Stora Enso Stock

Good morning, everyone, and a warm welcome. Welcome to Wisdome. Today is a very special day for Stora Enso and above all for Bergslagets Skogar. I'm Jutta Mikkola, Head of Investor Relations in Stora Enso. A year ago in London, we promised a focused new forest company. And today, you will get to meet it. So the main part for today is the very first Capital Markets Day of Bergslagets Skogar. Then later, Hans Sohlstrom, the President and CEO of Stora Enso will tell you what Stora Enso looks like after the merger and also he will walk you through the next steps. Finally, we will have lunch together. And there you can continue the dialogue with the management of both companies. So without further ado, back to Josefine, enjoy the day.

Thank you Jutta. And now let's begin where Bergslagets Skogar begins, in the forest.

[Presentation]

A warm welcome to Bergslagets Skogar's, first ever Capital Markets Day. My name is Josefine Bonnevier, and I'm Head of Investor Relations at Bergslagets Skogar. It's wonderful to see so many of you here this morning. And a warm welcome too to those of you who joins us on the webcast. And I must say I cannot think of a better place than this a wooden dome made of Swedish timber to show you the big picture, This is a big day for us, a brand new company hosting its first ever Capital Markets Day.

Today, we want to show you who we are, what makes us different and above all, introduce you to the people behind Bergslagets Skogar. Our ambition is simple. When you leave here today, we want you to know 3 things. The forest is a real asset that grows. It provides steady cash returns, and we are all about the forest. So what's in store for you today. First, our CEO, Tuomas will show you how we are building a new independent forest company. Then Martin, our CFO, will show you what that means in numbers.

After a coffer break, Johan and Annika will take you into the forest itself our operations and our sustainability work. After that, we'd love to hear your questions. Most importantly, today is for you. Please come and find us at the coffee break or over lunch. The whole team is here, and we would love to talk to you.

And this is the team you'll meet today. They know all about this forest and they can't wait to tell you more about it. So let's get started to open up our very first Capital Markets Day. I'm delighted to hand over to our CEO. He has spent his whole career in forestry, but he's also a private forest owner himself. So for him, this is not a job. It's personal. Welcome to stage Tuomas Hallenberg.

So good morning, everyone. Only a few weeks ago, my family and I, we moved from Helsinki to Falun on Sweden. So we are still living in the middle of piles of carton-board boxes. By the way, they are made by Stora Enso. So quite literally, I can say that I moved directly to this new role. And I'm very happy to do it because today, we are going to start something new. So welcome to the very first Capital Markets Day of Bergslagets Skogar.

My name is Tuomas Hallenberg. I'm the very first CEO of the company. I spent my career in forest like we heard, being an industrial forester, the most recently I led Stora Enso Forest division. I'm very proud to lead Bergslagets Skogar. And let me tell you why. 5 things makes Bergslagets Skogar very special.

One, we are about a real asset that grows. Trees grow no matter what is the economical cycle. Every year, our forest is bigger than the year before. 137 million cubic meters standing stock and growing.

Two, scale in the right place, 1.2 million hectors, Europe's largest listed pure-play forest company, right in the heart of Swedish forest industry, traditional Central Sweden. Our customers on our doorstep.

Three, people and technology. Generations of forestry know-how now combined with newest data and newest tools.

Four, cash, so this is a capital-light business. We don't have mills to feed. The forest grows and return a part of that growth into cash by selling harvesting rights.

Five, more value from every hectare. This means better sealings, better timing of operations and also better land optimization. So there is a lot to unlock. So to summarize, Bergslagets Skogar, we are big we are well placed, we are growing and now for the first time, free to focus. That last part, free to focus is something new. Let me explain. So when I meet investors, they often ask me Tuomas, what is actually changing. My answer is how we think about forest. On the left is the past. Forest was a part of industrial strategy in Stora Enso, we call that the short forest. We harvested when the mills needed wood, and we were part of the supply chain.

And that is understandable, logical, of course, being a part of big industrial group. On the right is the future. The forest is the strategy. So that's why we call it the long forest. Now we can tie any forest operation, planting, clearing, thinning for the best growth of Forest and for the best value in the market. So we have our own Board, our own management and our own capital allocation and fully external commercial focus. And we are starting fresh. Even our systems, our IT team started from a scratch. So the platform is new, and we have no legacy. Just modern tools build for a forest company today.

For you, it means something simple. For the first time, you can own Swedish forests directly, transparently at scale and on stock exchange. So let's look at these 5 reasons, one by one. Let's start with the asset itself.

Reason one, Forest is a real growing, sustainable asset. Most assets, they do 1 or 2 things for you. Forest does 3, it grows, it protects and it pays. It grows every year. Whatever the economy is doing. And it needs very little capital, planting, clearing, keeping our forest roads in a shape and that's all.

The forest grows more than is harvested. And it stores carbon as it grows. It protects. Good forest land is rare and ours is one large state in a secure country. It moves differently from bonds and equities. And over the long term, wood prices have kept the pace with the inflation. And it pays. Every part of the tree has a buyer. And now we are free to [ time ] every operation for the forest and the market, not for a supply chain.

The returns come from 3 places. So Forest is growing, then cash from forestry and our adjacent businesses and over time, the value of land. Let me show you each of these.

First, it grows. Johan, our Head of forestry once took a group of visitors to a forest and asked them to close their eyes. After a while, Johan asked, what did you hear? What did you sense? People answered, well, just, wind, some birds. Partly correct at Johan. This is our factory up and running. So we work with the mother nature. It's production processes, and she works every day. So look at the numbers.

Over the last 100 years, the standing stock volume of Swedish Forest has doubled. At the same time, Sweden has harvested and we know that Sweden has very famous industrial sector in forestry. So Sweden harvest around 100 million cubic meters per year. And by way, in Bergslagets Skogar, we supply roughly 3 million cubics of that. The Forest grows more than we harvest. And that is what I mean when I say sustainable by nature, sustainable by design. That is a feature of forest. And it goes beyond. So growing forest, they take carbon dioxide out of the atmosphere.

Wood replaces fossil-based materials and can be recycled. And we manage our forest for biodiversity because a diverse forest is more resilient forest. A forest, that is at the heart of bio-economy today. Second, it protects. It all starts with scarcity. On the left, global demand for wood grows around by 1/3, by 2050. So more people, more cities, more wood replacing steel, concrete and plastics.

On the right, productive forest land is shrinking. So demand up, limited supply. And in that market, we own one big large -- one of the largest forest estates in Sweden, a low-risk Western country -- the second part of it protects is for portfolio managers in a room.

So today, it is hard to find a real diversification. Bonds and equities don't move as independently as they used to. And commodities, they swing a lot. So what else is there? Maybe gold grouped up possibly. Here is another answer. Real trees in the ground in a stable democracy.

Over 20 years, Swedish forest returns have had low or sometimes negative correlation with equities, property and bonds. And a listed pure-play forest company is something new. Until now, there has been no simple way to hold this asset in a portfolio. And over the long term, wood prices and land values have tracked [ the ] inflation very well. Year-to-year, of course, prices move, as everyone in this room has seen this year, but this is a long-term business and long-term asset. And over the long term, the link has held. That is what I mean by it protects. Real asset that brings balance to our portfolio over the long term. And now for the first time at this scale, a listed one. For an industrial forest, this is a picture I love. It shows clearly the Nordic forestry Nothing is wasted. The thick part of the trunk becomes sawlogs, and those go to buildings and wood products. And that is the most valuable part of the tree. The thinner wood goes to pulp, paper and packaging and the tops and branches can be used for renewable energy. In Sweden, this is a market worth around SEK 53 billion a year. And one thing I want to be very clear about. So we don't harvest ourselves. We sell harvesting rights.

Our product is a forest that has been planned and it's ready to harvest. And it's then our customers who will do harvesting and they take care of the logistics from the forest to their mills. So where do the returns come from? Three places. At the bottom, the value of forest land rising over time. In the middle, the forest growing in volume. At the top, the cash we earn from harvesting. So over the last 30 years, Swedish Forest has returned around 7% a year.

Now a personal reflection. In my career, I have seen land prices go up fast, and I have seen them going sideways. The bottom layer is set by the market and we don't control it, and we won't promise it. But the other 2 layers, how much the forest grows and how well we time our harvests. That's our job. That is exactly where this management team will spend its time. On top of that, adjacent businesses, they are -- they add an extra stream of income. And think about this, a property company, might needs to buy new buildings to grow. How at first, it grows on its own and without investments. So that is reason one, forest growth, forest protects, it pays.

Now reason two, why our forest? We own about 1.2 million hectares. That is nearly the size of Montenegro. On that land stand 137 million cubics of standing stock. Enough to build about 10 million wooden family houses. And that makes us the biggest listed pure-play forest company in Europe. The scale matters. It gives us spread across ages, species and local markets, and it gives us choice in when and where to harvest. But the size is not enough, location is everything.

Our forests are in mid-Sweden, so good soils, good growing conditions. Our gross standing stock growth has been 4.3% a year and that is higher than the one of our peers. This is why -- why is this then a sweet spot, the center of Sweden? Further north, trees grow more slowly. Further south, they grow faster, but the land ownership is more or less scattered. So in mid-Sweden we have both strong growth and large connected areas that are efficient to manage. So we are in the traditional heartland of Swedish forest industry within about 200 kilometers around our states, one can find dozens of sawmills and pulp mills.

Sawmills in our area use about 17x what our forest supply in sawlog. Pulp mills use about 21x what we supply in pulpwood. So in fact, the demand locally exceeds the supply, and that means that the companies have imports at a higher cost. So we start with a take-or-pay agreement with Stora Enso. That gives us security from day 1. Over time, those volumes will step down, and there will be more volume to be sold freely to the market. So we get the security at the start and growing freedom over time. This is where we sit in the value chain. Nurseries, forest management, selling harvesting rights. That's it.

We have no sawmills, no pulpmills to run. So why does this matter to you? First, less exposure to fluctuation of end product markets, like paper, timber. Second, low capital needs; and third, freedom. So we don't have mills or supply chain to feed. And every decision is about the value of the forest. So that focus is our mandate, increase the long-term value of the forest. We already run a productive estates, but we see a clear room for improvement and to do more. We can harvest when the market is right. We can get more sawlogs from every stand and managing land more actively.

On 137 million cubic even small improvements add up to a lot of value. That is reason to scale in the right place with full focus on forestry. Now reason three, the people and tools. So people have been caring for this forest for more than 700 years. That knowledge is in our people today. Silviculture, tree breeding programs, local knowledge from every compartment from every Valley. So what is new is how we now combine it with data and the newest tools so let me give you 3 numbers. We grow around 50 million seedlings a year in our nurseries.

