hasn't changed much during January, meaning no volatility or not as much volatility. For us, that means when we make money on the electricity market, especially in our Paper division, it's based on volatility. When there is less volatility, as the situation is right now, we make more money. It's like a shift from Paper to our Energy division instead. Nobody knows how long this will stay, but it's kind of a new situation where, again, less earnings based on volatility in the South in our Paper division, but more earnings coming from our Energy division.

Then, Stefan, if we go back to the fourth quarter to see, did we get a premium when we were producing?

Yes, we did, as we usually do. We did run our hydropower stations quite efficiently, meaning that we can run them when prices are high and take down production when prices are lower. Harder though to run wind power farms. We did curtail our production from the wind power also during the fourth quarter when prices from time to time were really low. Result-wise, it is an uptick compared to the loss-making quarters that we've seen the last couple of quarters.

As Henrik said, prices went up in the fourth quarter, but not to a historical normal level. But of course, if we compare to the situation as it has been earlier this year, it's a clear uptick. That is reflected in the result and also the fact that we had some seasonally higher production in Q4 that also gave some tailwind to the result.

Yes. Thank you. Over to Wood Products. I said already in the beginning, our loss-making wood products, but you'll see that a bit later. Let's start by having a look at the market. I said already in the beginning as well that the construction market is not really taking off. We can see it in the U.S. that demand is not really taking off. Same in Germany, where demand also is not coming up really. And it's also the same when you look at production in Canada, especially in the west side of Canada, production is down quite a lot. And we can also see that in Germany, not only demand is on the lower side, also production has been on the lower side. It's one place, though, where production has not really changed. I think it's only us more or less that have reduced our capacity, especially at our sawmills in the south of Sweden.

But if you look at the total in Sweden, North and South, still the Swedish sawmills are on more or less same production level as before. And of course, that has also an effect on what I said before when it comes to sawlog prices that they haven't really changed yet. Now Stefan we are in the beginning of the year, we are always thinking that and they normally do. Wood products prices normally have an uptick. They go up a bit in the springtime when the retailers, et cetera, they buy before we come out there when the weather gets better and we build our verandas and other things, renovate houses.

What happened this year is that, well, prices went up a bit during the spring time. But if we look at the price level right now, we are more or less on exactly the same level as we were a year ago. And the difference is that the sawlogs are a lot more expensive than they were a year ago. And especially for us in the southern parts of Sweden, it's really, really difficult to get plus and minus to go together.

So given where we are and what we have done, Stefan, it's not very nice reading, but what can we say about the result?

You leave it to me. Thank you. As you said, Henrik, very challenging market condition, and it continued in the fourth quarter when prices went down a couple of percentage points quarter-over-quarter. Wood costs still on same high level as it has been during the autumn, meaning that the result wasn't nice reading and the operating profit was actually a loss of SEK 111 million.

That's it. Maybe we get the question about that a bit later. Let's move on to Board and Paper. And also here, we see that -- I also said that in the beginning that the consumers, they are a bit cautious. But just to clarify, if we look at the bar for '22 and the bar for '23, it looks like we lost a lot of volume there. Remember, this is also -- this is -- half of it at least is what we used to deliver to Russia, which is no longer in the statistics as Russia was seen as part of Europe.

But you can see that in 2025, also, as I said before, it's not really taking off. We are not back to where we would like to be, and it's more or less going sideways. There is a little bit of a difference between folding boxboard and solid bleached board and maybe especially for us as we have quite a lot of solid bleached board. There is some price pressure for folding boxboard, I would say stable prices for solid bleached board. But I don't think anyone in this business are running absolutely at full capacity utilization rate right now. And especially if you look for marginal volumes somewhere, of course, then it's a bit of difficult to find it, first of all, and also a bit of price pressure trying to get new orders. That's the situation for board.

Our order book, I should mention it, I said we take some market-related downtime also we do that. And we have to be a bit cautious as well how we do when we try to fill our order books.

If we then go to Paper, Well, we have talked about structural decline for a long time. And you can see for the last 12 months, it's down a bit, and it's roughly the same pattern as before, 8% to 10% somewhere there. Also here, it's -- I would say it's astonishly stable pricing given the huge overcapacity we can see in the market. There is also overcapacity in the board market, but here, we've been used to it. But I would guess that we are running at so low operating rates also putting kind of a floor to what can be done when it comes to pricing. And that's why, I guess, prices are fairly stable because they are.

And here, we are doing okay. Also, we take downtime, but the rest of the market take even more downtime and it's the same when it comes to board, we take less than the market in general. And we cannot really expect an increase in demand here. It's just to make sure that we are the most cost competitive ones and make sure that we have the best product development in order to fill the machines with orders where we can make money. But wood is more expensive, Stefan?

It is. And market is challenging here as well. Despite that, we report a high result from the Board and Paper division in the fourth quarter, partly included some higher-than-normal income from green certificates in the U.K. and also a bit higher than normal income from emission rights. Deliveries were although quite low in Q4, mainly due to seasonality, but that also meant that we needed to curtail our production a bit more than earlier this year that took a toll on the result in the fourth quarter. Energy costs were still lower than normal in Q4, but maybe not to the same extent as what we saw in Q2 and Q3.

And as Henrik mentioned, talking about the electricity market, it is more challenging as we see the market behaving today to maintain this lower-than-normal energy cost level in the Board and Paper division. But on the other hand, we gained some or at least right now from the hydropower and wind power production up in the northern part of Sweden.

Well said, I think we are done, aren't we? We are, and we are happy to take any questions you might have, unless you have something more you want to say.

Totally fine.

[Operator Instructions] The first question comes from the line of Linus Larsson from SEB.

Maybe starting with Board and Paper, who had another good quarter in the end of 2025, but I understand there were some support. You mentioned U.K. green certificates, the carbon emission rights. If we dissect the division just a bit and put numbers on such items, it would be helpful. And also if you could please maybe guide us a bit into the beginning of 2026 on those.

Yes, Linus. If we take the higher-than-normal income from the green certificate and the emission rights in combination with the lower-than-normal energy cost, we see that those items together affect the result by approximately SEK 250 million in the fourth quarter, quite evenly split between lower-than-normal energy cost and the emission and green certificate.

Great. And I mean, we've seen similar patterns in previous quarters. What do you expect for the first quarter? What is disappearing possibly?

It's very hard to predict how the energy market will trade in the first quarter. But as Henrik said, talking about the energy market, the volatility that we have gained from the last year, we don't see that high volatility in January so far, meaning that it's much harder for us to maintain this lower-than-normal level of energy cost. When it comes to the other items, they are quite evenly spread over the year. So there's nothing unusual on those, but it was in Q4, it was a, so to say, one-off effect from those.

It's a bit weather permitting, Linus. No, but it's important to note that it's more of a shift right now than a loss. Volatility -- without volatility, it's very difficult to make money from the volatility. On the other hand, when you have this kind of weather, then you have high prices up in the north.

And other companies have reported of the sale of excess carbon emission rights disappearing in the beginning of 2026. Do you see the same thing in any of your mills?

Yes. We lose approximately 30% of our allotment next year as the Iggesunds Bruk mill is not longer part of the system due to them performing too well actually.

All right. And if we quantify that, how much would that be in terms of tonnes or millions for that matter?

On an annual basis, maybe SEK 50 million.

The next question comes from the line of Robin Santavirta from DNB Carnegie.

Can you just provide some more color about the write-down you made in the quarter? Just wondering if this is basically writing down expensive wood raw material for your own timber business? Or how does that work?

No, it's actually so that if you run a business that is loss-making, then you need to take down the value of your raw material cost -- raw material stocks because you cannot use the value of it in your production units as you are loss-making. So it's more of the sawmill operations running with low result that affects this item.

Okay. But partly the reason for the weak performance is the high wood cost.

I totally agree.

Just trying to understand whether you enter now in a way with lower sort of wood cost outlook into 2026 for the sawn timber business and whether we should expect sort of relief in log pricing that is a bit bigger than what we can see in the market?

We don't see any major shift, as Henrik said, when we look at the timber market, prices has not yet come down. We see that they have flattened out, but they're not coming down. And also, you know that we have a lag in the system, meaning that any potential shift in the market, it takes some time to run through our system.

I understand. Now can I ask, when I look at the log prices in Continental Europe and availability, I mean, it's tight and the prices are even higher than in the mid part of Sweden and clearly higher in Europe compared to northern part of Sweden. Still some of those sawmills generate profit, I understand. How does that work? Is it so that they have exposure to different segments? Or what is the reason you would expect them to be bleeding with EUR 150 per cubic for sawlogs that we can see in many markets. Maybe the dynamics here that I'm missing?

I don't think you are missing anything, Robin. It's -- still in Sweden, we have quite big differences between northern and southern parts of Sweden. And as Stefan said as well, what we are consuming now, we bought some time ago.

But it's very hard to comment on other players' financial performance, to be honest, Robin.

