Holmen Stock

Ladies and gentlemen, welcome to the Holmen Interim Report January-June 2026 Conference Call. I'm Lorenzo, the Chorus Call operator.

[Operator Instructions]

The conference is being recorded. The presentation will be followed by a Q&A session.

[Operator Instructions]

The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Henrik Sjolund, President and CEO. You will now be joined into the conference.

Good morning, and welcome to the interim report presentation for the Holmen Group. It's me, Henrik Sjolund and Stefan Lorehn. We will go through the presentation. And as we usually do, we take all the questions you have after the presentation. So let's start.

Well, in the second quarter, first of all, the result, we were able to produce a really good result, at least a solid result, quite similar to the previous quarters. If you look at the year, though, we can see quite big changes between last year and this year, especially in the beginning of this year, we had a really good contribution from our Energy division. And now in the second quarter, we also see deliveries from Board and Paper.

Our financial position is strong. And during the first half of the year, we have also distributed roughly SEK 2.5 billion to our shareholders through dividend and buybacks. Let's start with our Forest division or, let's say, the wood market and the situation right now. It's clearly so that we have a lower wood prices. And if you compare the peak towards what we buy currently, it's roughly 10%. But then you should remember that we have discussed it a number of times that we also have a backpack with wood. We have bought at higher prices before and it takes time to consume that.

As things are today, we also had a storm in the beginning of the year. In our case, that means that in total, first of all, it was roughly 10 million cubic meters in our area, roughly 0.5 million, which is roughly half year's harvesting. And in this area, of course, prices are lower than the normal market, so to say, and we have consumed a bit of storm-felled timber and pulpwood already in the second quarter, and there will be some more in the third quarter. But it's, of course, also a temporary which prolongs it takes longer also to consume what we had in the backpack because now we are more occupied with the storm-felled timber and pulpwood.

Stefan, is there any extra cost for this when it comes to our own forest?

Yes, it is. As we communicated earlier, we will have increased harvesting costs due to the storm and that's also what we see in the results for the second quarter. Approximately SEK 10 million to SEK 15 million higher in the second quarter than normal. That partly explains the decrease in results from the Forest division. Also, prices came down for this division, of course, as prices are going down both for pulpwood and for sawlogs. And finally, the storm has made us relocate part of our harvesting resources from the northern part of Sweden to the storm region. And there, we take care of storm felling, of course, on our own land, as Henrik described, but also on other people's land that has been affected by the storm and that makes our own harvesting a bit lower than normal, and that level will maintain throughout the year, I would say.

Changing to something totally different, renewable energy. Now, that we have had during last year and some time before as well, quite difficult situation when it comes -- or, let's say, very different price levels when it comes to northern parts of Sweden, southern parts in Sweden and not the least versus Germany. You should remember though, last year, if you look in the Nordic system, it was roughly 20 terawatt hours more water in the system than what we normally have. And if you look at the situation this year, it's the opposite. It's roughly 20 terawatt hours of water less in the Nordic system. Not so much less water in Sweden, actually more in Norway.

In the first quarter, as you can see, when we had really cold weather for a couple of months in most of Europe, prices went together and there was hardly any difference between Germany and the different parts in Sweden. In the second quarter, still prices are on a more reasonable level, more normal level, roughly SEK 400 per megawatt hour. But of course, the system is still sensitive to the hydrological balance and the kind of weather we have, and we are lacking a bit of transmission capacity to make sure that the electrons can be used wherever they are needed, especially in Sweden.

If you look at what we have earned over the years, yes, the market is volatile. But as an average, we have made a cash flow of roughly SEK 330 per megawatt hour over the years. Will this stay in the same way? Well, I don't think so. It might take some time, and we have discussed it before. But over time, there is especially in the northern parts of Sweden and Norway, where you have access to not only electricity, but also green electricity, which is needed for Europe.

And when we look at what is about to happen, it's new industries, but it's also AI centers, et cetera, which we see coming, but it's not coming tomorrow, it takes some time. We are also active ourselves in, especially helping companies to make sure that they can produce, for example, an AI center up in the northern part of Sweden, also in other parts, to be honest.

Stefan, that means that we did a fairly good result.

Yes. Considering it being the second quarter of the year, we maintained quite a good profit level. As Henrik said, prices came down substantially in the second quarter from the very high levels that we saw earlier this year, but prices were on a decent level, and we had a quite good second quarter. The result would have been even better, actually, Henrik, if it wasn't for maintenance that was on the national grid in Q2 that made us curtail part of our hydropower production in Q2. Fortunately, we could save that energy in our water reservoirs, so it can be produced later on this year.