Thanks to Swedish tree breeding program, the new seedling generation has 30% to 35% higher growth potential than the traditional seedlings. We also scan actively our forests by laser, drone and satellite. One example, satellite data has halved the field visits we need to plan thinning operations locally. And with the same tools, we have found around 10,000 hectares of productive forest in areas we used to classify as unproductive. It's all about analyzing the change. So our knowledge and newer tools. That is the combination where we make the difference. After the break, Johan, our Head of Forestry, and Annika, our Head of Sustainability, will you take more in details in this.

So Johan knows almost every compartment in our forest and Annika worked as a professor of forest before she joined us. So I can tell you, you will be in good hands. So reason four. How all of this turns into cash? Our cash model, it's very simple. In 4 steps, the forest grows. Our commitment is that the standing stock growth is 1% a year net after harvesting. We sell a part of that growth as harvesting rights at the right time.

Our costs are mostly flexible. They move actively. So we keep most of what we earn, and we need very little capital to keep our business up and running that cash goes to shareholders and into making the forest even more valuable. And finally, reason five, more value from every hectare. The biggest opportunity is in a core. It is the forest. And there are 4 main levers that you can see on the left-hand side.

So first, better ceiling and silviculture, meaning trees grow more, faster, stronger. Three -- sorry, two, better land. So turning on productive and into productive one and swapping or buying land to build more connected entities. Three, a better mix, more saw logs sold at the right moment at the right price. And for digital tools that make every operation more efficient. Beyond the core, we have adjacent businesses. We have seedling sales for other forest owners. There's also Falun Rodfarg the famous red paint factory in Falun, the production of which started as early as 1764, not to mention recreational rights and land for wind and solar power.

Today, they are around 10% of our business. They are an important addition and some of them have real long-term potential. But the main course in Bergslagets Skogar that is the forest. So 5 reasons: a real asset that grows, scale in the right place and generations of know-how with the newest tools. The model that turns growth into cash and more value to unlock from every hectare. So Bergslagets Skogar is a big, well-placed, growing and free to focus.

Now let me hand over to a person who keeps our numbers in line and he's got 25 years of experience in forestry and finance, our CFO, Martin Ros, Martin.

Thank you, Tuomas. So Tuomas has shown you why this forest is special. I will now talk about some numbers. But I will show you what it's worth, but also how it pays. And this business is really based on 2 engines. I want you to remember that 2 engines. It's an asset that grows every single year and it's steady cash flow every single year. And both of them can come to you as shareholders. And here's what makes this rather unusual. Until now, if you wanted that kind of return, a real asset that grows and pays cash, you mostly had to invest privately, perhaps forest funds or direct private ownership.

But from the listing next year onwards, you can own a share of this forest, that's scale. All right. So what can you expect from us? It's going to be and it is all about resilient total shareholder return. Stability and predictability. It's about the flexible business model. And I'll show you what I mean by that in a while, but it's in how we harvest, how we sell and our cost structure. And then strong cash flows. I'll also talk about that later, but really high cash conversion, about half of sales and we will be very disciplined when it comes to capital allocation.

We will have full focus on the forest, and we will maintain a disciplined capital allocation and a solid balance sheet. This all supports delivering stable and growing shareholder distributions. So put it all together, and that's the foundation for resilient total shareholder return, a return that keeps on coming through good years and difficult ones. Now let me take you through it one by one. And of course, let's start from the asset itself. On your left, look at the 100 trees. That's our forest today, 137 million cubic meters of standing wood. And every year, those 100 trees become 104.

And over the last 5 years, our standing stock has grown by more than 4% a year. And that's biological growth. Remember, nature does the work, regardless of economic cycles. And of those 4 new trees we harvest around 3, and that's what turns into cash year after year. And the fourth tree, it stays in the forest, it keeps on growing, and it gets bigger and more valuable. So again, 1 asset, 2 ways it pays, it grows in value and it generates cash.

Now let's add some time. In forestry, we plan in really long cycles up to 100 years. And the chart behind me looks forward to 2080. And the bars, they show our harvesting. In recent years, about 3 million cubic meters per year. And this year, 2026 is the exception. Late last year, there was a storm called Johannes in mid Sweden, and we are now harvesting more to take care of damaged forests. But going forward, we see a sustainable harvesting level of around 3 million to 3.3 million cubic meters per year in the near term. And look at the line above. It's the forest itself. And here's our commitment. We will grow our outstanding stock by 1% a year net after harvesting.

Remember, that's the fourth tree in my previous slide, and it's what keeps this asset compounding decade after decade. And because harvesting is planned over long cycles, we have room to adapt. We can harvest a little more or a little less, when it's right for the forest and for the market. Let's have a look at the balance sheet. We do account for forest at fair value. So it's based on what forest actually sell for in the Swedish market. And today, that's around SEK 63 billion. And as you can see, it has grown steadily, mainly because the forest itself has grown year after year and the standing stock has increased more than what we have harvested.

On the right-hand side, I think it's in a blue color. It's an illustration of the day of listing -- so take that forest value, substract a net debt of around SEK 9 billion, and you get a net asset value of SEK 54 billion. That's roughly SEK 69 per share, SEK 69 per share. And just as a reference point, last year, 12.4% of this forest holding was sold at exactly that book value.

But it's all about growing value, right? So how do we grow that value per share? And we do have a full toolbox. Tuomas has been describing it very well this morning. And this bridge shows it. Start again from the left, the core of our business, the forest that grows. We harvest part of it, and that turns into cash flow. But in the middle, other value-creating actions. For example, optimizing our land base, buying well-located forests and perhaps selling more scattered parcels.

Johan Djurberg, our Head of Forestry, he will tell you more about how that works in practice after the break. But then on the right-hand side, forest land prices, and that's the market. We don't control it, and we don't plan for it. Over the long term, as you said, Tuomas, it has been positive for Swedish forests. But our job is everything to the left of that. So it's growth, harvest, steady cash and smart land management. And that will drive net asset value per share.

Now let's have a look at the top line revenue -- and this gives you a sense of our wood sales at around SEK 2 billion per year. And within that, of course, prices and volumes, they do move and key part of our flexibility comes from how we optimize volume to market conditions. Take this year as an example. Remember the storm Johannes there was a lot of extra wood entering into the market and prices fell. We harvested more to deal with our storm-damaged forests, so volume helped us to compensate partly for that price. And that was the right call for this year, but it's not what we expect going forward because as an independent company, we decide when to harvest more and when to let the forest grow.

And also, please have a look at the mix. More than 60% of our turnover comes from sawlogs. And remember, that's the high-value part of the tree, which carries a real structural premium over pulpwood. Now every new company needs a solid starting point. And one of ours is an 18-year take-or-pay agreement with Stora Enso. There are 3 things I want you know. It's safeguards Bergslagets Skogar revenue day 1. It's always based on market terms, and the contracted volumes step down over time, and that gives us a growing ability to sell to other customers.

And the same map, have a look. That's the opportunity. I mean, we are surrounded by sawmills and pulp mills and Stora Enso will remain a very important customer for us, but we fully intend to build a broad customer base around it. And over time, we expect to serve many more customers in mid-Sweden, but now as CFO, my favorite part, cash. Again, starting from the left-hand side with our sales. Our cost structure, it's mostly for looking after this forest. It's planning activity, forest management, roads, and that leaves a very high adjusted operating profit. And then we reinvest a little, replanting after every harvest around 0.5% of the forest asset value that supports that long-term asset growth.

And here's the result on the right. So close to half of every Swedish kroner we sell, becomes free cash flow. And that is rare. And one more thing about these costs. Most of it is external services. So it's contractors who plant, build roads, help us with forest management activities. That means that our cost base is flexible and scalable. If we, for example, choose to harvest less in a year, our cost will come down, too. So fixed costs are limited.

I would also want to mention that we will have some extra stand-alone costs from '27 next year on onwards as we separate from Stora Enso. But the model stays the same. Very little capital tied up. So, what do we do with that -- all that cash? We have some real choices. And here's a bit of the same story, but again, over time. On the left-hand side, again, stable high margins, around 2/3 of sales and on the right, free cash flow return. Meaning the free cash flow compared with the value of the forest.

And last year, it was at 1.7%. Our long-term ambition is 2% free cash flow return. But remember, that 2%, it comes on top of the asset growing. So cash return plus asset growth. Those 2 engines again, now first, let me start with the balance sheet on the left-hand side. At the time of listing, we will start with a net loan to value of around 14%. And our target is to stay below 20%. That keeps us robust and investment-grade like. And secondly, our priorities are very, very clear. Our forest needs very little investments. And most of what we earn can go back to you.

So our dividend policy is stable and growing dividend, paying out 80% to 100% of adjusted net income. And that's an undertaking right now. It's how we intend to run this company from day 1. Now let me try to bring it all together for you. These are the 6 areas we will hold ourselves to. Again, growth, 1% net standing stock growth a year, while also increasing climate benefit. A 2% free cash flow return while also increasing our biodiversity benefit. And again, a net loan-to-value of below 20% and stable and growing dividends.

Together, they add up to resilient total shareholder return. So an asset that grows steady cash flow and a sustainable company built to return it. Now before we go and have a break, let me also introduce our next speakers after the break. Johan Djurberg, our Head of Forestry. He's really one of the most experienced foresters I know, both when it comes to wood trading, but also forest management.

And after the break, we'll show you more about how we run our business in practice. And Annika Nordin, our Head of Sustainability. Career as a professor in Forest Science, and she'll show you how our ambition in business and sustainability really goes hand-in-hand. But first, and also for those of you joining us online, we will have a coffee break. And I mean, we're all here, so we're happy to engage and talk with you, and I would like to see you all also online back here in 30 minutes.

[Break]

Welcome back, everyone. I hope you enjoyed the coffee and had a chance to meet with some of the team. So far, you have heard how we are building a new independent forest company and what that means in numbers. Now it's time to take a look into the forest itself. Here to guide us are Johan, who leads our Forestry operations and Annika, our Head of Sustainability. Welcome up to the stage, both of you.

Thank you, Josefine. I prefer to take people out to the forest, the real forest when I'm talking about forestry and forest operations. Well, I cannot do that today, but I'm very glad that many of you will follow us to the forest tomorrow. My name is Johan Djurberg, Head of Forestry at Bergslagets Skogar. I've been in this business for about 18 years, working with different parts of the value chain. My interest for forest and forestry started at a very young age, spending time in my family's forest.

And I'm Annika Nordin. I'm Head of Sustainability. I have similar childhood memories from my family's forest. After that, forestry school and academic career in forest science and now for 6 years here. Johan?

So you have heard this a couple of times this morning, Bergslagets Skogar will create long-term value. With tree breeding and active forest management, we will grow more. With better data and land management, we will increase the value of our land. We also see new income streams beyond the trees and our foundation, forest expertise and forest intelligence with sustainability at the core.

During this session, Annika and I will tell you more about how we run Bergslagets Skogar in practice. You have seen this slide earlier this morning. This shows our core. In the nurseries, we grow the trees that you will see in our forests in the future. In my hand, I have thousands of seeds. Seeds that will become the future trees of Bergslagets Skogar, trees that will grow much better than the trees that we harvest today. Annika will come back to this. Forest management, how we manage our forest to combine growth and production with social and biological values.