Yes, I was trying to understand, I mean, the dynamics if -- I mean, the log prices are high, I understand that, but you would expect the end product price start to increase as the raw material is expensive across essentially Europe and in Canada as well. But I guess we need demand for that to happen.

I think we need some more demand, absolutely. But I think it's also important to note that we have said if we go back some quarters that there's a scarcity of sawlogs more or less worldwide. That hasn't changed so much. But right now, demand is not enough to make prices go up. But I don't think so much need to change before you see wood products prices to start climbing. U.S. should be...

Yes, go ahead, go ahead.

U.S. is such a place which we should have a close -- we follow it closely, of course, but -- and it's a little bit up and down every week now. But obviously, demand is not enough, even though they are very dependent on the Canadians, and they are partly dependent on us as well. And production has not increased a lot in the U.S. So we have to wait and see, but I don't think it takes so much to turn around the picture or to change the picture.

Okay. I understand. I understand. Final one for you guys. Looking at the Board and Paper, now we hear from you and other your peers that demand is still quite weak, and we have more capacity, certainly in board, not in paper, but capacity utilization in both are quite weak. On the other hand, we can see energy prices, gas and power in Europe going up quite significantly now recently. How should we expect prices -- sales prices to develop in paperboard and paper early '26?

I can only agree. You are right. Gas prices are up now a lot, and that has an influence on production cost in Continental Europe as well as in Sweden, of course, when we have these electricity prices. But also the long-term trend for gas is not up. It's rather flat or sideways or maybe even down. So it depends a lot what will happen. Right now, it's the weather, to be honest. And people are a bit scared that they will not have enough gas and all of a sudden, you have a spike. And with the conditions we have right now, the marginal price for gas in Germany goes all the way through up into the northern parts of Sweden. But of course, when we produce in paper mainly, we have hedged our electricity price. So really high gas prices, of course, it's good for us if it stays like this. But if it will, I don't really know.

But is it enough then to support pricing this combination of essentially capacity utilization quite weak across Europe and then this sort of energy prices?

You are right again. It's about costs. it's not that we are in the driver's seat because operating rate is over 90%. That will not happen. So it's about cost that you can't produce unless you get coverage for the cost. And I think it depends on how long this goes on.

The next question comes from the line of Pallav Mittal from Barclays.

So firstly, on the Board and Paper side of things, can you just let us know the split between Board and Paper? And also, I mean, you definitely highlight weakness in consumer paperboard. Can you now give some more details around how have tariffs impacted the industry so far, given a lot of movement between June and December of last year? And do you expect any change in the near term?

A bit hard to catch your question, Pallav, but I think the first one was about the split of operating profit in the Board and Paper divisions. Main part of the annual result is referring to the Paper division this year due to the lower-than-normal energy cost and also that we had 2 major maintenance shuts in the Board division. Maybe you can take the other.

Maybe you can repeat what you said about Board and especially Board, wasn't it?

Yes. On the Board side of things, how have tariffs impacted you so far? And are you seeing any changes in the way you are interacting with your customers?

Well, our exposure to the U.S. market is quite limited, Pallav, when it comes to both Board and sawmill and Paper. So the direct effect from the tariffs is quite limited for us. It's rather the dynamic effects when people that usually exported a lot to the U.S. is taking volumes other places where Europe is a natural part for some of those. So that's more of the dynamic effects that affects Holmen rather than the direct hit from tariffs.

Sure. And if I can just ask one on your balance sheet and the returns to shareholders. So your net debt-EBITDA leverage is now around 1x, but I don't see any incremental share repurchases or any plans. So can you just comment on that? What are your plans with capital returns?

If it was CapEx next year or is it maintenance? So let's start with CapEx. We can take both of them. I think you can expect CapEx to be much lower next year compared to 2025 when we have the wind farm in Blisterliden being built. So maybe a bit higher than SEK 1 billion next year in CapEx is reasonable to assume. When it comes to maintenance shut, we have shut in the Iggesund mill next year, which we have annually. It's in the third quarter, and the estimated effect on the P&L is SEK 150 million.

The next question comes from the line of Lindstrom Oskar from Danske Bank.

Two questions from my side. First off is coming back to this issue of the gas price spike that we've seen in Europe and the effect it's had. How quickly does that have an impact on the cost for producers in Continental Europe? What's your sort of understanding of how quickly that feeds in? Or does it take a long time? Or is the spot price relevant? That's my first question.

I think it has an impact quite fast actually because you take business today that you are supposed to deliver in 2 to 3 months normally. You have to take a decision today and make your best forecast, what will be your energy cost when you are about to produce and deliver. So in that sense, it has an impact already now that all producers dependent on gas for their production should be a bit more cautious. What the end effect will be, I don't know. And how long it will stay like this? Well, the longer the better for us, of course, but that's a bit more difficult to understand.

A follow-up. Have you seen any tendency among your competitors to essentially raise their prices in reaction to this?

I can't say we have seen that yet, but...

By asking you. The second question is on Board. And I mean, you operate in a large part in solid bleached board, which is sort of a niche premium segment within the overall board market. It doesn't seem to have been impacted by the type of sort of increased Asian competition in export markets, which we've seen impacting the liquid packaging board niche segment. Should we expect the solid bleached board market to be sort of immune to this wave or waves of Asian capacity and competition or...

I think you're right when it comes to that part of the business. But as I said before, we are not running totally full either. We take some market-related downtime. And if you want to get an extra order as a marginal order, it's very difficult, especially if you try to get it from Asia. But we have not been affected directly, but indirectly, you can say we do feel the competition.

If I may ask roughly how much of your board or of your solid bleached board is exported outside of Europe? Or goes to Asia in fact?

It's a good but difficult question because we have a lot -- quite some deals, which we make in different continents than where we deliver the volumes. And again, once they are there, they are sold somewhere else in the world. So we deliver quite a lot to Asia, but it's not Asian business.

Right. But you don't feel that we, as analysts or people as investors need to be thinking that you could -- a lot of your current SBB volumes are being very, very challenged in the way that we've seen in liquid packaging world.

Not yet.

Not yet. Those were the 2 questions that I had. The other ones have been answered already.

The next question comes from the line of Muir-Sands Charlie from BNP Paribas.

It's Charlie here. I just wanted to follow up on a question that wasn't fully answered before around capital allocation. You have not declared any extra dividend this year. How are you thinking about balancing your leverage and capital allocation beyond the SEK 9.50 increase in -- a small increase in the ordinary dividend to potentially an extra dividend at a later date or a buyback?

No, we are -- we feel that we have a good position, the one we have right now when it comes to our financial position and the 10% net debt is fine. But we would never, ever jeopardize anything when it comes to our financial strength, if anything comes up that we think we should spend money on. And given the challenging situation in the market, but also that we are in a fairly good position, we find that an increase, it's 5%, 6%. It's not that small increase. It's balanced given the situation we are in. There are also some uncertainty in the world that we don't have in our own hands. So that's why we landed in today proposing a dividend of SEK 9.50 and no extra dividend as we see things right now.

Understood. And then the second question I have is with respect to the pulpwood price. As you indicated, the delivered cost for you has only just dipped a little bit. But clearly, some of the stumpage prices have started to fall quite significantly now. Which quarter in this coming year do you anticipate it starting to manifest as a particular material tailwind in your input costs? And the same question, I guess, if there's any signs at all of movement on stumpage on logs as well.

But as you say, pulpwood prices are coming down. We have changed price lists a number of times already now, but that's not the same as that you have bought a lot to cheaper prices. But I think you should wait a little bit to see what happens with the storm and the it's rather big volume, to be honest, at least outside our Iggesund mill, to be honest. Laying there, we move our capacity, and we do the deals right now to see where the price will land. That will have an effect locally at least, how that will spread and if it will make things go faster when it comes to especially pulpwood coming down, most likely, but how much it will spread and how far down it will go, it's too early to say.

The next question comes from the line of Cole Hathorn from Jefferies.

I'd just like to follow up on the chart you put out on Slide 13, looking at the price of forest properties and the nominal wood prices. Just so I understand this, you made the comment that forest prices didn't rise as much as kind of the nominal sawlog and cycle. Are you trying to imply that potentially in the -- if we see some downward pressure on sawlogs or pulpwood, you would hope that the forest property transaction values would be more resilient. I'm just wondering how you're thinking about it into 2026, considering we are seeing and pulpwood prices at least lower?

It's -- as you know, we base our valuation of our forest on deals made by people out in the transaction market. How they will behave is quite tricky to digest. What we see is that the last couple of years increase in wood cost has not been reflected in the behavior from the buyers of forest properties paying a premium based on that. So we have a larger spread now between the wood cost and the property prices than what we've seen historically. How that will play out in the long run, I think we have to wait and see, as Henrik said as well when he comment on pulpwood and timber prices.

But maybe also you can say that, well, wood prices can come down quite a lot before it should have an impact on property prices going down.

You can do that as well.