Thank you. Moving on to Wood Products. Well, not so much has happened. Demand is still a bit weak, both in U.S. and in Europe. But it's not only demand that is a bit weak. Supply has also been restricted. And if you look at Canada, actually, you can see the western parts of Canada, supply is coming down or production is coming down. Germany, same, after bark beetle infestation now volumes are coming down. And if you compare demand and supply, I think on the supply side, it's more structural on the demand side is more the business cycle that is a bit weak.

For the first time also for some time, we see that lately also production levels in Sweden that sawmills in Sweden actually had come down. Mainly because it's simply too expensive to buy the wood and the market prices does not support the price for wood in the forest. On the price side, well, normally, in the spring time, you have a bit of a price increase and a little bit better demand that happened also this year. Bit weaker than normal, but 2% to 3%, roughly, prices went up in export prices for us in Sweden. In the U.S., prices are fairly volatile and hovering around the same level, but some weeks up, some weeks a bit down, no big difference.

So to summarize that, Stefan?

Yes, of course, we're not -- still not happy with the financial performance from the Wood Products division, of course. But it was at least a small step in the right direction in the second quarter as the loss decrease from a level of about SEK 100 million per quarter to SEK 50 million. As Henrik said, we had somewhat higher selling prices in Q2, but also we had a stronger product mix which is normal also for the second quarter.

Finally, wood cost is coming down, and that also gave some tailwind to the results for the Wood Products division.

Then Board and Paper, starting with Board. But demand for folding boxboard or consumer packaging is going more or less sideways. I think the underlying economy is not bad, but for different reasons, it's not really taking off at the moment. But also prices more or less sideways unchanged prices for most of our business and no big drama at all. When it comes to paper, roughly the same situation, even though we have continuous declining demand in the market that's quite clear. Here, it's more the cost that keeps the prices level. And also keep the price on the same level as the last quarter. Cost is simply quite high. And also for most players, it means that we can't run full. And then, of course, the cost is also pushed up a little bit.

In our case, both for board and for paper our order books are fairly okay, actually quite good. But as you know, July is always a slower month when it comes to taking some downtime, et cetera. But where we are right now, the order books are not bad, and we're doing a bit better than the market, both in board and in paper. All in all, Stefan?

Yes, it was quite a strong performance from Board and Paper in the second quarter, mainly driven by high deliveries in Q2, both from paper, but also especially maybe I would say, from the board part of the business which gave tailwind to the result. Also here, we see that wood cost is coming down a bit, which also support the profit in the division in Q2.

Thank you. That's all. Then let's listen to good questions as we normally get. Welcome.

[Operator Instructions]

The first question comes from the line of Linus Larsson from SEB.

Maybe starting off where you ended on the volume side within Board and Paper, and it sounds like the volume pickup that you did see in the second quarter year-on-year, also up sequentially. It was mainly relating to Board, if I heard you right. What drove that? What products, regions and what -- you sound rather cautious that, in fact, you did record a pretty healthy volume development. So if you could just shed some light on that, please?

I can start with the split of the increase. It's quite evenly split, Linus, between the paper and the board business. As Henrik said, the order book looks quite good, to be honest, looking forward but it was high deliveries in Q2, partly due to a bit lower volumes than normal in the first quarter. So it shifts a bit from quarter-to-quarter. But again, order books look quite healthy, but third quarter is generally a bit slower than the second quarter, I would say, from a delivery point of view.

As the general market lines, as you know, it's operating rates are not very high. They are on the low side, to be honest. But given that, we feel that we are running fairly full when it comes to our machines and our mills.

And your remarks about sideways development, is that like on an absolute level for Board and Paper on aggregate is that type sideways in the third quarter? Or is it more like what you just said that Q3 might be somewhat weaker on the volumes?

I can only comment on the second quarter. It was a strong quarter. Then we will see if we can repeat exactly the same numbers in Q3. We need to come back on that. But it's no -- as Henrik said, no major drama in the order book that changed things dramatically on either the upside or the downside.

Cool. And then on the wood costs, lower log prices weren't visible in the P&L for the wood products business. I reckon there were other costs maybe increasing. In the third quarter, should we start to see -- I mean, what's the trajectory on unit costs, Q3 and Q2 in wood products and Board and Paper for that matter?

It's hard to comment on exact numbers. We saw that prices for both Sawlog and pulpwood were decreasing in the second quarter partly due to us consuming quite a lot of storm fellings in the quarter. As Henrik mentioned, we had this backpack with harvesting rights that we bought at higher prices. And what price we will see in Q3 is quite a lot dependent on the mix between storm fellings what we bought recently and what we bought earlier. But the trend is that it is decreasing, both on pulp side and sawlog side. But it's very tricky to give you an exact number, Linus. Single-digit figures, of course, low single digit, I would say, in Q3.