In the film that you saw a few minutes ago, you actually met one of our colleagues, Frida. Frida is working as a site planner at Bergslagets Skogar, she was marking the boundary of an upcoming harvesting. Before she did that, she also made a nature value assessment, which is a standard procedure when we do the planning, working as a planner it's complex. You need to have a lot of knowledge. You need to be very good at roads, water, biodiversity, and of course, harvesting operations.

But the final result, well-planned harvesting rights. Our main offer. Bergslagets Skogar will focus 100% on the forest and our customers. On this slide, you also see the adjacent businesses, and that we'll come back to a bit later on, as you know by now, Bergslagets Skogar operate in a highly attractive wood market. Customers on our doorstep knocking on our door. Bergslagets Skogar, we sell harvesting rights according to about 3 million cubic meters a year, as you can see on the left-hand side on this slide.

Within 100 kilometers from our assets, the wood consumption is about 41 million cubic meters, sawlogs and pulpwood. If we look at the total catchment area, the same number is about 55 million cubic meters. I've been working with wood supply within Stora Enso but also outside for more than 1 decade, mainly in this specific area. I know that in this geography, the demand is bigger than the supply. I know that in this specific area, the challenge has been purchasing wood, not selling. Said that I would say that Bergslagets Skogar have a very solid and very interesting customer base for the future.

We are offering harvesting rights to our customers. That means that we are offering sites that are well planned and harvest -- ready to harvest. Being responsible for wood supply for many, many years, I know that Bergslagets Skogar will create value for our customers. I know that we will be an important part of their supply chain. By selling harvesting rights, we will, as one example, create flexibility to our customers. The customers harvest a specific stand that fits into their supply chain at that specific moment, maybe support the assortment mix or maybe the site has the right ground conditions that's needed at that specific moment. As one supplier once told me many years ago, Johan, you should know one thing about wood supply and forestry. And that is it is an outdoor sport, meaning that a lot of factors can impact what and where to harvest.

With big volumes, well-planned harvesting rights, we will create flexibility and support an efficient supply chain. We use sustainable forest management and 100% of the volume is certified. Bergslagets Skogar is a supplier that customers would rely on for years. So how do we do this? Forest expertise and forest intelligence. And let's open this up a bit more, and no one is better to do that than you, Annika.

Thank you, Johan. As said, before I joined Bergslagets Skogar, I was for many, many years a professor in forest science at the Swedish University of Agricultural Sciences. So I think I can say with some confidence that Sweden is actually one of the best places in the world to learn about forests and forestry. One reason is the long tradition of collaboration between science and practice. It can be that a problem is identified in forestry practice, research is started and as soon as research has a solution to the problem, that solution finds itself straight back to forestry practice. This also anchors all levels of forest education to the reality of the forest business sector. Nothing makes me as proud as meeting my former students out here in the forest business sector. I can see for myself, they have deep forester expertise.

They know how to use the latest technology and data they are aware of the legacy of previous generations of foresters, and they have a deep understanding of the forest as a living system. That knowledge that belongs to our people, that is the first foundation of our company. The second foundation, that's data. And in Sweden, Forest data dates back for more than 100 years. In 1923, Sweden did its first national forest inventory. Back then, lots of men because at that time, all foresters were men. They were sent out in the forest to walk along evenly distributed straight lines and each time a man encounter a tree he measured and recorded it. It took many men and several years before anything could be said about the state of Sweden's forest at the time. Today, the situation is dramatically different. Women can be foresters, for example. But also, we still do forest inventories, ground-based inventories.

But in addition to that, as Tuomas mentioned, we collect forest data in so many more ways. We can use satellites, airborne laser scanning, ground-based laser scanning, aerial photographs, drones and even forestry machinery to collect forest data. We use modeling powered by artificial intelligence and machine learning to combine different sources of data and to make data into solid decision support. For instance, we used scenario modeling to optimize forest management for desired outcomes and balance between forest different values. And we, I mean all this with better data and better more data that makes us more precise and more efficient when we do our forestry, so it means we get better and better at doing the right thing in the right place at the right time.

And we still do walk the forest. Remote sensing technologies, they are really good at seeing the trees, but still many organisms of the forest can only be seen by those walking in it. Now an example of how knowledge and data can be combined. This is where the future forest begins, in our nurseries. In the picture, you see Linea, each day at work, together with the team, she sends more than 1 million seedlings in one of the greenhouses. And altogether, in the 3 nurseries, we grow around 50 million seedlings a year.

All these seedlings, they originate from the Swedish tree breeding program that has been running since 1936. Tree breeding that is to identify trees with desired traits and to cross them with each other. A desired trait has always been high growth rate. But over the last few decades, also other traits have been included in the tree breeding program. And those are traits that make trees more robust to climate change. So for instance, it can be that trees are more resistant to dry climate, dry weather, and it can be either they also become more resistant to infestations by pests and pathogens. And new technology and innovation is very much at play in tree breeding and also in the production of seedlings.

For instance, today, many tree seedlings can be made from the same seed. And also, we can use new gene editing tools to sort of speed up traditional tree breeding. In Bergslagets Skogar, we grow more seedlings than we need for our own forest. So we sell seedlings to the market and supply to private forest owners in the area superior seedlings that are robust to climate change. And back to you, Johan, for some more examples of value creation.

Thank you, Annika. With forest intelligence, Tuomas mentioned one example this morning, we can identify pre-commercial thinning with satellite images combined with the data model. Another example is that we have been able to identify productive forest land that were earlier classified as nonproductive. With nonproductive means that the forest goes very, very slowly. We've done this with laser data and data model, a model that has been developed with our own staff within Bergslagets Skogar. This will increase the value of our land. More of our existing land will be used for harvesting. But at the same time, we have also identified areas with high biological values, areas that we will not harvest, areas that will become [ set-asides. ]

So far, we have identified about 10,000 hectares and the potential is much bigger than that. Another example how we can increase the value of our land is what you can see on your right-hand side. We call it land swaps. We sell scattered areas and purchase productive forest land in our core areas. Between 2023 and 2025, we made about 80 transactions. The result more valuable assets and an increased efficiency in our operations. On this next slide, I'm trying to show what I just said. So if you look at the left-hand side, you can see a green area, a light green area that we purchase, and it fits very well into our core assets. And on the right-hand side, you can see these red areas, which we sell out, scattered areas, far away from our core assets. This is one example. But Annika, isn't it so that biodiversity also increased the value of our land?

Yes, you're right, Johan, and I will try to explain why. For me, sustainable forestry is very simple. It's about keeping the forest healthy and productive for now and in the future. In Bergslagets Skogar, we focus on 2 things: biodiversity and climate. Both are important for the planet. Both are important for business, for customers, for certification and for keeping the long-term value of the forest. Let me show you each.

Biodiversity is integrated into every forestry decision. Each time we harvest, we leave trees, these are called retention trees. And these are not just any trees. These are the trees that make the most good for nature. We can see that they have, for example, lots of different species of mosses and lichens on the trunks or in the branches. Or we can see that they would form wonderful housing materials for birds.

All that we can see, but we also consider what we cannot see, what's below the ground. Underground, trees are linked to fungi, so-called Mycorrhiza. Mycorrhiza is a living network of tree roots and fungi that stretches out in the forest soil. And the fungi and the trees, they exchange with each other. So fungi provides to trees better access to nutrients and water and trees provide to fungi carbon.

By leaving the trees behind the retention trees, the fungi can survive in the harvesting site and the fungi moves straight into the roots of the new trees seedlings, giving them a head start. I think this is a wonderful example of how science has been turned into everyday forestry practice. And another example now, it's about restoration work, systematic restoration work that over time has brought good results. And this is about the white-backed woodpecker. This bird is critically endangered in Sweden. Its home in old growth deciduous forest that is rich in deadwood and often close to water that has almost disappeared over the last century.

And this is a problem for the white-backed woodpecker, but also for the more than 200 other red listed species that prefers to live in the same kind of forest. Since the 1990s, our company has been setting aside and restoring forest for these species. Today, we own and manage around 6,000 hectares and management is very important. Natural succession would turn these forests into spruce-dominated forest. So we need to remove spruce. We need to create deadwood, and we need to promote the deciduous trees.

And I would like to share one story when we went to -- we did an extraordinary effort, I think, to actually restore a woodpecker forest. And this was in Varmland to the west in Sweden. And we built a pontoon bridge over the big Varmland River, Klaralven, big river. And we did this to be able to harvest and transport really big coniferous trees from an island in the middle of the river. And today, that island holds a perfect woodpecker forest.

In 2024 and 2025, I think also, around 14 breeding pairs have been spotted in Sweden of this bird. It may sound little, but this is the best in 30 years. And this is not only thanks to us. Also other actors have done similar efforts to restore and protect Woodpecker forest. And together, we can now enjoy the positive results. And we are proud to be part of this success story.

Climate, a few words on climate. Here, good climate work goes hand-in-hand with good forestry. If you look at the graph and the red line, you see annual carbon uptake over age of the forest. That is annual growth of forest over the age of the forest. And you can see that forest grow best when it's young and then that growth levels off as forest age. And if you look at the green dotted line, you see average carbon uptake, that is average growth over the lifetime of a forest.

If you harvest the forest too early, that is to the left in the graph, then you risk to cut the forest off during its best growth years. As an independent company, we can time harvesting for ourselves. And we can push harvesting to the right, which means we don't harvest forest until growth really starts to decline, and we can hit the sweet spot when annual growth intersects with average growth. This may create additional revenue opportunities. In EU policy development, now there seems to be some tailwinds in the carbon removal carbon farming framework towards a voluntary carbon market that will function in Europe, and that will recognize verified forest carbon removals. This by recognizing and rewarding additional carbon sequestration in forest that is a permanent increase in forest carbon stock, which, as Martin pointed out, is our target. Back to you, Johan, for some more insights on adjacent business opportunities.

Thank you, Annika. If we start on the left-hand side of this slide, existing businesses that we have already today. Annika mentioned earlier that we are selling seedlings to thousands of other forest owners. We also have land use rights, for example, hunting rights. And then we have the famous Falun Red paint or Falu Rödfärg. If you live in Sweden or if you have been traveling in Sweden, I'm sure that you have seen many red wooden houses. And I'm very convinced that many of those has been painted with our paint, the original Falu Rödfärg.

The paint that has been made in Falun since 1764. If we look at land development, wind and solar power, already today, 1 terawatt hour is produced on our land and the long-term potential is about 20. The business model, we lease the land, developers build and operate. Bergslagets Skogar keep the land and earn a steady income with limited capital. And then if we look into the future, and Annika, now I will more or less repeat what you just said. But of course, there can be new income streams from carbon credits.