That's helpful just to understand forest prices might be a little bit stickier. Then I've got another 2 on my side. The first is on board prices. I know you less falling boxboard. I'm just wondering, is there any kind of rough estimate you can give on what is the decline you've seen on kind of your pricing segment, just how we think about into 2026? I imagine ratio, but some help on the quantum would be useful.

And then I'd just like to follow up on the saw wood industry. I know profitability is really challenged. I'd just like to understand if you've got any color from the players in Central Eastern Europe at all around any closures or any shuts that you're seeing there or capacity curtailments in Central Eastern Europe?

So we start with...

Pricing of FB and SB, as you know, Cole, our prices and the prices in the segment overall tends to be quite sticky. We have not seen any movement hardly at all during 2025. And there is no big movement in our prices for the moment. But as Henrik said, if we want to sell an extra ton of things, then we need maybe to lower the price a bit. But in general, they are quite sticky.

And solid bleached board, it's more like a niche and prices move very slow in case they move. Folding boxboard moves a little bit faster.

The other one was about sawmill operations in Eastern Europe, I think, and potential closure there.

You saw the slide before when it comes to Germany that sawmills are taking down production quite a lot actually. But if they close or not, I really don't know.

The next question comes from the line of Henrik Bartnes from ABC (sic) [ ABG ].

This is Henrik from ABG. Sorry, I missed this, but have I understood it correctly if hydro and wind power are not hedged, i.e., the current higher energy prices could imply a quite large positive effect Q-on-Q in Q1? And could you also please remind me on the seasonal volumes or the weather in Q1? Are they typically more or less wind? And have you seen anything special so far in Q1?

The first one, I didn't catch. It was if we were hedged or not. And we have no hedges in place for our Energy division. So we are trading at spot prices. The other one.

It was about the weather.

It's cold in Stockholm.

But I think also remind ourselves that we started up the Blisterliden wind farm just before the new year. And that timing was good given the situation we have right now. But as I said before, right now, it's stable winter weather, almost arctic weather with -- it's dry weather. There is not so much water in the reservoirs, meaning hydropower is extremely important to keep stability in the grid and there is enough capacity that can be transmitted.

So the volatility is low, both in northern parts of Sweden and southern parts of Sweden right now, but prices are high. It's also less wind when you have high pressure. But remember, we are not metrologists. We're only normal business people. As it looks now, it will stay like this at least for a couple of weeks, but the weather has changed before.

The next question comes from the line of Masvoulas Ioannis from Morgan Stanley.

I apologize, I joined a bit late, so I might be repeating some of the questions. The first one I had, just going back to the Storm Johannes and the impact it had to your business. You talked about the timber sales and how much of that is going to impact cost that was clear. So just a question for me to understand in terms of the implications for the overall harvest volumes. So I guess, you might move some of your resources towards some of your third-party forest owners as you try to support them. What sort of impact could that have to your harvest volumes in Q2, Q3? And could that extend into the second half? Or do you think it's more of a temporary situation?

It's more of a temporary thing, but we have not done the complete analysis on how we will deal with the storms effect, but it should be possible to take care of it in the normal operation, meaning that it should not affect our annual harvesting. But we need to do the analysis a bit deeper and need to come back to that in the next presentation, I think.

But you're right, it takes a bit more hours to take care of is laying down rather than standing up. I said we are a company with capacity, so it shouldn't be the biggest problem for us.

Great. Second question, just again on the Forest. When I looked at realized price, if I look at revenue divided by volumes in the Forest segment, it feels like there was quite a big step down quarter-over-quarter. And I know there is a lot of sort of trading volumes in the Forest segment. So trying to understand if there are any particular aspects to consider for Q4 that might not repeat in the coming quarters?

No. The prices were quite stable quarter-over-quarter if we look at the sales price that we get from the harvesting of our own forest. If you do the calculation as you did, as you said, it's a lot of timber trading included in that. So it's hard to do that interpretation.

I see. Okay. And then turning over to the sawmills where performance and earnings have been under quite some pressure for some time. If we think about Q1, I guess, with the lag effect, sawlogs are probably going to be a little bit more expensive in Q1 versus Q4 and pricing for some good products is not improving. Shall we expect profitability in Q1 to be even worse? And in that case, how are you feeling about your operating rates there?

Well, we have taken down volumes during the autumn. As you know, we've taken down shifts in the Braviken mill in the southern part of Sweden and adjusted at the other sawmills as well. How things will play out in Q1, as Henrik said, it happens from time to time that prices actually increase when we enter into spring season. But it's very hard to predict what it will be.

Wood costs should not go up.

Wood costs should not go up, but probably not go down either. So...

And you're talking about Q1 wood costs not going up?

More or less flattish.

Okay. Okay. Perfect. And then a very last one for me. I don't know if you mentioned at all any energy sort of optimization or trading gains in the graphics segment that you could talk about?

Well, we said that we had some extra income from green certificates in the U.K., some higher-than-normal income from emission rights and also as earlier this year, lower-than-normal energy cost, but not to the same extent as we saw in Q2 and Q3. Total effect of all this item is approximately SEK 250 million in the fourth quarter.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Henrik for any closing remarks.

Thank you very much. Good questions, good discussion. Look forward to see you soon again. Thank you.

Nice weekend.

Have a nice weekend.

Good morning, and welcome to the interim report presentation for the Holmen Group. Today, it's me, Henrik Sjölund and Stefan Loréhn. We will go through the presentation, and then we're happy to take any questions you might have. I know it's a busy day for you, so a special thank you for taking the time also to discuss with us. Well, the third quarter, challenging market conditions, a bit the same message as we actually had after the second quarter, this quarter, well, low demand for wood products. We also have -- despite low utilization rate and very expensive wood, we have, again, a very good result from wood and paper. All in all, a bit over SEK 700 million, a decent result when it comes to Holmen. If you look at our industry, not only wood products, but also wood and paper together, so far this year, during the first 9 months, we've been able to deliver 15% return on capital employed.

And if we look at our financial position and what we have done, Stefan, we have distributed a bit over SEK 3 billion in dividend and buybacks during January to September. And if you look at 5-year period, we have roughly the same debt-to-equity ratio today as we had 5 years ago. We have distributed SEK 13 billion in total during the 5 years. Changing subject to forest and wood market. This time, we do see that pulpwood prices start to decline due to lower activities from the mills. We don't see that sawlog prices still or have started to come down. On this chart, it looks like they have. But in our case, it's because we -- there are also big differences in price still between southern parts of Sweden and northern parts of Sweden. And when we buy less in South and a bit more in North, then it has an effect on the graph, which is what we mean by mix effect wood cost. Pulpwood, on the other hand, the prices are going down. In our case, it's a lag before lower cost reaches our industry and our P&L sheets. Prices are high, Stefan?

Yes, they are. And the result from the Forest division was SEK 538 million during the third quarter. That is an increase by some SEK 20 million compared to second quarter and some SEK 50 million compared to the first quarter this year. The gradual higher profit is due to price increases during the year. Looking at the harvesting levels, we harvested 660,000 cubic meters during the third quarter this year. That is approximately 100,000 cubic meters higher than the corresponding period last year. Year-to-date, the harvesting levels is still 100,000 cubic meters lower than what we saw last year at this point in time, but we anticipate that we will be on par with last year when we closed the books for 2025.

So back on track soon.

Hopefully.

All right. Changing to renewable energy. A very special situation or we've had this situation for quite some time now where we see that prices in northern parts of Sweden, where we have not all, but almost all our production of electricity, well, prices are simply very, very low. And it's not easy to make money when prices are that low. And I think we can just -- well, we know that electricity is locked in, in the northern parts of Sweden, and there is a lack of transmission capacity. How long it will be like that? That's difficult to answer. There are so many things affecting whether the price should go up or if it will stay where it is, tables to, for example, Finland, Norway, et cetera. Stefan, we have said that we have produced with premium to market price. Does it help?

Not that much when we have these low prices in the northern part of Sweden, as you mentioned, Henrik, but still we got some premium above the market price. Maybe we can also comment on the wind power production that we have curtailed during the third quarter, and that is due to the low prices that we see and also the high risk for imbalancing costs. So when we add up the financials, we are still loss-making in this segment, and it's, of course, due to these low prices that Henrik mentioned. Can also comment on the hydropower station in Junsterforsen that is now back into production after the rebuild that we have done there.

Yes. Thank you. Okay. Moving on to Wood Products. I said in the beginning, weak demand, and that's obvious when we look at some charts. If you look at U.S., it's not picking up. It's quite weak. China, very clear, even going down, I would say. And if you look on the production side, well, especially Western Canada, producing less, Eastern Canada, more or less on the same level. Germany coming down quite a lot after we have the spruce bark beetle infestation that had an effect on how much that was produced a couple of years ago, but now on quite low levels. It's only one place where people seem to run the sawmills more or less full still, and that's in Sweden or in the Nordics, but especially in Sweden, but not in the southern parts of Sweden where we have our sawmills, we have curtailed production, especially at the Braviken sawmill. And I think that part of Sweden has also been the most affected by, well, the drought we had and also later on, the infestation from bark beetles. Tough situation for sawmills in south of Sweden, and I think especially where we are. Price-wise, well, in the beginning of the year, as it normally happens, prices went up a bit during spring time. And now when we came into the third quarter, we see that there is price pressure and prices are down some 5% to 10%, depending on which market you look at. And as we speak, it's still some price pressure on wood products prices. A lot of negative things, Stefan.