We are consuming the storm fell wood in Q2. We did some. And in Q3, we will consume more, of course, but it will prolong what we have in the backpack to be able to consume that as well.

Yes, yes. Partly what I'm getting at is other sources of potential cost inflation with regards to Iran and oil and logistics, chemicals, et cetera. Are you seeing that as an accelerating potential problem in the second half? Or have you kind of dealt with that or we past that?

Chemicals is still coming -- is going to be a bit more expensive in the Q3. Logistic cost, I would say that we are on the level as they are for the moment in the second quarter. So we don't see any increase there, but chemicals to some extent, but it's not major numbers we talk about, but we have not seen the full effect in Q2.

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

A couple from my side. Just a follow-up on the Forest division, I mean you talked about limited effect on results for 2026 on Slide 6. Is that just the fact that you're doing what you can to offset the higher harvesting costs from the selling of the other forests. I'm just trying to understand what the limited effect on 2026 you referred to?

No, what I mean with the limited effect is, of course, we will have higher harvesting costs. We have said approximately SEK 30 million to SEK 40 million higher for the full year. That will take a toll on the full year result. But the reduced volume that we see the lower harvesting that will not have that much of an impact on the P&L since we have the change in value of forest, which partly offset that decreased harvesting. So that's what we mean with the limited effect. The volume part of things.

We pushed some of the harvest a bit forward. That's all we do. But we have some more costs when the trees are laying down rather than standing up.

That's helpful. And then you haven't talked about in the Board and Paper business. A bit Holmen doing more kind of mechanical interline or kraftliner on the containerboard side. Can you just give some color on the commerciality of that product? I mean it's relatively new and niche. And is that supporting some of the volume growth of the business?

It's a good question. I think it's a bit too early because the volumes aren't substantial yet. There's a lot of interest for the product. We're happy with that, but we are not selling enough to give any kind of guidance or talk about volumes yet. Still to come.

And then if I look at the chances you provide from the Woodstat data, I mean the production in Germany is off substantially, right? I mean, we've seen several players curtail, including Mercer. They're also taking economic downtime on some of the softwood pulp mills, just sort of some context you could provide from what you're hearing kind of coming out of Central Eastern Europe? And when do you think we'll be in a position where inventory levels for sawn wood products are in a good position?

I think, first of all, what you see -- what I said before was that when it comes to the demand side, it doesn't need much to make things go our way, a bit better demand, a bit more activity in the construction side of the business. That's going to happen. The question is only when will it happen? The other part, when it comes to supply, as things are in the world or Europe, et cetera, I think it's a bit structural. It's not very easy to increase supply. So we will see what happens when things are picking up, but I would guess that you will see the supply a bit stressed.

And then maybe just following up on that. We've obviously seen the fires in France. I'm just wondering, do you think there is going to be any material impact to either the wood products markets kind of near term and long term? I imagine there might be kind of an excess supply of sawlogs near term, but I don't have a context of how relevant the French sawmill market is in that region?

I haven't seen any exact figures, how much they estimate that will need to be harvested short term due to fires. But normally, you can take care of wood from forests, which have had a fire. And then, of course, exactly as you say, you increase supply for a while. I can't answer how much it will impact the total market when it comes to the French forest fires.

That's helpful. And then last one, and I'll hand across. But Stefan, is there anything that you're calling out quarter-on-quarter into the third quarter that we need to be aware of? You talked about slightly lower delivery volumes in Board and Paper, but also maintenance. Anything else that you're calling out that we should be aware of into 3Q.

No. As you know, the maintenance shut will take at all on the order of SEK 150 million in Q3, which quite a normal level for that kind of shutdown. Then we need to come back to the delivery side of things when we published the Q3 report and see if we were able to maintain this good level or not.

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

So just a follow-up on the Board and Paper segment. Over the last couple of quarters, you have mentioned more pressure from imports, especially from Asia. Can you just talk a bit about that dynamic? Are you seeing any changes because of the situation in the Middle East? And is that also having an impact on your deliveries in Q2 and maybe potentially in Q3 as well? So that's the first one.

I think for us to begin with, we haven't really said that we experienced a lot of competition from Asia in Europe. It's more deliveries to Asia, where we could see some more competition, especially if you look for marginal business. But for a contractual business, also in Asia, we don't really see that as a big problem right now. Then we know that Asian producers, they have increased capacity and need to export, for example, also to Europe. But so far, there are no big volumes coming into Europe. Not in our segment.