With an increased standing stock, as Martin described earlier, Bergslagets Skogar will capture more carbon, future opportunity with tailwind from the work that's ongoing within the EU. So let's summarize this. Bergslagets Skogar will create long-term value. With better seedlings and active forest management, we will grow more, better data and increased biodiversity and smarter land management, we will increase the value of the land. And we also see extra income beyond the trees. This is enabled by the people who knows the forest, the data that sees the forest with sustainability at the core. Thank you very much for listening, and over to you, Josefine.

Thank you, Johan, and thank you, Annika. Wow, from 700 years of knowledge to data that enables us to see every tree. I'm sure this has sparked plenty of questions and the whole team is here to answer them.

Questions are welcome from the room and from the webcast.

[Operator Instructions] Let's start with a question we often hear from investors. What will you actually do differently from day 1, Tuomas?

Thank you. Thank you, Josefine. So first of all, when starting with an independent company, like I said, we will have a freedom to focus. And that applies timing when it comes to silviculture operations, best seedling material and timing of harvestment, when to do the thinning, first thinning, second thinning, final felling. So we will maximize the growth of forest. And then not only the traditional knowledge and know-how what we have, we will have data-driven tools and support to do many things in a new way. And of course, I want to mention this land use, what Johan just mentioned that land use will also support this. So company will have a strategy of its own. Board of its own management and also its own capital allocation, which makes a difference.

It's Linus Larsson with SEB. I'd like to start off asking about your harvesting plans and the trajectory of growth in harvest, and you touched upon it in your presentations. For instance, you are targeting 1% growth of standing stock, and I presume that's a long-term target? Or should we even see it as a short- to medium-term target? And how does that affect your actual harvesting levels? For instance, in 2025, effectively, you grew your standing stock a lot more because your harvesting was 65% of growth only?

Martin, would you like to start?

Yes, sure. I can start. Maybe still starting with the big picture, 1% net growth every year after harvesting. And that's based on a 10-year rolling basis. That's how we see it, and that's also the line and the graph I was sharing and talking about earlier. During the past couple of years, we have been harvesting around 3 million cubic meters per year. But remember the exception, and I think that's partly what you're referring to. Late last year, there was a storm called Johannes.

And this year, 2026, we are taking care of storm damaged area basically, which means that we are harvesting a bit more. But going forward and in the near term, we expect that the harvesting level will be around 3 million to 3.3 million cubic meters in the next coming years. Anything you want to add, Johan, on that?

No. And as you said, Martin, we will harvest about 3 million to 3.3 million cubic meters, but at the same time, have this net growth.

Oskar Lindstrom from Danske Bank. I wanted to ask about whether or not you see share buybacks as part of your toolbox in creating returns for shareholders and whether you will seek a mandate from the EGM for buybacks.

Martin?

Thank you. First of all, remember, our core task is to increase the net asset value per share. And that's -- we have our full focus on that, growing the asset, harvesting to deliver cash returns, but also optimizing and making every hectare worth more. Then when it comes to ways of distributing to shareholders and potential buybacks, that's, of course, something I think it's important to have in the toolbox, but it's something we will come back to later.

Andy Jones from UBS. A couple of questions. First of all, on the wind opportunities. Can you give us an idea as to if you get permitted land for wind leases what that does in terms of the uplift in the value of the land? I mean, what's the potential there? And given the permitting issues in Sweden, realistically out of that 20 terawatt target, how much of that do you think could actually be unlocked in the next, say, 5 to 10 years?

Would you like to start, Martin?

Yes. Thank you I can start and Johan, please feel free to complement. I can't give you time and the potential, I think, in the next 5 years. But what I can tell you that the potential of 20 terawatt hours on our land -- that is a real potential. And we know it. I think Tuomas, you used the words, we know every site and every valley. So we have people and knowledge in the whole area of mid-Sweden where we're also an active landowner.

And for that reason, we can actively develop also the availability of making wind power on our land sites because we know the system. We know the local questions. We want to increase the likelihood of wind power and decentralized renewable energy being built on our land base. So we think the 20 terawatt hour potential is really and is real, but we will not today give an exact time line for that. And I think when it comes to value being part of developing those projects and making sure the likelihood increases, there is a significant value in renewable energy and wind power going forward.

In Bergslagets Skogar, we also have a good knowledge on the wind energy and also solar. So we have a portfolio of projects consisting of many cases in the different phases. And currently, there is 1 terawatt hour of capacity up and running installed in company lands. And referring what Martin said that we have identified realistic interesting potential up to 20 terawatt hours. But it is important to realize that the way we see it, the focus is on land leases and partnering. But we want to, of course, continue this portfolio development as we see that there is a lot of future potential in wind and solar both.

And remember that this is not competing with the forest and forest management at all, which is, of course, a great opportunity.

Let's break in with a question from the webcast. Annika, this one is for you. Swedish forestry is criticized for clear cutting. How do you show your biodiversity benefit is real and not greenwashing?

Important question. And what we aim to do is to really be able to measure biodiversity to make it real and measurable, so see that we can really deliver increased biodiversity benefit over time. As I said, also when harvesting, harvesting for regeneration of the forest, we have very many different tools in our toolbox to make sure that we can protect and enhance biodiversity. And then we are part of restoration programs that go across Sweden like the white-backed woodpecker.

And also coming back to what you told a bit earlier, Annika, the seedlings that we are planting today grows much better than the trees that we harvest, which means that these trees will be a much better carbon sink in the future. And that is, of course, very good for the climate.

Yes. In the back?

Joni Sandvall from Nordea. Maybe a question on forest maturity structure. You mentioned longer -- maybe longer growth period and to maximize the growth of the forest. Can you give any comment on the mix development, let's say, in next 10 years because we know that logs are -- you are receiving better cash flow from the logs.

Johan, would you like to start on that one?

Yes, I can start. In Sweden, it's strictly regulated when you can harvest a tree, which means that we need to take that in consideration. And in the presentation that you showed, Martin, we see that we will have a sustainable harvesting level about 3 million to 3.3 million cubic meters per year for the coming years.

Yes. I think also what you can take with you, I did share, remember a graph up until 2080 with assumed harvesting levels that this forest, while growing 1% per year can also increase the harvesting outtake and the cash flow generated from that. So I think that gives at least a picture of the age structure of our asset and our forest.

Modeling, as I said, forest modeling is used for modeling, forest management to optimize it for desired outcomes. So we are quite sure of how to model the forest and what the outcomes will be.

Ephrem Ravi from Citi. Given your objective of growing net asset value per share, doesn't the 80% to 100% payout ratio restrict your flexibility in terms of acquisitions? Is that a part of your strategy at all? And if I can squeeze in half a question, is your operational area clearly defined as Central Sweden? Or is the rest of Sweden or even rest of Europe, is that part of your operational footprint in the long term?

Tuomas, would you like to start?

Thank you, Josefine. So first of all, in Bergslagets Skogar strategy, first 2 years, we will focus on stabilizing the business and developing it. And this means I don't come back to this silviculture things and decision-making, the full freedom to focus, but that means organic growth. So that is our focus. But then, of course, this being said, we take into consideration the opportunities to increase shareholder value.

No. And maybe I can complement. It was 1.5 questions, I think, but on the same theme. And also, as Johan shared earlier, we are an active land manager. During the past 3 years, we have conducted 80 or so transactions, and we will continue to optimize our land, meaning selling and buying and optimizing and increasing the value. And that was the middle of the net asset value per share I was showing. And as you also said earlier, Johan, to get operational or customer value benefits, we don't put any restrictions on exactly the geographical area. But of course, the core is in mid-Sweden. And again, remember the map, that's the opportunity.

Let's take another question from the webcast. Tuomas, this one is for you. How will you decide when to harvest more and when to let the forest grow?

Sorry, please repeat.

How will you decide when to harvest more and when to let the forest grow?

This is a forester by heart question. So this is all boils down to the age class distribution, also what kind of soil types we have. In forestry, we call it the Bonitet classification. So what the site -- what kind of features the site has to grow the forest. So the trees, the better land the faster the trees achieve the limit of, for example, the 15 meters dominant height, what I mentioned in my speech. So it's a question of combination of tree species, mixed forest, coniferous forests and then site types.

And this boils down to the data what we have. So data-driven decision-making, the better data we have, more accurate analysis. For example, take an example, it is possible to analyze the change of forest growth in a very economical way and very easy way nowadays because the data is available from laser scanning, from satellite data, drones and also from the site. So we can combine that and analyze that by using AI. So this all boils down to the technological development to be combined with the biological processes.

Yes, like the graph I showed, we want to harvest before the growth starts to level off too much. And we have data so we can see when that happens on stand level, that is what Tuomas is saying, I think.

And also, please remember the flexible business model. I mean I talked about it, I shared it to you and the cost structure that is very flexible, mainly outsourced services. So we will and we plan to be able to decide when to harvest and to sell and when the forest to grow in an optimal and flexible way.

And to mention also when earlier, we've been a part of the supply chain and the industrial strategy. So let's jump into the forest. There's a case, there's a site, a stand at the age of 65, Scots pine, let's say. And there is a need coming from the industry side. So sometimes there was a need that, okay, it's legal to harvest it, we will harvest it at age of 65, even though from a forestry point of view, the optimal might be like 71 years in that particular biotope. So that is the freedom of choice.

Antti Koskivuori from Danske. Two questions on harvesting, if I may. First one on the supply agreement with Stora Enso. -- just to confirm, you talked about flexibility of harvesting. Is it so that you decide the volume of harvesting and then Stora Enso takes their share of that? Or how does it -- how does that go?

Yes. Maybe I can just continue. And as it was, as I explained, it's an 18-year take-or-pay agreement. And the graph I was showing you earlier with gradual step-downs, that's actual real agreed volumes going forward. So then it is up to Bergslagets Skogar to decide, again, coming back to the map, how do we best optimize our business model and who do we serve? Stora Enso will remain a very important customer, but it gives that step down over time gives us the flexibility to serve where we can create most value for ourselves and for our customers. I don't know, did that answer the question or...

Yes. Second question about the harvesting mix I mean earlier, I've assumed that Stora Enso has been more interested on pulpwood than roundwood. And do you see a change in the mix more into roundwood now going forward?

Would you like to start, Johan?

Absolutely. I'm coming back to the slide that you showed when it's the optimal time to harvest. And if we follow that, we will make sure that we have as much value as possible, which means that we will have a big share of sawlogs in our forests. So we will focus on creating value for sure.

This is Paco Ruiz from BNP. My question is, you're mainly selling the harvesting permits. Why don't you go downstream and try to manage also the harvesting in order also to create some value and probably protect, I mean, the growth of the forest better than doing by a third party?

Maybe I can just start and then Tuomas, please feel free to chip in because it links to what I said just a few moments ago. Remember this upstream value position, it's very flexible. We are selling a ready for harvesting site. And that makes us very flexible, capital-light, and we can deploy resources in a very flexible way. But you are, of course, right that there are players and you can act a bit further down in the value stream. Something you want to add, Tuomas?