Yes. And it can also be seen in the result, which deteriorated to SEK -91 million during the third quarter. That is due to the lower selling prices that Henrik mentioned. They are down 5% to 10% quarter-over-quarter. That also meant that we needed to adjust the value of our finished good stocks, which had an impact on the result by some SEK -30 million during the third quarter.

Thank you. Clear. Changing to Board and Paper. Finally, something positive to talk about, Stefan. Now to be honest, if you look at demand, it's not so rosy. We are hovering on a level where we are quite far below actually where we were during the pandemic, and we are still below where we were before the pandemic. And also at the same time, we know that there is more capacity in the market. So it's quite challenging when it comes to board. In this case, it's board. We take paper afterwards. When it comes to prices, well, they are always stable, at least in our segment, we used to say, of course, there are changes over time, but it takes time to change the price. In this case, prices are stable. But when you look for marginal volumes to fill up your order books, then there is quite a lot of price pressure. In our case, our order books are -- they are okay, but not even we are running absolutely full. We take some market-related downtime and in line with most players in the market right now. And as I said in the beginning, cautious consumers not spending to fill up order books in the industry.

Paper, we have been used to a low utilization ratios. They are really low in board now with all the new capacity. But here, we have been more -- we talked about it for so long. Capacity has been partly closed and converted, but still also here, it's quite a lot of overcapacity. We have been doing well in this market for a long time. Also now we are doing, I would say, really well. We are not running full. The idea is not to run totally full either, but maybe 80%, 85% suits us better given the situation with very volatile electricity prices we think we use to our favor as well. Prices also here, roughly the same, fairly stable. But when you look for marginal volumes, there is a lot of competition for the volumes and some price pressure in the market. Stefan?

Yes. The result for the third quarter were on par with what we reported in the second quarter. In Q3, we had the annual maintenance shut in the Iggesund mill that took a toll on the result by some SEK 150 million. Despite a small increase in energy cost, our energy cost in the division is still very much lower than normal this quarter, and that is due to our ability to adjust to the volatility in the electricity market, as Henrik mentioned. We also had some tailwind from seasonally lower personnel costs in Q3.

And given the circumstances, a really good result, I must say. All right. Just remember what kind of a company we are. We are a forest-owning company or land-owning company, and we do everything we can in order to extract as much value as possible from the land we own in different ways. Thank you. And by that, we are happy to take on any questions you have.

[Operator Instructions] The first question comes from the line of Charlie Muir-Sands with BNP.

I had a few short ones. Firstly, on the timing of the pulpwood costs coming down, can you just clarify, was that a -- that was clearly a headwind to profitability of the Forest segment. Was that already simultaneously a tailwind to profitability in the consumption segments like board and paper? Or does that come through with a lag? And can you give any sort of quantification for what you're seeing kind of right now on a kind of year-on-year basis, for example? And then secondly, you mentioned on board and paper, lower energy costs. Can you just clarify, were you talking both year-on-year and quarter-on-quarter? And then just finally, on the tax ruling, can you clarify, would that create a cash inflow? Or does that just release a provision for you?

I think it's all questions for you [indiscernible]. But maybe the first one, yes, there is a lag when pulpwood prices come down. It takes like 6 months before it reaches the industry.

Yes. And if we take the other one when it comes to our lower electricity cost, it's approximately in Q3, SEK 250 million lower than normal. In Q2, we had even lower electricity cost than we had in Q3, but still much lower than normal in Q3. Regarding the tax item, we anticipate that, that will turn into cash flow during the fourth quarter.

Okay. Great. Sorry, just going back to the first one. So you said a lag when prices come down on pulpwood but you already face that headwind in the forest segment? Or there's a lag -- further lag and those further headwinds come in the forest segment and further tailwind in the industrial segment?

The prices are moving quite slowly in the forest segment as it does for the industry, as Henrik mentioned. So we have not seen that kind of headwind yet in the forest. How it will turn out, we'll see going forward.

Okay. And yes, is there any quantification you can put around the scale of the movements you've seen so far?

Maintenance?

No, I think it's too early -- the wood cost. I think it's too early to comment on and quantify the effects going forward. We've just seen that the pulpwood prices are starting to come down, and we need to come back on the quantification in the next quarter, I think.

But there is quite a big difference how you -- how the market feels when it comes to pulpwood and sawlogs where it's still quite a lot of competition, as you saw on the slide for sawlogs in Sweden. But pulpwood definitely on its way down.

Mr. Linus Larsson with SEB, can you hear us?

I can hear you now. Could you please dissect the Wood Products result in the third quarter that you already mentioned the SEK 30 million of impairment? And also what to expect in the fourth quarter in terms of product price and sawlog cost delta and other moving parts, please?

Can you take...

The first one with the write-down of the stock, maybe didn't catch you right there, Linus. But we did a write-down of SEK 30 million in the third quarter, and that is due to the lower prices that we've seen in the market. Then we needed to adjust the stock value. So it's as simple as that.

And when it comes to the pulpwood prices and the sawlog price, as I said before, pulpwood prices, well, they are on the way down. But remember, it takes some time before we get a lower cost in our industry. And we buy roughly half of what we make use of comes from our own forest. But also remember, we have a lot more forest up in the north where prices are, especially for sawlogs, they are lower than in the south of Sweden. But also when it comes to sawlogs, still a lot of competition. And so far, prices have not come down, at least not as we see it.

Okay. So I mean, in terms of direction for the fourth quarter compared to the third quarter, are you still expecting higher sawlog costs and lower finished product prices? Or what's the direction, if you don't want to quantify what's the direction of the both?

Sawlog prices are more or less flat from where we are now.

And selling price is hard to comment, but the market is quite soft. So we need to see where things are going when we sum up the fourth quarter, Linus.

Wood Products in general, still, Linus, it's -- I'd say it's price pressure in the market.

Right, right. Okay. And maybe a similar question for Board and Paper, what you're seeing in terms of delta Q4 and Q3 in terms of price and cost, at least directionally?

It's -- we don't comment that often going forward, Linus. What we had in Q3 that is exceptional is, of course, the maintenance shut in the Iggesund mill and as always, lower personnel cost during Q3 that will increase then quarter-over-quarter when we look into Q4. But comment on pricing and other cost factors we did.

It's always more difficult to fill up the order books at the end of the year when the new contracts are being negotiated at the same time. Normally, demand is a bit lower, but that you know from before.

And any initial thoughts on price negotiations going into next year?

No. We don't comment on that, Linus. But as I said before, both when it comes to Board and Paper, our prices are fairly stable. But when you look for new volumes that you don't have a contract with right now, then also now we feel a bit of price pressure. It's not easy to get marginal volumes. Regarding discussions for next year, it's too early. We'll see what happens.

And maybe just one final on the market dynamics and pricing and like we've now been discussing geopolitics and tariffs for the past couple of quarters. What's the latest on that in your market segments? And how are you seeing that? And how are you feeling that?

If you take the tariff question, I think you already know. But for wood products now, there is a 10% tariff on wood products going into the U.S. And for Board and Paper, it's 15%. We don't have that much volumes going to the U.S. And of course, it's also an ongoing discussion who should take the cost, the one selling into the market or the one importing to the market. And right now, in board, it's roughly 50-50 and paper roughly the same. It's something that's ongoing.

Got it. And also like dynamically in terms of trade flows, et cetera, are you seeing that whole discussion impacting supply-demand balances in your various segments?

If you look at indirect effects, for example, Chinese board coming into Europe, we cannot see it yet. Might happen, but so far, we don't see any drastic or big volumes coming into Europe.

The next question comes from the line of Ioannis Masvoulas with Morgan Stanley.

Three questions left from my side. The first, when it comes to the graphic paper segment, we've seen several curtailments across the industry in Europe year-to-date, but mostly on the mechanical grades, less so on chemical grades. Can you talk about the dynamic? What do you think is driving that? Is it more of a different demand dynamics between the 2? And also, can you talk about how you see that materializing, whether we're going to see more capacity cuts in the coming months or majority of what you expect in the short term is already announced? And then secondly, again, on Wood Products, which was, I guess, the main weakness on the results today, you've only trimmed deliveries by 2% quarter-over-quarter. Is that a function of potentially destocking and production is actually lower? And how should we think about deliveries going into Q4 and early '26? And lastly, you mentioned curtailments on the wind side, given the challenging margin dynamics. Can you give an indication on maybe the yield that your wind mills are running at or maybe a mix between wind and hydro generation and how that's evolved over the past 12 months?