Got it. And then if I could just ask in terms of the benefit from volatility in energy prices that you have experienced over the last few quarters. Can you quantify directionally help us understand how it has helped the Board and Paper segment in Q2 versus Q1 and maybe the last year when you were having SEK 200 million, SEK 300 million benefit per quarter?

I would say that we are back on a normal energy situation in Q2. So there's no major impact from that volatility that we saw last year. So more or less normal energy cost in that division.

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

Yes. I've got 2 questions left. The first one is on Board and Paper where you talk about fairly full and quite okay order books. Is this an improvement over what you saw at the beginning of the year? That's my first question.

A bit. Perhaps a bit better than what we expected. But as you know, it's a tough market. It's clearly overcapacity. But right now, our order books are -- they are okay. It's not one thing. It's many small things contributing to that.

And what are some of the main things? I'm giving you an opportunity to boast here a little bit about your products or...

I hear that, Oskar. We have many, many customers, Oskar. And we are in the -- not the least in the luxury segment, where we do see that what we do is having some effect, but it's not easy and it's not given, not at all. But the true answer right now is that the order books are okay.

All right. Good to hear. And my second remaining question is on the energy side. You said here initially that you're helping if I remember correctly, electricity consuming industries to develop themselves -- to establish themselves in northern -- well, Sweden or North Nordics. Could you say a bit more about that? You mentioned data centers.

Yes. Obviously, Oskar, if you're a company like us, having a lot of land and making use of the land and also helping, so to say, the electricity system as it takes so long for transmission capacity to be built out and have a better balance between the different electricity areas in Sweden. I mean, it's an interesting business for us. We are not fully there yet, but we will tell you when we have done our first part of the business. Access to power, access to land, in the part of Europe, where also the electricity is fossil free. It's a good start and an interesting business over time.

And if I may just ask a follow-up on this, and I realize you haven't announced anything that there's going to be a limit. Would you -- do you foresee a model where you're sort of leasing land and supplying energy? Or would you also be owners and sort of in these types of businesses? Again, I'm thinking a little bit to the analogy to the wind power where you start off leasing and then you move into owning.

The base case is to sell a bit of land for a totally different price than if you grow trees.

The next question comes from the line of Martin Melbye from ABG.

You hinted about this expensive backpack you have of the felling rights. Could you give some indications where the average price in SEK per cubic meter is on that portfolio compared to the current market prices?

No, it's -- we don't display that, Martin. It's higher than the current market price, and it will take time to consume it, but it will be a mix of what we've purchased a year ago, what we purchased last quarter and also the storm felling. So we don't have any numbers.

Is it significant? Is it significant?

It depends on what we compare to. The wood market is quite complicated for the moment when you have the storm in the middle part of Sweden where we see substantially lower prices than in other parts of Sweden. So it's relative to what you compare it with. Wood cost would have been cheaper if we did not have that backpack.

Takes time to come down to the level at what we buy wood for today. But it's going to happen. It's just a time of -- a question of how much time it takes.

It takes a little longer with the storm. But on the other hand, we buy a bit cheaper now.

Okay. And do you care to give any comments about prices for Q3? We've seen the list prices going slightly up on cartonboard paper? Do you agree on that? And what about lumber?

As you know, our paperboard business especially is quite sticky when it comes to prices. They hardly move, to be honest, if you compare to market prices. That part of the business is stable. As Henrik said, on Wood Products and also on paper, it's quite flattish prices as we see it today.

But you're right. The announcements we have seen is mainly kraftliner and testliner.

Which we don't produce.

We don't produce that.

Okay. Last question. You flagged lower harvesting in 2027 based on the storm, but the storm seems pretty modest to you. Is that -- and we should model any EBIT effect is that what we're saying also for '27?

More or less, so it's not the effect on our own land that is actually causing us to decrease our own harvesting. It's that we make use of our harvesting resources to take care of storm felling on other people's land. And the amount of harvesting resource out there is limited. So then we need to take a step back on our own harvesting and prioritize other people's land and use the wood from that in our own industry.

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

Just a few questions left from my side. The first is a follow-up on this for the Forest, the volume side of things and the fact that you've indicated that H1 own harvest volumes were 15% below plan, and you expect that weakness to persist next year. Can you give us an indication of what sort of volumes you are modeling for '27 and whether we're going to see any increase year-over-year related to that, whether extra harvest cost will be similar to what we saw in 2026? That's the first one.

Yes. What we've said about 2026 is we start with that one is that we will probably harvest some 300,000 to 400,000 cubic meters less on our own land. -- then we need to see how it will affect 2027 because we will not be -- we will not have finished the storm felling operations during this year. So it will roll over to 2027, where harvesting levels also will be lower, maybe not to the same extent as what we've seen for 2026, but we need to come back to that during the autumn when we see how these storm fellings play out during the coming quarter.