Well, I think you mentioned already that it's very important for us, how we show today our strategic targets, for example. So being very effective in capital allocation, and that would change quite a lot when thinking of this second alternative you described. So we are willing to commit what we have said today. And this model, we see that this is a proper way and suits very well for our location, geography, our systems and our entity very nicely.

And also coming back to what I mentioned in my presentation, I'm -- I mean, I've been working with wood supply for more than a decade. And I'm sure that with our value proposition, we will be able to create good value for our customers because supply chain and wood supply, it is complex. And I mean, as a provider of big volumes, many stands that are well planned that will fit in very well to our customers' supply chain and creates value.

And to add in still what we said earlier about the exposure to the end product fluctuations, for example, I think in that sense, our role currently is seen as an attractive one.

Let's break in with another question from the webcast. This one is for Johan. Almost all your volume goes to Stora Enso at first. How will you build a broader customer base?

Yes. And as you saw in Martin's presentation, already 2028, we will have the opportunity to sell volumes to other customers than Stora Enso. And as you saw on the map that Tuomas showed this morning, there is a lot of customers, both sawmilling companies and pulpwood consuming companies in this area. So I'm very convinced that the interest for our harvesting rights will be big going forward. And as I mentioned, we already have customers on our doorstep actually knocking on our door.

Andy Jones again. Just a question on the valuation of the company and how investors look at it. If the stock starts trading and it trades at a substantial discount to the book value that you report, what measures could you potentially take to correct that? I'm thinking about maybe selling plots of land to try and prove that valuation as you have done in the past with a 12% sale of the Swedish forest -- or does that risk shrinking the company too much? Like what would be your response to the stock, say, trading on a 20%, 30% discount?

Would you like to start?

First of all, coming back to why we are here, what Bergslagets Skogar is about. We are planning for and we in the management are growing an asset that grows in cubic meters, but also in value over time, and we're taking out some harvest we're generating cash flow. So those 2 engines, I just wanted to come back to those. And I really believe in those. It does really work. This is a sustainable business model built in a sustainable company going forward. So that's important.

Then there was a similar question earlier. I think the toolbox as such is wide. We are, and Johan shared it earlier, we are active in the Swedish land market with our focus to optimize our land base. But again, we made 80 or so land transactions in the past 3 years. And we will, for sure, continue to transact areas to optimize and improve our portfolio. And I think that's how far I would like to go today. But I mean, the toolbox is there. We know land, we know forestry, and we know this area of Sweden.

And also forest is something special like I explained in my speech. So it's a one-of-a-kind asset class. And that means that I think we have a positive challenge in front of us to tell and show to the market how we create shareholder value. And we are fully committed to that.

In the front here, mic please.

Oskar Lindstrom with Danske Bank again. You showed in the chart that you had harvested more volume this year due to the storm at the end of last year and that the increased volumes have also had a positive impact on your earnings. Should we expect you to harvest less in the coming years to sort of compensate for that, that there's a shadow effect? And if so, what's the magnitude of the shadow effect and the length of it?

No, I can start and Johan, please feel free to fill in on forestry. No, I mean, as you said, the shadow effect, the plan I showed earlier, and we expect to take out 3 million to 3.3 million cubic meters in the near term. That's already built in there. I mean storms will happen. They happen more and more often, probably in the future, and that's already built in. And also, we do have the flexibility within this asset to sometimes take out a little bit less and sometimes a little bit more.

It's already built in, so to say. But anything you want to add, Johan, on the storm damaged forest because that's a lot of operational work where you and your team has been very busy this year. And that's really the reason why we have taken out a bit more volume this specific year. But you should not count that, that has any effect really on the future.

Now what I can add is that the numbers that you saw comes from new made long-term harvesting calculation, which includes the storm or the impact from the storm, as you said, Martin.

Let's take a last question from room.

Linus Larsson with SEB. You talk about monetization of carbon removals, a novel business model in Sweden. I'm a bit curious how far you would be willing to go? Would that -- would you do that on a bilateral basis? Or would that be reliant on EU-wide standardization system in place? And would you be willing to do that at the expense of conventional forestry and harvesting?

Annika, would you like to start?

I can start. I mean, in the EU, there is forest or forest policy development at the moment, the carbon removal carbon farming regulation that is trying to establish a verified or a voluntary carbon market in Europe that is functional and that would recognize verified forest carbon removals. And if that comes into play, I think we are in a good spot to enter such a market because we are building a net forest carbon stock. We increase the forest carbon stock over time.

That is in our plan. And if such a buildup of forest carbon that is real and measurable. If that can be traded in a voluntary carbon market, that is a wonderful opportunity for the company, but we're not there yet. This is ongoing policy development. There will be a delegated act coming out on improved forest management, and that will really set the playbook for this. And I mean, the intention is to do this, of course, in balance with the harvesting. It will not really be 1 thing or another. Our hope is to be able to combine both then.

Yes. And right now, we have no plans to enter into any bilateral arrangements. That's, of course, possibly exists today globally. I think for us, it is key, and we have talked about it today that the market is created, the true logic of the market will exist and the carbon will be priced. And then this is a fantastic opportunity to combine forestry and the use of wood while at the same time, increasing the climate benefit. So that's what we are actively promoting and working towards, a functioning market.

And we are expecting the market to mature, but the question is still how that goes, but it is interesting. And this all boils down to the fact that, of course, we will take into consideration all the added value opportunities when thinking of the good of shareholders.

We have time for 1 last question, and we will take it from the webcast. Tuomas, you will take this. 1 year from now, what will you have achieved?

Bergslagets Skogar, we want that we have been succeeded in convincing the market. Of course, we want to have very satisfied shareholders and all these processes and describing this opportunity to easy way to own forest to bring this to the market. And also, of course, then as a CEO of a company, I want to be 100% sure that we deliver what we say.

Thank you all for so many great questions, both in the room and from the webcast. And if we didn't get yours, please come and grab us at the lunch. We will all be there. And please join me in a big thank you to Tuomas, Martin, Annika and Johan. Before we close, I'll hand back to Tuomas for a few final words. Over to you, Tuomas.

Thank you. So thank you very much. Thank you for your great questions because they show that you have engaged with our story. So let me bring a bit together this morning. So we heard Martin Ros telling a bit how the forest turns into final financial value. So first, 1% net annual increment, the growth of standing stock. Then return 2% ambition cash to value, very solid and strong balance sheet and stable and growing dividend policy. And then, of course, increased climate and biodiversity benefit. These are the key elements we are committed to.

And then coming back still to the 5 reasons. This is not moving now. So 5 reasons. Forest is a real asset that grows. We have the scale at the right place. And we have a know-how now combined with the newest data and tools. And also this is a machine that pays disciplined cash and more value to come. And before these forests -- these assets were 1 among many. From today, they are our strategy. So we have 1 focused company, 1 leadership team, 1 goal to make every hectare more valuable, and to earn your trust by delivering what we say. Shareholder value is the king for us. Thank you very much.

Thank you, Tuomas, and thank you all for being with us this first Capital Markets Day of Bergslagets Skogar. Now I'm delighted to hand over to the President and CEO of Stora Enso, who will give you an update on Stora Enso and the demerger, followed by a short Q&A led by Jutta. Welcome to the stage, Hans.

So ladies and gentlemen, it's really a pleasure to be here on the stage as we are now coming to an end with the first ever CMD of Bergslagets Skogar. And I was really proud to see the team here up here, and we really have a lot of trust and faith in what Bergslagets Skogar will deliver to our shareholders. So we have heard the compelling equity stories delivered by Tuomas and his team, a focused forest company with high-quality assets, a clear strategy and a strong foundation for value creation. I would like to paint a little bit the broader picture about practicalities of the demerger and then also describe how Stora Enso is further strengthening its strategic direction as a part of this demerger.

Today, we have heard what Bergslagets Skogar will be as an independent listed company. But there is more to it. Also, Stora Enso is more focused and centered on renewable materials with a special focus on packaging materials, where we have invested heavily and where we see a lot of value creation and profit potential moving forward. So we are speaking about 2 companies with distinct investment propositions. We have Bergslagets Skogar, providing direct exposure to high-quality Swedish forest assets. And we have Stora Enso building on our leading position in renewable materials with sharper focus and greater profit potential and cash generation. So 2 distinct equity stories, but the same objective, higher long-term shareholder value.

So before turning to Stora Enso, a few practicalities about the transaction. We have yesterday called to the extraordinary general meeting where you, our shareholders, can cast the vote on the demerger. This extraordinary general meeting will take place on the 15th of December. And before that, latest by the 24th of November, there will be an information brochure about the demerger also distributed. And after that vote, our plan is to move forward so that we could register the demerger at the end of March and the public trading of Bergslagets Skogar could start then in the second quarter of next year on the Stockholm Stock Exchange as well as the Helsinki Stock Exchange.

The transaction is structured as a statutory partial cross-border demerger. So there is not going to be any public offering. Stora Enso shareholders will receive shares in Bergslagets Skogar on a 1-to-1 basis within each share class. And of course, there is more details about the demerger and the details in the demerger plan documentation. So let me now turn to Stora Enso and our strategy, answering the questions of why, what and how. So first, the why. Our purpose is clear. We want to be the leader in renewable materials with a strong focus on packaging materials, renewable packaging materials, where we have invested heavily during the last few years and where we see a lot of value growth opportunities.

Then coming to the what. And here, it brings me to the business model of Stora Enso. What really matters here is that in order to be successful in renewable packaging materials, we need to have strong biomaterials and wood products. It is really the integrated model that brings us the cost efficiency and the competitiveness in the marketplace. Our business unit are integrates and our production facilities are integrates where we have renewable packaging material production, integrated pulp production as well as sawmilling. This brings us economies of scale as well as synergies in the raw material sourcing.

And in order to succeed, we focus on 4 strategic priorities. That is, first of all, to lead in customer value through quality, service and innovation. Secondly, to grow our business faster than the market, capitalizing on the strong investments into our business, on our strong asset base, on our long customer relationships, on our innovative products and our offering to our customers. Our target is to grow organically about 4% per year over the cycle. The third target is to expand our margin, to expand our margin above 10% EBIT margin over the cycle. And here, we have a very disciplined, well-developed process of value creation work that is taking place throughout our organization.

We have done this for a couple of years now, and we are getting better and better all the time. We have thousands of value creation initiatives ongoing that will take us to above a 10% EBIT margin. And then last but not least, to generate cash. Cash is king. And our target is to focus on cash generation in order to strengthen our balance sheet to take down our leverage to net debt-to-EBITDA below 1 as well as to ensure a solid, strong dividend payout to our shareholders. Sustainability is the leading star for driving demand in all our businesses, but also guiding the way how we are operating in Stora Enso.