So let me start with paper and graphic papers. We are in the mechanical segment, but we also compete with wood-free paper with some of our products. So we see everything from newsprint to wood-free uncoated more or less as one market when we look into the business we do. It's overcapacity. Demand is dropping. You are absolutely right. There are some capacity taken out. Whether there will be more taken out in the future, we don't know. We only look at what has been officially stopped, taken out or at least announced. And to have a good balance, we need to do, but the market need to take out a lot more capacity, a couple of more million tonnes, to be honest. But on the other hand, it's also -- as we have -- we are quite flexible and we have learned to also operate in an environment where you can't run absolutely full. Nobody can run absolutely full. You have to be a bit more flexible today. So I think the rules of the game have changed a bit as well. But we need to take out more to have a good balance. That's clear. And we are fairly happy with our operating rates, slightly higher than average in the market at least. Stefan, next one...

Trying to remember them. I think it was about the delivery volumes from the Wood Products segment in Q3. Yes, there is a destocking, but that is mainly due to seasonality, lower production in Q3 during vacation periods. If we look at production volumes so far this year compared to last year, we are down some 10%, which partly is explained by the rebuild in the Iggesund sawmill that we did in the first quarter. But also, as Henrik mentioned, we've taken down production in the southern part of Sweden due to the high log cost that we see there. Then I think it was curtailment on wind towers. We have used our wind power turbines to approximately 50% during the third quarter, and that is due to both low prices in combination with high risk for imbalancing cost when you run the wind farms. Hydropower stations, we run as normal, try to maximize the profit we can get from them producing when the prices are as high as they can be for the moment and reduce production when prices are low.

Which wasn't very high. Which wasn't very high. No.

No, I think it was -- hopefully, Ioannis. Did we catch it all?

Yes. That was very clear. Maybe a quick follow-up on the graphic paper side. So you mentioned the SEK 250 million, again, gain from better electricity management and therefore, lower power costs. If we were to add it to assume that you didn't have that gain, can you talk about profitability in the graphic paper segment for Q3, like leaving boards aside, just looking at graphic, would it be EBIT positive? And would it be EBITDA positive? Just to get a sense on the underlying profit trends.

Yes, it's -- the underlying business is EBIT profit, even if you extract the effect from the electricity.

Maybe we would have been running it slightly different, but yes. For sure, profit.

The next question comes from the line of Lars Kjellberg with Stifel.

Most of them have been answered, but I just have a couple of follow-ups. On China specifically, of course, we have a significant excess supply, and I appreciate your comments about not reaching European shores. But we did see, for example, Brazil now asking for tariff protection from China. So I guess, directly for the European perspective, how are you seeing the Asian markets in general as an export destination? You do have some volumes going into that market. And I can only assume it's not great. So are you seeing sort of repatriation of tonnes back to Europe and equally so, given the tariff situation and weak demand in the U.S., is that an issue with, again, repatriation of tonnes that normally would have been exported from Europe? Is that a topic that you're seeing in your business and in general for the industry? The last point is really on sawlog pricing. You've commented many quarters now, of course, that they're insanely high relative to the underlying demand trends and pricing for wood products and the pressure is pretty acute as we can tell from your numbers. So what does it take for this market to give on the log price side?

So we start with geopolitics and how it affects our business. You almost answered the questions, I think. Yes, it's much more difficult to sell into Asia, especially for marginal business to find add-on business, so to say, because it's a lot of competition. If you compare to a number of years ago, we have had capacity in China for a long time, but they are both good, and it's more now than before. And the market is not picking up, as we have said. So that's more difficult. When it comes to how much of the volumes that will come into Europe, according to statistics I see and when I speak to our people, I don't see a big change, at least not yet. But you're right, there is a risk, of course, that it could be shifts in volumes between different parts of the world. And then with U.S., you are right again, yes, we are a bit dependent as Europeans on exporting not only to Asia, but also to the U.S. to have a decent supply-demand balance. Roughly 20% when it comes to board should be sold somewhere else than in Europe. That's kind of the European business idea. Second?

And on the specifics around European volumes returning, you can't sell it abroad. Does that put incremental pressure on Europe? I can only assume that the pricing still is better in Europe than it would be overseas.

So far, not much has happened, but there is a risk that, that could be the case, absolutely. But we haven't really seen it yet, to be honest. I think the big issue here is whether we can export as much as we need to export to different parts of the world because the total capacity in Europe is simply too big for Europe. It needs to be shipped both to the U.S. and to Asia in different ways. We ship more to Asia than -- let's say, we do the business in the U.S., for example, but we've shipped the volumes to Asia to be converted, et cetera. So it's different kind of business also in Asia. Not all of them are up to competition with the Chinese producers.

Second question about the sawlogs and the dynamics, I think it was what needs to be -- to happen to the sawlog prices to come down. Well, we have done what we can do so far. We have taken down production in the southern part of Sweden, where the log costs are simply too high for us to get the financials in line with our expectations. How other people will treat their sawmills, we will see going forward. Not much we can do about it in the short term.

Normally, the sawmills when they -- you need to come down quite a lot in profitability also to variable cost more or less before they stop. That's what has happened in the history. And then the wood market changes, sawlogs become cheaper. But obviously, right now, they are simply too expensive and prices for wood products is under pressure. So very tough situation. Different though in northern parts of Sweden, where sawlogs are cheaper.

There's no downward pressure on logs today at all.

Of course, all of us try to get it down. But so far, we haven't seen it happening, to be honest. That's what we had to. That's where we are right now. And in our case, to take down production if it's too expensive, that's the first thing you do.

The next question comes from the line of Christian Kopfer with Handelsbanken.

Just 2 questions from my side. Firstly, you talked a little bit about the power prices, the big differences in the North versus the South and maybe it has been even more substantial differences in the last couple of quarters. From your perspective, I mean, you are active in both areas, especially in the North and maybe [ Area 3 ], right? So the big differences, are those only driven by the bottlenecking in transmission? Or what do you see?

That's the main cause. But also, we have seen quite a lot of water in the system up in the north that have put pressure to produce hydropower during the first 9 months of this year. Now the situation is a bit more normal when we look at the levels in our reservoirs at least.

Yes. But if you look at third quarter, I think you answered the question more or less because if there would have been sufficient transmission capacity, situation would have been different as well with lower prices in SE3 and higher in SE2 and 1. That's clear.

Has it been bigger differences with the new flow base, you think?

It's quite a short period of time, and it's a combination of factors when it comes to cables being out of operation, lots of water in the system. So it's quite early to say that it's the flow base that has created this situation. Also, when you have revision of nuclear, you have to take down the transmission capacity a bit, which has had an influence, that's clear. But exactly, there are so many different factors now to understand how things are going to be. So let's wait and see a bit.

And then we heard from another paper producer or packaging business this morning mentioned that they start to see some, call it, light in the end of the tunnel when it comes to customer behavior, not exactly for Q4, but maybe a little bit better on the demand side going into next year. Is that something that you start to see on your customer base as well?

You mean consumption in general for forest industry products?

Yes, demand from your customers -- starting to be a little bit better or how do you see it?

It could be. But if you look at the statistics so far, what has happened and also if I look into our order books, I can't really say that things have changed. I'd say that we have more overcapacity, especially in board than what we have been used to for many years. So demand really needs to pick up quite a lot before we get a healthy demand -- supply-demand balance again. I think it will take some time.

The next question comes from the line of Cole Hathorn with Jefferies.

Just a follow-up on the pricing commentary being stable. I mean we're seeing a lot of the folding boxboard price indices and graphic paper price indices decline. So I'm just wondering how Holmen sits within that. Could you talk a little bit around on the paper side, the book paper business, which I imagine is kind of longer contracts and slightly different to the index pricing? And then on your folding carton business, could you just remind us how much is more premium longer-term contract versus traditional folding carton of your business? And when you look into 2026, you talked about spot pressures, but should we be assuming that some of the annual contracts, there will be a little bit of pressure on those into 2026?

Would you like to start?

I leave that to you, Henrik.

First of all, when it comes to negotiations for next year, we don't want to comment that. We are starting to negotiate soon. But -- and when it comes to prices in Europe in board, as I said, especially you mentioned folding boxboard, and we are a lot -- we have bigger volumes in solid bleach board where you are even more into a niche where prices tend to be very stable over time. They do change, but it takes time. And that's the case also right now for us that most of our business, they are stable when it comes to board, slightly more pressure in general in folding boxboard than a solid bleached board. The challenge is more when you need marginal volumes to take on new business, then there is price pressure. What that means for next year, it's too early to say. And then it was how many of our contracts are longer term for 2, 3 years, et cetera?

It's a mixture. Some shorter ones, some 1- to 2-year tenders.