Okay. Second question on Board and Paper. You talked a lot about volume development in order books. Could you give us a sense of operating rates across the 2 segments in the second quarter?

We operate better than market, of course, Henrik.

You know that the operating rate in the market is maybe 75%, not better than that, but we are on a much higher level at the moment.

Not running full, but I feel that much better.

Paper is more difficult. That's -- it's also different because on paper, nobody is running full, I think, today. We are aiming at 85%, 90%.

So just to elaborate a bit on that, could you talk about the operating rates in board and in paper. I just want to get a sense on where the 2 segments are running at the moment.

In general, if you look at the statistics, then it's a theoretical figure based on what is being consumed in Europe from European suppliers and also what is being shipped outside Europe. The operating rate for European paperboard producers are roughly 75% on average. Our aim is a lot higher than that. And as we said, with the order book we have right now, we are running fairly full, not 100%, but fairly full.

On paper, it's roughly the same or even a little bit lower depending on which grade you look at. And there, nobody is running full. We are running -- we are aiming, I would say, at 85%, 90%. We've been there for a long time. And also that the order book is okay. So that's roughly where we are. And then it must be a quite big difference between different mills and different suppliers, et cetera.

Very clear. And just last question, you talked about this new sort of kraftliner product that you are rolling out clearly low volume at this stage. But could you talk about the main end markets that you're focusing on today and what the plan on a 1- to 2-year view as you start producing more and selling more into the market?

Europe is a main market for sure. But I don't want to comment on the volumes. I think we need to prove that we can sell and supply a bit bigger volumes before we talk about the potential. Of course, we have an idea, but it's too early to talk about.

The next question comes from the line of Johannes Grunselius from SB1 Market.

Yes. Stefan and Henrik, two questions for me here. The first one is on CapEx. If you can update us on how we should think about CapEx, not only for '26, but also for '27, '28, if it's like only maintenance CapEx or what you see? And if you can give us some numbers there, please?

Well, we have indicated for this full year, a bit more than SEK 1 billion. I would say that we don't have any major plans for the next year either. So I think you can use that for 2027 as well.

Okay. That's good to know. The other question I have is more on what -- if you can help us understanding what happened with the net working capital in the second quarter, it was a big buildup of capital -- and if you foresee that to sort of revert to the -- in the third quarter?

The reason is mainly due to very good deliveries in the end of the quarter, which increased our customer receivables. So it's just an effect from higher sales volume. Hopefully, that will maintain because that means that we are selling more products. If we come down in volume, it will be partially reversed.

[Operator Instructions]

The next question is a follow-up question from the line of Hathorn Cole from Jefferies.

It's a bit of a difficult question, but I'm hoping you can give me some context on it. And the one thing I feel people haven't asked on for a long time is around the Russian pulp, paper and sawmill industry. And I'm not asking on kind of wood potentially coming into the Nordics. I'm asking on what is the tail risk of potentially some of their sawmills or pulp mills ultimately having production issues or downtime because they are not being maintained, staff issues or potentially not having the harvesting equipment to actually get the lumber to their sawmills or pulp mills.

Do you have any kind of context? Or is that something that Holmen thinks about? And I'm thinking more on the sawmill and global lumber side. Maybe you could just give us some context of how many harvesters you produce a year, where you get that from? Any context you can give on that? I know it's a very difficult question, but any help would be useful?

I think it's a very good question. We think about exactly the same issues ourselves. What we do see, and we don't have all the statistics, but what we can see is absolutely that Russia is -- have not stopped producing wood products, absolutely not. And a lot is going east rather than West as it should, given the restrictions. I think you're right. It's difficult to get spare parts, et cetera. So it will, of course, have an impact. And as we are in this industry, having overcapacity in most areas, it helps a bit now.

What effect will be once there will be availability of spare parts, et cetera, again, I think there will be a big impact with wood coming from Russia going west again when that time comes. Even though it's mainly been sawlogs not so much to pulpwood, but still, for sure, that will have some kind of impact.

And then maybe for a little bit of color there, but for like harvesters and the products that you're buying for your own forest operations, who are the main suppliers? Are there -- were there any domestic Russian suppliers? Or would it all have been Europeans and effectively Japanese?

Frankly, I don't know exactly what kind of...

It's a good question again. I don't know of any Russian ones. I only know about the ones we use. They are not Russian. For sure not.

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

Thank you very much for taking your time and very good questions. Look forward to see you soon again. Thank you, and have a good day.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

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.