Last but not least, we come to the third question, the how. And that is really in the center of our strategy. And it is about our positive performance culture, achieving together with our customers, with our employees, but also with our partners. Our achieving together performance culture is grounded in the 4 A's of ambition, agility, analytics and accountability. This performance culture ensures continuous improvement in our company that we are working close with our customers in the markets that we learn fast, that we take responsibility and action, that we make better decisions and that we implement with speed and determination. So all in all, to conclude, both companies have a clearer, stronger focus with distinct investment proposition for investors, shareholders. We are truly proud of the 2 companies that we are building, and we are excited about the opportunities ahead of us. Thank you.

Thank you, Hans. That was great and a wonderful morning we have had today. There is some time for questions also from Hans and Stora Enso and for the demerger. But I would actually like to invite Tuomas, you back on stage as well. And while our audience is thinking about the questions, maybe I will start with 1, Hans, in the beginning. You already mentioned it, but just to confirm, so after the demerger, the targets of Stora Enso, will they change?

No. They will remain the same. The financial targets that we communicated in our CMD in November of 2025 remain unchanged. And also the ambition that we have communicated there, we are on a good path to move towards those targets, and we will continue on that path also in the future.

Oskar Lindstrom from Danske Bank. Just a quick question. Maybe you mentioned this before, and I've missed it, but the stake that you hold in the company that acquired the 12.4% of forest lands that you sold in Sweden, that will remain with you? Or will there be a transaction whereby you will take over that I mean Bergslagets Skogar.

Yes. Thank you for the question. No, that will remain with us. So after this separation, basically, what we have as forest ownership, we have 41% in Tornator in Finland, which is a nonlisted company with forest ownership. We have that share in that 12% divestment that you mentioned in Sweden. And then we -- of course, we have eucalyptus plantations in Brazil, Uruguay and China. So that's the forest ownership that we then have after this demerger.

And if I may, just a follow-up on that. Do you see that as a strategically important piece of capital allocation for you? Or what's the long-term plan?

No, it's not a strategically important. If you are speaking about the -- when we sold the 175,000 hectares, the 12.4% and the small stake we still have there. No, that was a part of the deal, and it was more the wish of the buyers that they wanted us to have a certain shareholding in that company. So that was the reason for us remaining there as a minority shareholder.

Ephrem Ravi from Citi again. Are there any tax implications on Stora from the demerger in terms of effective tax rate? I don't know how the Swedish tax system works. And also on the financing cost because I suppose there's a lot of assets that are being kind of gone off with the demerger.

Our CFO, Niclas will take that. Yes. Come to the stage. All right.

We kind of knew that question was coming, so I'm all dressed up to talk about tax. But -- so this is a demerger and the intention from the beginning has been to make it as tax neutral as possible. So tax implications on Stora Enso, can't think about any particular tax implications. Then of course, there's various tax jurisdictions. We have shareholders in 80 different jurisdictions, and that's then a local matter, but the tax neutrality has been kind of a driving force.

And your second question, financing costs, that's maybe more to Martin and Tuomas, but we have the -- we've been working on the Bergslagets financing. It's in place. There's been a great interest there. And financing costs, again, it's for Bergslagets to handle that going forward, but they will be pretty good actually. They will actually be lower for Bergslagets than they are for Stora Enso and Stora Enso is at a good rate. So that speaks for itself.

Question was...

No, no, no. No.

Repeat.

Yes. So given that part of Stora Enso's current kind of asset base, of course, moved to Bergslagets, will Stora Enso's financing costs somehow change? And no is the short answer.

Yes. Maybe following up somewhat on the previous question, but for clarity's sake, the future Stora Enso in terms of forest integration, I'm thinking of Tornator, it's a bit of a different strategic approach. But how are you thinking around forest ownership in other contexts than Bergslagets?

Yes. So clearly, I mean, we are doing this demerger because we see that we can unlock value to our shareholders, and we can build better businesses through the strategic focus -- but it's also clear that we see that we can operate very well without having 100% ownership or ownership in the forest. Just to give an example, in Sweden, in this region, we have learned that Bergslagets Skogar is harvesting and selling wood about 3 million cubic meters. But we are, in fact, buying only in this region much more.

We are buying in total some, if I recall correctly, 18 million cubic meters of wood in total in Sweden, out of which we use a part ourselves, and then we sell to third parties the rest. So in total, in the Nordic countries, we buy some was it 34 million cubic meters, and we use about 22 million cubic meters of that ourselves. So we are very much integrated into the whole wood sourcing and optimization and also wood swap part in order to optimize the wood supply to our operations. And I think that's also important to remember here.

Paco Ruiz from BNP. Well, you mentioned all these take-or-pay contracts and the reduction of the dependency of Stora from being your main client, Bergslagets Skogar. But is there a possibility that during the time and mainly due to the synergies created during all this year, Stora continued to be the sole client of Bergslagets Skogar for more than 2, 3 years?

Well, it remains to be seen. I mean, our job is, of course, to optimize wood sourcing. Your job is to maximize the value of Bergslagets Skogar. So let's see what it will remain.

Yes, they will be freely sold when thinking of the wind-down steps and volumes, they will be freely sold to the market. So there are customers and Stora Enso is among them. And of course, thinking of the geography, for example, our forest estates are located in Central Sweden, where also Stora Enso has lots of capacity.

But I want to underline that really a guiding star for this whole demerger has been from the beginning, Bergslagets Skogar has to be an independent listed company, focusing on maximizing value for their shareholders, which, of course, in the beginning of the demerger are the same.

And like I mentioned, free to focus and also free commercial approach.

Good. So I think I will wrap it up with 1 final question. So what is the key takeaway you would want the audience here and the people on the webcast to remember after the day. And this question is actually for both of you guys. So let's start, Hans, with you.

The key message here is that we are creating 2 focused leading companies in their field.

And we want to be very clear that forest is a fantastic asset to own. It grows, it protects, it pays.

Thank you. So hey, everybody here, let's have a round of applause for Hans and Tuomas and for the whole Bergslagets Skogar team. Thank you, everybody. It's been a great day. Thank you, everybody, online as well. And with these words, I think we're -- it's time to wrap it up and head for the lunch where you can mingle with our management as well.

Thank you.

Good morning, and welcome to Stora Enso's Third Quarter 2026 Results Presentation. I am Jutta Mikkola, Head of Investor Relations. And joining me today are our President and CEO, Hans Sohlstrom; and our CFO, Niclas Rosenlew. There is quite a lot happening at Stora Enso at the moment. Alongside delivering and improving the performance of our businesses, we are preparing for one of the most significant steps in reshaping our portfolio, the planned separation of Bergslagets Skogar. So today, we will look both at how Stora Enso performed in the third quarter and at the work underway to build 2 stronger and more focused companies. Hans will start with the highlights of the quarter and the progress we are making on our strategic priorities. Niclas will then take us through the financial performance. And as usual, we will finish with Q&A.

With that, let's get started. Hans, over to you.

Thank you, and hello, everyone. And as Jutta said, there is a lot going on, and we made further progress on several fronts during the quarter. In the third quarter, we continued to make steady progress with an organic growth of 2%, supported by our own actions. AI is increasingly helping us accelerate our value creation programs and identify further opportunities to improve performance. Despite high planned annual maintenance activity as well as higher costs related to the conflict in Iran, we delivered an adjusted EBIT margin above 7%.

This is further evidence that our strategic priorities and portfolio optimization are gradually strengthening the quality and resilience of our earnings and cash flow. And this brings me to another important step in our transformation. We have now formally decided to proceed with the planned separation. In just a few days, we will host the very first Capital Market Day of Bergslagets Skogar. Over the past year, significant effort has gone into preparing Bergslagets Skogar for life as an independent company.

At the CMD, we are presenting Bergslagets Skogar's financials and showcase a business with a unique asset base, a strong foundation and long-term value creation potential. The separation will unlock value and sharpen the strategic focus of both companies. And when talking about focus, we also continued to actively reshape our portfolio in line with our strategic priorities. We divested our packaging solution units in Germany, consolidated sawmilling in the Oulu region and closed the CLT unit at Gruvon, enabling us to concentrate production in our remaining CLT units in the Czech Republic and Austria.

We also announced plans to centralize our packaging solution operations in Finland and reduced our ownership in a Swedish wood supply company. All of these actions follow the same logic, creating a more focused company and directing our resources towards areas where we see the strongest potential for long-term value creation. We are also continuing to develop further growth opportunities. This week, we announced a partnership with Shanshan Technology, one of the world's largest suppliers of battery anode materials.

The partnership accelerates the development of Lignode, our wood-based sustainable battery material and its industrial scale validation through a demonstration line for lignin-based anode materials. It also supports our long-term ambition to establish large-scale Lignode production in Europe. This is a good example of how our renewable materials expertise can create new high-value growth opportunities over time.

One of our key strategic priorities is to expand margins through business focus, a positive performance culture and systematic value creation. This has been a core priority throughout the last 2 years and continues to be so going forward. We have identified EUR 500 million to EUR 700 million of value creation initiatives. These initiatives have clear ownership and are already underway. Year-to-date, our own actions continue to improve performance at a steady pace and will continue to do so. At the same time, market impacts remained mixed.

Lower wood costs were supportive, but this was partly offset by ongoing war-related pressure on energy, logistics and chemicals, subdued consumer confidence, lower EU ETS allowances and unfavorable foreign exchange movements. All continued to improve year-on-year. The key message is that the fundamentals of our margin expansion story remains intact. We are not standing still, and we are not waiting for market conditions to improve. We continue to drive performance through our own actions. And AI plays an important role in that. AI is increasingly becoming part of how we execute our value creation program and identify further opportunities. All our employees currently have access to at least 3 AI capabilities, including our internal Agentic AI library. AI is integrated into our performance culture and systematic value creation work. We focus on AI value that is measurable business impact as the main KPI for AI. Today, targeted AI capabilities support around 1/4 of our initiatives, particularly across commercial processes, operations and ways of working, and we expect its role to increase over time.

In practice, this range from enterprise AI tools supporting everyday work to our own AI applications and solutions embedded in specific workflows and core business processes. For example, in sales, AI-powered negotiation support brings together customer, market and internal data, helping our teams prepare faster, make better informed decisions and improve commercial outcomes. In operations, predictive AI helps us identify potential equipment issues earlier and reduced unplanned downtime.

With that, I will hand over to Niclas to take you through the financial performance. Niclas, please.

Thank you, Hans, and hello, everyone. Before going further into the third quarter financial performance, I wanted to start with a few comments about the Bergslagets Skogar separation and the impacts on Stora Enso. As you know, we have today made several releases on top of the Q3 interim report release. As part of the demerger release, we have, for the first time, shared the Bergslagets Skogar financials. This is another big step towards the planned demerger, and you can now see how Europe's biggest pure-play forest business looks like.

More to be shared in the CMD next week. So let me now take you through a few points on what the demerger means for Stora Enso after the separation. This slide illustrates the impact on our sales, earnings profile and balance sheet following the demerger of Bergslagets Skogar. First, the impact on reported sales is expected to be limited. Bergslagets Skogar sales have historically been largely internal within the Stora Enso Group.