We have some slightly longer contracts, but not that many. And when it comes to paper, we don't have any long-term contracts, maximum 1 year. It's gone the other way, some contracts quarterly or half year as well. Book paper is a good segment where we've been extremely -- we have done well, and we are doing well. Prices have been a bit more stable than graphic paper in general. But also there, a lot of contracts will be renegotiated from 1st of January and second quarter, et cetera. It's no big difference in that sense, but a more stable segment, both when it comes to demand development and also pricing and fewer producers, of course.

And then maybe just a follow-up on the Canadian producers in wood products. They're under a lot of pressure considering the duties that have impacted them, and you've showed some good charts on wood staff, particularly around British Columbia sawmills coming down. Are you starting to see better ability to compete with the Canadians in the U.S.? Or any commentary you can provide on the Canadian sawmill side and how that's impacting your business?

Normally in the U.S., they consume like 100 million cubic meters. 20 of those come from Canada and roughly 5 from Europe. And now when the Canadians have 35%, 40%, 45%, well, they have a different wood cost as a base. So it's not really comparable to tariffs we have with 10% in Europe. But normally, when you have increased tariffs and you have that much of import into U.S., you would see prices going up in the U.S. But so far, we haven't seen much of that. And if you look at the future prices, well, they go up and down quite a lot week-to-week almost. Right now, if I would say something, I would say, well, they are up 5% something, but that's last week, et cetera. So, so far, demand and the balance in the U.S. has not made prices come up to cover for the tariff cost, not for the Canadians, not for the Europeans, not to be fully compensated. No, it hasn't happened yet.

Fair enough. So in absence of housing demand, is it really kind of sawmill closures in Canada, which might be the supply trigger?

Supply is down, but not enough. Demand is even lower as it looks right now.

The next question comes from the line of Pallav Mittal with Barclays.

Most of my questions have been answered. A couple of follow-ups. So firstly, can you comment on the number of transactions in the Swedish forest and how our transaction pricing looking this year because last couple of years, it has been flat to down. So any comment on that would be helpful. And then secondly, can you just talk about the profit split for the Board and Paper business? Is it still broadly 50-50?

Well, if we start with the forest transaction market, most of the transactions are being done during the second half of the year. There's also a lag in the system when they are to be registered, et cetera. So it's quite limited of transactions so far this year as we can see. So it's hard to draw the conclusions for the full year already now. But what we have seen so far is no major changes in the property prices in Sweden. The next question is the split of profitability between Board and Paper. Well, board is heavily affected by the maintenance shuts that we have had both in Q2 and Q3. So it's hard to comment on the exact numbers in Q3.

But both profitable.

Both profitable, of course, yes.

[Operator Instructions] Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to management for any closing remarks.

Thank you very much for good questions, good discussion. Look forward to see you soon again. Thank you.

Good morning, everybody, and welcome to the interim report presentation for the Holmen Group. It's me, Henrik, and it's Stefan, and we will take you through the presentation. And once we finalized, we are happy to take any questions you might have. So Stefan, let's start.

Yes. Second quarter, we were able to deliver a bit over SEK 800 million, which I think is a decent result given the situation, especially when it comes to consumer products, which we will come into a bit later. We also -- if you look at only our industry, which is board and paper and our wood products, the industry where we always measure return on capital employed, we were able to deliver 15% in the second quarter; and if you look at the last 12 months, we have an average of 17%; over the last 10 years, even a little bit more. Our financial position is strong. We have also distributed SEK 2.8 billion to our shareholders during the first half of the year through dividend and buybacks.

Let's change subject totally and go into the forest or more the wood market in Sweden. We have talked about increasing log cost, both sawlogs and pulpwood for many quarters. But I think now it's time to say that things are changing. But in the second quarter, especially sawlog prices continued to go up. And remember, when we buy, or what we buy today and last week, we will consume that in roughly half a year or even a little bit more. As I said, sawlog prices continue to go up, especially in South of Sweden, and also the difference now between South of Sweden and northern parts of Sweden when it comes to sawlogs, we had never had such a big price difference.

Pulpwood, leveling off in the second quarter. And as we speak right now, there is some price pressure on pulpwood. That's quite clear, but we haven't seen it yet. And the same there. What we buy today, we will make use of it in our industry in roughly half year. Stefan?

Yes. The result for the Forest division was SEK 519 million during the second quarter. That is an increase by some SEK 30 million compared to the first quarter this year due to higher harvesting on our own forest. Despite this higher harvesting in Q2, we have still harvested less during the first 6 months of this year compared to last year and also compared to our long-term harvesting plan. That is all though due to timing issues. So that means that we will increase our harvest in the second half of this year compared to the first.

Thank you. Let's continue with Renewable Energy and a very strange situation in the second quarter. If we look at the energy market in Europe as such, we say that we have a seasonal effect. And what do we mean by that? Well, when there is a lot of sun in the system, especially in Germany, the price comes down, that we see this year. And we also see that it has an effect on south of Sweden. In our case, we use SE3 as the reference. That has, had quite a big effect, but it hasn't had any effect at all on the northern prices.

They are simply historically low. We have to go back to 2020, one quarter, we had prices as low as -- in the second quarter, now the price was EUR 10 per megawatt. And obviously, a lot of electricity was simply locked in, in the northern parts of Sweden during the second quarter. A lot of water in the system, as we said, more than what we usually have, but there are also other effects with cables, flow-based, et cetera. Anyway, when we make use of our hydropower, we do get a premium, but Stefan, when the premium is on EUR 10, it doesn't help very much.

It does not, Henrik. And the Energy division is loss-making during the second quarter due to the very low prices that Henrik just explained. Can also add that when we compare the result with the first quarter this year, we had seasonally lower production in Q2 in line with normal seasonal pattern.

Let's continue with Wood Products. Let's start with the demand side. In general, right now, there is a weak market. The big 3 markets we have, United States, China and Europe, we see that demand is a bit slow. And I guess consumer confidence is not really there. If we take United States, just as a reminder, roughly 100 million cubic meters are consumed in the U.S. and 20 of them come from Canada and roughly 5 from Europe, as we also have some uncertainty about tariffs going forward.

In China, well, we see there that the import of Wood Products is coming down quite a lot. And of course, the market as such, as I said, is weak. But also the supply side of the market has changed. Restrictions in terms of it's a scarcity of logs in the world in general. But if you look at Canada, especially British Columbia, production has come down a lot. And it's bark beetle infestation, it's forest fires and also political decisions that make the production in Western Canada to go down.

We take Germany as an example as well. During the years when we had a lot of bark beetle infestation and the Germans had to take out a lot of logs from the forest, production went up, but we can see now that those days are a bit over, and also quite expensive wood together with other restrictions also here, bark beetles, et cetera, makes production come down.

So demand is not very healthy, but supply is restricted as well, which meant that prices actually went up some 10% in the second quarter. But where we are right now, we feel that there is price pressure on the wood products in general and prices will come down during the third quarter. The question is how much. Stefan, prices up in the second quarter, did it help?

Did not, unfortunately. We have an operating profit of SEK 20 million in the second quarter. And as Henrik said, we had price increases of 10%, but that was completely offset by higher wood cost during the quarter.

And again, just to remind ourselves, a big difference between the log cost in South of Sweden and northern parts of Sweden, bigger than ever. Let's change and switch to Board and Paper. Starting with Board. Also here, our customers, you can see that demand is -- well, it's a little bit better than '23, but it's not back to where we were before the pandemic or not even close actually. Also here, consumers are a bit waiting and the confidence is obviously not really there.

In this market, we also have some new capacity and also here some uncertainty when it comes to tariffs, who will deliver to the U.S., et cetera. Right now, what we deliver in terms of Board, well, we have the 15% tariff we have to take care of when we deliver into the U.S. Also some, not direct, but indirect effects, not big, but they are there. Prices are stable during the second quarter. In our case, our order book, I would say, is rather healthy. We are not running absolutely full. We do take some market-related downtime. Also depending on a bit that actually our production is going a bit better, so we can produce a bit more. But we can't sell everything, but most of it. So the position is quite good.

When it comes to Paper, you know about the situation in the industry, very low utilization ratios. I'd say nobody is running totally full. Also here, we have to expect demand to come down a little bit over the years, but you can see moving 12 versus last year, it's no drastic change so far this year. Prices are also more or less stable. Some price pressure sometimes, but no big things. In our case, we run with higher utilization rate than the industry average. The industry average today is, it starts with a 7% or low 8%, 75%, 80%. We run roughly at 80%, 85%. And to be honest, running at 80%, 85%, that suits us rather well, because it also gives us a possibility to act on a volatile electricity price. And Stefan, that has some impact also on our result.

It has. First, I need to comment on the maintenance shut that we had in the Workington mill in Q2, which affected the result in Q2 by some SEK 150 million. We also had slightly lower delivery and production in Q2 compared to Q1. The positive side, as Henrik mentioned, is that we've been able to run our paper mills in a really efficient way in a volatile electricity market, and that meant that we have lowered our energy cost by approximately SEK 250 million to SEK 300 million during the second quarter compared to a normal level.