Second, on an illustrative basis, excluding Bergslagets Skogar, our last 12 months adjusted EBIT would have been around EUR 400 million compared with EUR 580 million for the group. This corresponds to an impact under EUR 200 million on our current EBIT margin. However, good to note that adjusted EBIT includes the operational fair value changes in biological assets, which affect adjusted EBIT but are noncash. In other words, the cash impact will be less.

And third, the balance sheet. Around EUR 800 million net debt is expected to be transferred to Bergslagets Skogar at the completion date. This will reduce Stora Enso's absolute net debt and align the capital structure with the size and needs of the remaining business. So while the demerger reduces absolute earnings, it also creates a more focused Stora Enso with a clearer financial profile and the balance sheet aligned with the business. This is a good basis for continuing to strengthen Stora Enso.

Now let's look into the Q3 results in more detail. I am pleased with the continued progress of all our businesses and the improved earnings resilience. During the quarter, we continued to focus on our own improvement actions across the company. Organic sales increased 2%, driven by higher deliveries in both Consumer and Integrated Packaging and higher prices in Integrated Packaging and Biomaterials.

Reported sales decreased by 2% due to the portfolio optimization, the divestments that Hans mentioned earlier. The divestments included the corrugated board units in Germany and a partial disposal of our share in a wood supply company. We, therefore, now account for the wood supply company as an associated company instead of a subsidiary. The divestments reduced sales but had a limited impact on EBIT. Our adjusted EBIT was EUR 161 million, which was a year-on-year increase of 28% or EUR 35 million.

So let's now turn to the next slide for some additional details. So on the EBIT bridge, you can see the improved resilience that I mentioned earlier. Adjusted EBIT improved by EUR 35 million year-on-year despite continued external pressure. Higher volumes were the biggest positive driver, contributing EUR 31 million, mainly from Consumer Packaging and Integrated Packaging despite -- and this was despite the planned maintenance shutdowns that we had in Integrated Packaging. Price and mix had a EUR 12 million negative impact as higher prices in Integrated Packaging and Biomaterials were offset by lower external wood sales prices in Sweden. Variable costs improved by EUR 40 million. Lower wood costs and our own cost actions more than offset the cost escalation related to the Iran conflict, especially for energy, logistics and chemicals. And importantly, our own actions also more than compensated for fixed cost inflation. So quarter after quarter, we are making steady progress. We remain focused on what we can influence ourselves, and that work is increasingly visible in our results.

Let's now move on to cash flow. Cash generation remains a strategic priority. Cash flow from operations increased to EUR 245 million and cash flow after investing activities improved to EUR 132 million compared with EUR 57 million last year. This improvement reflects stronger cash flow from operations and lower cash spending on the capital -- on capital expenditure. Due to disciplined capital allocation throughout this year, we have also lowered our full year '26 capital expenditure estimate from EUR 550 million to EUR 500 million. Overall, the underlying development remains aligned with our priorities. We are reducing CapEx. We are improving the quality of the portfolio and maintaining capital discipline.

This is also visible in our balance sheet. The positive cash flow in the third quarter reduced net debt further. Net debt decreased by EUR 85 million to EUR 2.5 billion and net debt to adjusted EBITDA improved to 2.1x. The stronger capital structure provides flexibility to execute our long-term strategy and supports the preparations for the planned separation of Bergslagets Skogar. Going forward, we'll continue to focus on deleveraging, supported by profitability improvement, cash generation and disciplined capital allocation.

So let me now conclude the financial review with the segment performance overview. What comes to sales, we grew organically in all operational segments. In Consumer Packaging, EBIT increased by EUR 26 million. The improvement -- the improved performance was supported by higher board volumes, lower wood costs and our own cost-saving actions. This was partly offset by cost increases related to the Iran conflict, particularly in logistics and chemicals. Looking ahead, the Consumer Packaging fourth quarter will be impacted by significant planned annual maintenance shutdowns.

This will result in higher costs and lower volumes. As the maintenance will affect, in particular, our liquid packaging board production, we also expect an adverse price/mix impact. Also in Integrated Packaging, the EBIT increased by EUR 25 million. The underlying profitability remains solid despite significant annual maintenance shutdowns at several sites. The improved containerboard pricing and successful post-maintenance ramp-ups supported the performance. Higher variable costs driven by increased costs related to the Iran conflict were offset by good fixed cost control. Furthermore, Biomaterials continued to demonstrate strong competitiveness with solid margins despite the challenging operating environment. Adjusted EBIT was EUR 52 million, corresponding to a margin of 14%. Higher eucalyptus pulp prices and good cost control supported the performance.

In the Other segment, sales declined mainly due to the disposal of the share in the wood supply company as we no longer consolidate its sales. However, the disposal has no material impact on our operating profit. The adjusted EBIT in segment Other was EUR 30 million. The decline was mainly due to lower prices for external good sales in Sweden and lower margins in the energy function. The Energy business was negatively impacted by the annual maintenance at the Olkiluoto 3 nuclear plant and lower electricity prices.

So with that, I hand back to you, Hans, for the key takeaways.

Thank you, Niclas. Let me now summarize the key takeaways and our focus for the rest of the year. I am encouraged by the progress we are making, both in our performance and in advancing our strategy. We have many exciting and important steps ahead with the Bergslagets Skogar Capital Markets Day being the next one. While market conditions remain challenging, we remain firmly focused on what we can control. We continue to drive performance through our own actions across operations, cost commercial excellence and procurement and more and more with the help of AI.

These actions are strengthening our competitiveness and positioning us well for the future. We are making good progress, but we also know there is more work ahead. We will continue to execute with focus and determination. And I would like to thank our shareholders, customers and other stakeholders for their trust they place in us. Most importantly, I want to thank our employees for their continued commitment, hard work and determination. Together, we are actively shaping our future and building a stronger, more focused and more sustainable Stora Enso.

Thank you for listening, and we are now ready to take your questions.

[Operator Instructions] Our first question comes from Gabriel Simoes at Goldman Sachs.

So the first one would be on the forestry side. So I know we should have more details on the forestry in the CMD next week, but I just wanted to confirm a few things on the free cash flow calculation for the number you announced today. So I wanted to confirm whether this cash flow doesn't include the interest on the debt and the tax to be paid. And if you could confirm how much you're considering for CapEx and if that's mostly maintenance, that would be great.

The second question that I have is actually on the Consumer Board division. So we started to see some players announcing price hikes on boxboard recently. So I just wanted to understand whether this is something you're following and how you're seeing the situation on this market currently given that this was an oversupplied market up until currently, until very recently, at least? And I just wanted to understand whether the situation has improved on the demand front or if you're seeing further announcements on closures.

Yes. Gabriel, Niclas here. So on the first one, if you don't mind, let's come back to that in the CMD next week, just to clarify, so I don't say anything, which is completely off here.

Yes. And Gabriel, also from my side. So on the second question about board price hikes. So yes, we have seen in containerboard several price increases throughout this year. In Consumer Board, we have also announced recently price increases. The market situation in consumer board is not as tight as strong as in containerboard. And then when it comes to closures, you're right, there has been a lot of capacity closures taking place. In fact, if you look at the years 2024, '25 and year-to-date 2026, there is a total 750,000 tonnes of cartonboard capacity, which has been taken out from the European market.

Our next question comes from the line of Linus Larsson at SEB.

First question, maybe on the cost outlook, and you did illustrate how variable costs have developed year-on-year. Could you please also share with us how variable costs developed quarter-on-quarter in the third quarter? And maybe if you could add a little bit of detail on how you see variable cost development into the fourth quarter, please?

Yes. Linus -- so, yes. So if we take a step back, so the variable cost, we had a tailwind. Of course, it's a combination of 2 things. I mean, we had the wood prices. And then on the other hand, actually 3 things. So wood costs, we have the Iran-related cost increases, and then we have our own actions. And it's the mix of those. And of course, Iran moving in the wrong direction. Wood costs were kind of a tailwind in Q3 and then the own actions continue.

Again, don't want to be too specific about Q3 or Q4 going into Q4. But on wood costs, I would not assume that they continue to go down a lot. Maybe even the contrary, but let's see. The own actions, of course, we continue and the Iran cost increases are there. So of course, as we know, every day is a new day, so it's a bit hard to say, but don't see any significant kind of easing at least now going into Q4. Hopefully, that's at least some sort of an answer.

And then maybe in light of the cost environment that we're in and maybe especially your Continental European competition, could you share with us how you see potential prospects for market share gains or price gains for that matter? And I'm talking about consumer packaging in particular, but also maybe if you're willing to say something about Oulu, any possibilities, prospects, opportunities for market share gains overseas or in Europe? And also, like I said, what's costs and pricing in this kind of environment?

So yes, we continue to grow faster than the market. So we gained market shares continuously in consumer board, both in Europe and also in North America. And in the same thing also in fresh containerboard, so kraftliner, where the market situation right now is quite good actually. So that offers growth opportunities. So we had an organic growth of 2% in the quarter year-on-year. Our target is 4% per year, and we are determined to continue growing faster than the market. And we have a very strong competitive asset base for that. We have invested heavily during the last few years. So we have a very competitive asset base, huge mill integrates and now it's time to harvest.

Maybe just to add to what Hans was saying. I mean this is, I'm sure obvious to you. But when we talk about the cost headwinds hitting the market related to the Iran conflict, for us, it's really logistics and chemicals where we see it. But of course, for the industry as a large, also energy is a big headwind. For us, energy is not a major headwind as we are pretty much self-sufficient. So in that sense, it's -- if you can say, so a good thing from a competitiveness perspective.

Our next question comes from Andrew Jones at UBS.

So yes, I just wanted to ask about the Lignode business. And a few years ago, it was a bit of a concern that it would result in a decent boost in CapEx. I mean what does this actually mean practically? I mean what are your expectations for this business over the next few years? I mean your work is successful, I mean when do you expect to actually start developing an industrial scale project? And can you give us an idea basically how you're thinking about that and how imminent any large spending might be?

Yes. So thank you for your question, Andrew. So I mean, we have continued, of course, actively to develop the whole Lignode business. We have since years a pilot manufacturing unit in place. We have been collaborating with all the world's largest battery manufacturers and also anode material manufacturers. Now this week, we announced the partnership with Shanshan who is the world's second largest anode material manufacturer with a global market share of about 14%. They are a leading one.

And together with this -- with them and with this partnership, we can accelerate now the demonstration phase of Lignode. So we need to demonstrate to build up a true process, which is about 100x larger than the pilot scale as a precondition then for potential investment into the first commercial scale unit. And the big advantage here through this partnership is that we can accelerate the development. Shanshan has a lot of knowledge in anode materials, which we can benefit from and build on. And of course, we are saving a big capital expenditure by using the equipment and the processes that the Shanshan has already made in order to now do the demonstration phase of Lignode.

Now having said that, I want to underline that building a significant business out of wood-based anode materials, our Lignode is a longer-term development. So it's longer out in the future. We need now to have successful demonstration scale operations and develop further the manufacturing process. But if we speak about anode materials today, we are speaking about the market, which is tens of billions of euros of size. So it is a significant opportunity, but really long term in the future.