Thank you. That's about that. It took us 10 minutes. It's not so bad. We are happy to take any questions you might have, please.

[Operator Instructions] Our first question comes from Linus Larsson, SEB.

Maybe following up on what you just said about Board and Paper and the second quarter benefit that you saw from your optimization in terms of energy efficiency. I think you said SEK 250 million to SEK 300 million. What are you seeing in the third and fourth quarter in terms of such opportunities?

It's hard to predict, Linus. What we see in the market today is that nothing has changed compared to the first and the second quarter. But how well we will be able to execute on this in the same way as in the second quarter is hard to predict. But the market behaves pretty much in the same way as it has done in the last 6 months. So I think it's the best answer I can give you.

And would you say that, I mean, during the colder part of the year, you actually have better opportunities and higher volatility compared to what a second quarter typically looks like?

No, I wouldn't say that. And the volatility that we speak about is the intraday volatility. The price is set every hour or every quarter of an hour intraday, and that is the volatility that we can make use of. So it's not the big swings between weeks or months or so. It's rather short-term volatility.

Within the same day.

Within the same day.

Sure. And then maybe jumping to Forest and looking just at your harvesting both in the first and the second quarter, actually, it's down year-on-year, which has been a drag on earnings, all else being equal. What are you seeing for the remainder of the year and for the full year in terms of harvesting levels?

Well, as I said, we have had lower harvesting than normal during the first part of the year. We believe that we will increase harvest during the second part of the year, so that we will have approximately the same harvesting level as we've seen the last couple of years.

Great. I missed that. Thanks for repeating that. I didn't hear that probably the first time you said it. And then maybe just to finish off on Wood Products. Going into the third quarter, you already said that you're expecting lower prices. Maybe if you could elaborate a bit on that. Are you seeing a full reverse of the price increases that you saw in the second quarter? And also, are you expecting further cost increases sequentially in the third quarter from higher sawlog costs? And if so, to what degree?

If you take the sawlog cost, first of all, yes, what we buy today is a bit higher than our average what we have that we will consume during the next half year. And that's for the sawmills down south in the southern parts of Sweden. We have also decided to take down production capacity at both Braviken and most probably also the Linghem Sawmill. I think we said at the last report.

And when it comes to prices, we can just say that normally, during the springtime, there is a tick up in price, and that happened this year as well. But the market is not really there to support the prices we have. So right now, there is pressure. How far it will go, I can't really say. And if you look at the future prices in the U.S., they are up 1 week and down the next week. Right now, it's a bit up, but very difficult to predict. And also together with the tariffs, it makes it even more difficult to predict. That wasn't much of help I hear myself saying, but...

Our next question comes from Lars Kjellberg, Stifel.

I just wanted to continue a bit on first with wood cost. You said, Henrik, that there were some pressures coming through in the pulpwood market, but have yet to see it. So when should we expect to see market prices falling? And what sort of pressure are we talking about?

I'm also interested to hear your thoughts on sort of the competitive environment in the global market, the Consumer Board, appreciating you have very niche, high-quality grade, but it feels as if commodity paperboard in general is under some pressure. And then of course, some of your peers have highlighted Asia as a real hotspot. So if you can talk us through a bit what you're seeing in your Asian exports and that competitive pressure and especially with the European excess supply that we're seeing. And now with tariffs coming in, if repatriation of overseas tons is already starting to become an issue?

The last question, we haven't seen that yet. And maybe also in our segment, we are, if not protected at least, it's a bit different. We don't have a lot of deliveries to Asia that we do with Asian customers. But I do agree to that it's very difficult to take spot orders in Asia today, even with the quality we have. The big volumes we have going to Asia, that's normally done with European or North American customers.

You are right, there is some overcapacity in the market. It's been overcapacity in Asia for quite a long time. Recent investments also in Europe, for example, Stora Enso and, not too long ago also, Metsä Board. We will see what happens. But of course, there is some uncertainty now regarding how much can be sold into the U.S. and what tariffs will it be. So I feel quite -- I think our position is really good when it comes to doing it in a good way in such a difficult market given the segment we are in and the customers we have, but to grow and take new customers, spot orders, et cetera, difficult and also not very good prices. Did I miss any of your questions?

Another was the pulpwood prices.

Well, for sure, something I didn't mention before when we talked about pulpwood is that Russia, of course, had an influence on pulpwood and supply of pulpwood into our region before, and that's now not there. Same when it comes to sawlogs, of course, in total, Russian sawmills is not contributing to the supply.

But going back to pulpwood, what we see is that customers that we have buying pulpwood from us are still keen on having the pulpwood, but we also see that the industry is not running full. And to be honest, there is enough pulpwood in the market in Sweden today. And we see price pressure. How far it will go and how long it will take? Difficult to say. But same for us as for most of the customers -- or our competitors as well, it takes a while. What we buy today, remember, again, we consume it in roughly half a year's time.

Yes. Understood. And final question for me is, your portfolio, when it comes to the paper side, seems to be performing better. It tends to do that. But also seeing some emerging pricing pressure on publication paper in general. Are you seeing the same in your more niche grades?

It's again the same that the business we have ongoing and the customers we have, especially in some niches, well, it's more stable, but we are also affected by what's happening in general in the market. And again, to take spot orders also in publication papers is very difficult today. So when we say that we're around 80%, 85%, well, we would have liked to be at 90%, but that's difficult to go from, let's say, 85% to 90%. And again, it suits us also when it comes to taking advantage of a volatile electricity market.

Our next question comes from Cole Hathorn, Jefferies.

I'd just like to follow up on the Wood Products market. I'd like to understand how you see the ability to manage your cost employees when the market is a bit softer and when the sawlogs between Southern Sweden and Northern Sweden are elevated. So just how you're managing the costs in a challenging environment? And then I'd also like your views on how the higher duties on Canada are potentially impacting the U.S. market and how you play in that space? How do you see the outlook there into the U.S. for single-family homes and how the Canadian import tariffs might impact the U.S. market?

Okay. Starting with what we can do in order to take down cost. I said before that we have already taken down production capacity at our Braviken, the big sawmill in South of Sweden. And to be honest, it's not very difficult. It's possible. It takes 2, 3 months and then you have taken out most of the cost you have. It's salary cost mainly. That's doable. And what we do in order to understand which strategy to go for is that we have always to make a forecast for what wood products price will we have in 6 to 8 months' time from now when we buy the sawlogs in the forest. That's what we need to understand. And as I said before, we see some price pressure, and that's why we also see that sawlogs are extremely expensive in South of Sweden. So we do take down production a bit and wait and see.

When it comes to the U.S., well, nobody knows exactly what will happen to the tariffs. We have 5% roughly of our production going into the U.S. right now, and we take measures in order to be able to stop if it's not possible to continue to deliver. But as I said before, you are absolutely right, Canada is extremely important, to understand what's going to happen between Canadian wood products going into the U.S. Will it be more Canadian export? Or will it be Europe having the upper hand? Well, that comes down to the tariffs finally and that we don't know yet. And we have to sort out also these 232 tariffs, especially for Canada before we know the situation, I think. You can also see it in the future prices.

And then maybe just as a follow-up on Russia, Ukraine. Obviously, the U.S. President's meeting today. I'm just wondering if you've got any thoughts there if there was a peace deal, how might a resolution impact any of your markets? Just some speculative thoughts if you care to give any.

I think if there will be peace, given both sawlog prices and pulpwood prices we see in Sweden today or Sweden, Finland, Norway, in our region, for sure, there will be wood coming into our system somehow and put pressure on prices. But we haven't seen peace yet.

Our next question comes from James Perry, Citi.

I'd just like to ask about paperboard again. You said demand is still below pre-pandemic levels. What are you actually hearing from customers on the ground? Do you have a sense as to whether there is any inventory build or even destocking or changing order patterns at the moment? Or should we really see these figures as reflecting underlying demand today?

2023, huge destocking. That was not the real consumption that we see in the statistics for 2023. Now I don't think there is any of that. But when you talk to customers, they're always optimistic, of course. But reality is that we are not back yet and the consumer confidence in general is not really that great. I think we need the overall economic cycle to improve a bit to make things look better. And we are not -- we are happy with what we have. We are doing well in this market, but it's a challenging market. And there is a lot of uncertainty, obviously, because quite a lot of -- quite big volumes were thought about being able to sell -- being sold into the U.S., and we don't know now. It's not mainly us, but our competitors.

Our next question comes from Oskar Lindstrom, Danske Bank.

Two sets of questions from me. The first one is on the Board segment. Have any of the recent tariff deals or changes impacted your markets? Or do you expect them to impact your markets? That's my first question.

Not yet. To be honest. But it's too early to say.

And do you have any expectations here?

I think it's too early to say what the final outcome will be. We have the 15% now, that we know, when we sell into the U.S. And there is ongoing discussions who should pay the 15%. But it's not finalized.

I realize what your position is. My second question is on forest land book valuation. First off is, have you seen any -- how has the forest land transaction market developed in the first half of the year as far as you can see it? I realize it's lower activity during the first half of the year compared to the second, but still the summer should be a fairly active season. What's your impression?

Yes. As you say, Oskar, it's very hard to draw any conclusions on the first half year's statistics. The samples are just too small to draw any conclusions. We don't see any major shift so far in the price level compared to last year. But it's quite early to say. And as you say, not that many transactions being done in the first half year.

And then I've been thinking around sort of methodology for setting the book value of the forest lands. And as far as I could read the accounting recommendations, I mean, the proxy or the first proxy should be sort of if there's any listed forest land that you can compare -- that compares to your forest land. Now there isn't in Sweden. So that's the reason why you look at comparable transactions. If we were to have a listed forest land, pure forest land company in Sweden, would the valuation of that company be the proxy that you would use for your book valuation?

I think you need to consider the differences in the characteristics of different forest properties. We don't value the 1.1 million hectare of productive forest land that we have. We rather value each and every of the 4,000 properties that we have. And doing that by a proxy from a listed company, I think, would be quite tricky. So that's why we use the methodology that we have today and we will probably use going forward as well due to the different characteristics of the forest.

Our next question comes from Ioannis Masvoulas, Morgan Stanley.

Just a few questions left from my side. The first one, going back to the topic of pulpwood cost. Given that you have, as you mentioned, 6 months visibility on what fits into your industries, could you provide us an indication on what sort of pulpwood cost development you expect for Q3 and Q4?

Then second question, also, could you quantify the reduction in Wood Products output you expect for the balance of the year given the measures you are taking at this point? And then third question on the buyback where you bought back 1.8 million shares out of the 3 million shares you have decided to repurchase through to the next AGM. My understanding is that the authorization could be up to 10% of the shares. So is there a potential for the Board to scale up the current buyback? And if so, would that be taken as an ad hoc decision?

We start with the last question on share buybacks. We have a mandate from the Board to buy back 3 million shares. We have so far executed on 1.8 million of those. How we will behave going forward, we will see how things develop during the third quarter, and we need to come back to that one when we present the Q3 report, I would say. Theoretically, the Board can make another decision to increase share buybacks. That's totally correct.

Then I think you had a first question about Wood Product volumes in Q3, Q4. The measures that we are taking now in the southern part of Sweden will approximately take down production volumes by some 50,000 to 75,000 cubic meters on an annual basis from beginning of September or during the autumn. So it will gradually be taken down during the autumn.

And then was the price of pulpwood, what we foresee going forward?

Yes. We don't give any estimate on that one. As Henrik mentioned, what we consume during the next half year is based on what we actually acquired the first half year. More or less.

But there are no drastic changes in the pulpwood prices right now, but there is some pressure.

Okay. And just one follow-up, if I may, on the operating profit split between Board and Paper. Could you give us a rough indication for Q2 and the first half of the year?

Well, it's not fair since we had the maintenance shut in Workington during the second quarter. So most of the profit from Board and Paper within the second quarter was from the Paper division due to this maintenance shut.

Which we have every second year at Workington.

Exactly. I can also take the opportunity to remind you that we will have a maintenance shut in the Iggesund Mill in the third quarter this year. That's an annual shut.

Yes.

Our next question comes from Robin Santavirta, DNB Carnegie.

DNB Carnegie. So regarding the Board and Paper segment, could you explain this SEK 250 million to SEK 300 million decline in energy costs in the quarter? It seems like a very big number, especially as I understand, you have hedged a large part of the energy consumption in that segment? Is it more than 80%? So how do you utilize, in practice, this intraday volatility to get such gains? I thought you have previously said that you're not offering secured power in the daily balancing market, which to me would explain this kind of setup. But I think we have spoken about that before. So a bit more detail on that.

Well, what we do is that we take opportunity of the intraday volatility in the electricity market and not on the spot market, which is a daily traded market. So it's the short-term volatility in the market that makes it possible for us to create this kind of results, and also the whole setup of the electricity market as such. It suits us quite well with the production capacity that we have and the machines that we have. So we're very flexible on how to run the production.

The intradays obviously are exceptionally large and how a lot of industrial companies operate is that if they have secured power and the pricing today is exceptionally high and they can run down their production, then they basically sell those contracts in the intraday market at like prices up to EUR 5,000 per megawatt hour. Is that not what you do?

Partly, so to say. It's a really complex area to explain, but it is the volatility within the day that makes us able to shut down production when needed and increase when needed, depending on the actual electricity price for the moment.

Maybe a separate call later on.

Maybe.

It could be good because that number is just quite big and it's quite difficult, obviously, for us to try to estimate the future as well.

The second question I have is regarding pulpwood pricing. And I was just wondering with this potential peace, who knows whether it will come or not. I'm a Fin, we do not trust Russians, so who knows. But I was just wondering, do you believe that there is a bit of a speculative component in the current pulpwood pricing in Scandinavia, meaning that if I look around, I can see a lot of industrial production being like not running at the moment, I guess, capacity utilization, if you take Finland and Sweden together in paper, paperboard, pulp, maybe even sawmilling is clearly lower than pre-war.

I guess we have harvesting now also increasing. But still, I can see in H2, I understand it's now maybe turning, but in -- sorry, H1, pulpwood pricing has simply continued to increase. So I was wondering because it will take a long time before Russian wood raw material come into the Baltics or then even Finland and Sweden at later stage. But could there be a setup where simply peace would be sort of as an information value for the pulpwood market a negative and only that information could trigger lower prices. Could that happen in your view?

I agree with most of what you say, Robin, about the market and the situation. I think many consumers of pulpwood, they are still a bit scared for not having enough wood from the days when it was really fierce competition for the pulpwood. Maybe that makes it go a bit slower than what it should. But it's enough pulpwood available right now. You are absolutely right. But if it's speculation or not, I don't know more than you do, I think.

Our next question comes from Martin Melbye, ABG Sundal Collier.

Could you expand upon why the harvesting from the own forest is running 15% below last year, because prices are very good to harvest your own forest, I guess?

Well, it's mostly operational reasons where we have the harvesting resources located in areas in the beginning of the year at plots where we didn't have much own forest rather harvesting rights. So it's more of an operational efficiency issue rather than anything else. And that's also why we will increase harvest in the second half of 2025.

On our own land.

On our own land, exactly.

Okay. So there's nothing wrong with the forest plan as such. It does not need to be adjusted to the real world?

No, just operational.

But your observation is correct.

Sounds good. And last question for me. I see that RE is starting to quote folding boxboard prices down. Is that realistic for you in the second half? Or is it more flat prices?

So far flat.

Our next question comes from Pallav Mittal, Barclays.

Pallav Mittal from Barclays. I have 3 questions. So firstly, on the Renewable Energy segment, we have now seen that the energy prices have remained low for quite some time. So are there any changes to your plans on the wind power expansion projects that you have?

Yes. No more windmills. You're absolutely right. No, but the situation up in the north of Sweden, when it comes to the market and how it works and what the electricity price will be in 1 year's time, it's very difficult to make a forecast, to be honest. But with those prices, no new projects will come on stream. I can't imagine. So we will finish what we have, of course, and make the best use of it. But as long as it is like it is now, we will not build any new wind farms.

Sure. Secondly, if you could -- and I know you've already spoken about this, but can you help us understand what proportion of your production on the board side of things is for exports to the U.S. And so far, with existing tariff of 15%, how have your order books been impacted?

We only have like 5% going into the U.S. So that has not changed, and we don't have any plans to change it yet at least. But of course, we are trying to push through the extra cost we have to make somebody else taking it. I think everyone is doing the same right now. It's like an extra tax. Somebody has to pay. The idea, it should be us, but we think it should be someone else.

Sure. And lastly, just a clarification. So you had highlighted SEK 100 million benefit in your Board and Paper EBIT from the lower energy cost in Q1, and you have benefited in Q2 as well. So can you quantify that benefit that you see in Q2? And should we expect that to continue in Q3 and Q4?

The effect in Q2 was approximately SEK 250 million to SEK 300 million lower than normal levels. It's hard to predict how things will develop during the second part of the year. So far, we see that market behaving the same way at this moment as it has done during the first half of the year. How we will be able to execute it is hard to say, but the rationale and the market environment as such is the same as when we earn those money.

Just if I could follow up on this, how does this SEK 250 million to SEK 300 million lower than normal level compared to the SEK 100 million benefit in Q1? Just trying to understand the difference between Q1 and Q2 benefit.

Yes, the benefit in Q1 was SEK 100 million lower than normal, Q2 SEK 250 million to SEK 300 million lower than normal.

[Operator Instructions] Ladies and gentlemen, that was the last question, and this concludes today's Q&A session. I would now like to turn the conference back over to Henrik Sjolund, President and CEO, for closing remarks.

Thank you very much for good questions, good discussion, and for taking the time to discuss with us. Look forward to see you soon again. Bye-bye.