Yes. And just, Andrew, to add on the CapEx point to what Hans was saying, again, this is not -- what we announced now is not any significant CapEx. And rest assured, I mean, capital allocation, managing CapEx is a key priority, something we look into all the time. And you might have seen that we took down the guidance for the year when it comes to CapEx from EUR 550 million to EUR 500 million, and it won't stop this year. So we keep a tight niche and make sure that we invest in stuff which gives good returns. And Lignode won't pop up on the radar anytime soon as any big CapEx.

And just a follow-up, and does Shanshan have any real experience dealing with anode materials from wood-based byproducts? I mean is this a first for them? Or is this something that they've had experience with somewhere else in the world?

No, this is the first experience they will gain through the collaboration with us.

Our next question will come from Detlef Winckelmann at JPMorgan.

Maybe my first one is just on Oulu. If I take a look over the last, let's say, 4 quarters, it looks like we've kind of landed in the negative EBIT range of minus 15% to minus 30% pretty much repeatedly, and it looks like we're going through the same in Q4. Should I be reading that as kind of the ramp-up benefits gained operational leverages being offset by price cost? And then we have to see how we go from here in terms of price cost? And then my second question, if you don't mind, is just on this CapEx. Obviously, you brought it down by about EUR 50 million. Just curious if any of that EUR 50 million is going to show up next year or if this is permanently canceled, i.e., just timing or strategically made decision there?

So regarding Oulu, we are improving quarter-on-quarter in terms of financial performance, and we will continue to do so, and we stick to our earlier guidance that we have the ramp-up completed during next year. Of course, we are focusing on the sustainable product customer mix that also will ensure the long-term profitability for the line. So we are continuing to work on the commercial ramp-up with focus on profitability. And if you take the CapEx. On the CapEx, no, this is not a shift. This is managing CapEx as part of capital allocation. And you can imagine that within this EUR 500 million, we have a long, long, long kind of a stream of typically smaller items. So it's just managing within that bucket and therefore, now taking down from EUR 500 million to EUR 550 million. Of course, we haven't given any guidance on next year and not talk too much about CapEx next year, but we'll continue to keep a tight this year.

Okay. And then if I can squeeze in one more just in terms of -- and it's a technical question, just regarding your forest assets in Sweden. Normally, tax rates for this kind of asset, are we just thinking normal corporate tax rates? Or are there any relief benefits or refunds or anything like that we should be thinking about for having a forest asset? I'm not an expert in that at all.

Yes. Again, let's talk more next week in the CMD. But to my understanding, it's normal, whatever that means, but normal. So it's not it's not the kind of REIT structure like we have or what you might have in the U.S., for instance.

Our next question comes from Cole Hathorn at Jefferies.

I'd like to start with forest. I mean, I understand we got the CMD coming up on the third, but some color would be helpful here because you sold EUR 1 billion of forest a year ago closer to book value, but a year ago is a long time in the current world. I'm just wondering, as we go into the forest spin, is there any plans or thoughts to dispose even a small amount, be it EUR 100 million, EUR 150 million, EUR 200 million closer to book value just to demonstrate a proof point to the market that you can actually sell a decent size of forest closer to book?

And then the second one is following up on the free cash flow for -- to the forest entity, you've given some disclosure today, roughly EUR 90 million of free cash flow. But I'm just wondering what you didn't give in the release is a defined target of where this could ultimately go to. Could you give us a little bit of a preview for the Capital Markets Day of some of the actions that might be taken to improve that free cash flow to get towards the greater than 2% free cash flow yield?

So first, yes, you are right. We sold 12.4% of our Swedish forest assets last year, a very representative actually part of our -- of Bergslagets Skogar and yes, we sold it at exactly book value, so enterprise value, EUR 900 million for the 12.4% and -- but in addition to this, I mean, we are all the time doing smaller like sale of forest land and some swaps and also some acquisitions to optimize and increase the value of our forest holding. And we can see that, in fact, the book value is a very good indicator for the true value of the forest asset that we have.

Yes. And then maybe on the cash flow and the kind of forward-looking, what's the potential. Again, that's a key theme actually next week, so I won't steal the thunder from next week. But of course, it's kind of one of the core ideas with the whole transaction that we kind of unleash the potential of this company. So what you kind of got now, and I'm sure you haven't had too much time to look at it, is kind of a first glimpse on the history and -- but not necessarily a kind of a full download on what this can be in the future. And of course, the idea -- the whole idea is to strengthen the business and continue to develop it. But again, I don't want to steal the thunder. So let's be a bit patient and come back early next week.

That's fair enough. I mean maybe just following up, Hans, on the first point is, I mean, you saw the previous forest, but is there any view to sell a little bit more? And the reason I ask that is it allows the new spin forest entity to have a bit of cash for the forest that they sell. And if the discount to book value where it starts trading gets too large, maybe they can deploy it within their own share buybacks to make sure that the share price kind of reflects what you think the forest valuation is. Is there anything like that or kind of flexibility for the new entity to have the cash to do buybacks should they need to? Or is that something we're still going to have to wait for next week?

We don't have any plans now to do any further major divestments of forest land within the Bergslagets Skogar perimeter before the demerger. We think that the big deal that we concluded last year is a very relevant, valid benchmark in a way for the true value of the forest land, and we are happy that we could confirm also the book value of this huge asset. And -- but then, of course, for the longer term, Bergslagets Skogar has in their toolbox, they have the possibility also to either divest forest land or buy forest land or swap forest land. And there one way of value creation is, of course, to constantly improve the value of their forest holding. And of course, they will have the same objective as we have to maximize shareholder value.

And then just on containerboard on the underlying sort of business for integrated packaging, with gas prices up at EUR 100 TTF, I mean, we've almost crossed the Rubicon now where cost pressure might incentivize a further recycled containerboard price increase. Can you give us any comments of how you're thinking about pricing for your Poland, Ostro??ka Mill and how higher prices -- or further price increases might benefit you for your virgin containerboard business in integrated packaging?

Yes, Cole, during this year, we have executed several price increases in containerboard, especially in kraftliner, but also in testliner. And yes, I mean, we are 74% energy self-sufficient, Stora Enso as an average. And coal is representing less than -- sorry, oil is representing less than 1% of our energy and natural gas less than 2% of our energy. So we have a strong competitive situation in general compared to many Central European, American and Asian competitors, thanks to energy self-sufficiency and a very small, almost negligible impact of oil and gas in our energy basket. The main impacts from the conflict in Iran and the high energy costs comes through higher logistic costs and some higher chemical costs.

Our next question comes from Joni Sandvall at Nordea.

A couple of questions from my side. First of all, still coming back on Oulu. Could you give any indication how the qualification processes have developed? And any surprises here? And additionally, any indication of the geographical, say, split of sales from Oulu currently?

So thank you for the question. So I mean, the technical and the quality performance of Oulu has been good already for a long time. And we have been very active, of course, in the marketplace doing trial runs and tests. We have also introduced new products to the market. We have expanded, for instance, the product range, the basis weight range. And the feedback from customers has been really positive. So we have a very competitive, good, high-quality assets here. And we can, through Oulu also offer several yield advantages to our customers compared with the existing products in the market. So the products have been very well received by our customers. And we continue with our work to fill the line and ramp up the line.

And secondly, still coming back on the Ostro??ka following the clear increase in European gas prices. Could you give any indication? Are you still profitable in Ostro??ka currently?

Yes, we are.

Our final question today comes from Martin Melbye at ABG.

Two questions about 2027. What do you foresee on the liquid packaging board pricing and the upcoming negotiations? And how much of your portfolio is up for renegotiation? And the second question is on maintenance. So this year it lands at EUR 380 million, if I'm not mistaken, which seems to be a pretty low number compared to the history. How will that number progress into '27, please?

Yes. Thank you, Martin, for the question. We don't guide and give any forward-looking statements here on the pricing. What I want to say is that we are the world's largest and leading liquid packaging board producer. We have high-quality assets in -- production assets in 3 countries. We are serving the most -- the leading and the most demanding liquid packaging board customers. And we have really strong positions, both in terms of customer relationships as well as also in terms of product quality and service as well as asset cost competitiveness. So we will continue to be leaders in this field also in the future.

I can comment on the maintenance. It's a favorite topic, Martin. The -- again, it goes into the same basket of capital allocation and managing it. Also, the maintenance is part of that. So we have been -- the teams have been doing a lot of work on how to run efficient maintenances and also from a cost perspective, how to manage the cost tightly there. So I would say that no difference there, whether it's kind of maintenance, keeping the current assets in great shape or then putting in new assets. It's the same theme throughout, and we'll continue to do that also in the future.

Maintenance just to when -- as this is the last question, I just want to highlight that we have big maintenance kind of coming up or actually ongoing in Q4 with -- especially now in Q4, it's our consumer sites, which are under maintenance. So for instance, Imatra, Skoghall are both in maintenance in Q4, which, of course, then will have an impact on the Q4 performance.

There are no further questions. I shall now hand back to CEO, Hans Sohlstrom; and CFO, Niclas Rosenlew, for closing remarks.

Thank you very much all for joining in and for your interest. And I think it's clear. I mean we do whatever it takes to maximize shareholder value. We continue our work to systematically diligently with determination to improve the performance, the profitability of our business, but we are also working on the structures of our company. And here, the Bergslagets Skogar separation is a great example. We are certain that this is unlocking value. This is creating shareholder value, and this is creating 2 leading companies in their field. Europe's leading pure stock-listed forest company as well as also the renewable materials company with a strong focus and growth opportunities in packaging. So thank you very much for your attention, and have a good day.

Hello, everyone. My name is Jutta Mikkola, and as Head of Investor Relations at Stora Enso, I'm pleased to welcome in the middle of the summer to our second quarter results presentation. I'm happy to have Hans Sohlstrom, our President and CEO; and Niclas Rosenlew, our CFO, with me here today. This quarter, our main theme was optimizing our portfolio and driving results through our own actions that captures well the progress we have made, both in executing our strategy and optimizing our portfolio.

Today, we will follow our usual agenda, starting with strategy updates, followed by a financial review and concluding with the key takeaways. After the presentation, we will be happy to take your questions. Thank you for joining us. Hans, the floor is yours.

Thank you, Jutta, and hello, everyone. Great to have you with us. The second quarter marked another period of disciplined execution in a volatile market environment. We improved operational performance, strengthened customer relationships and advanced several important strategic initiatives. Our profitability improved compared to last year. Sales were stable, and adjusted EBIT increased by 27% to EUR 160 million. This reflects continued operational improvement, progress in Oulu and disciplined cost management. I'm particularly pleased with the progress in Consumer Packaging, where operational performance strengthened further and customer feedback continues to be very encouraging.

We continue to receive positive feedback on both product quality and service, reflecting the dedication of our teams, strength of our customer offering and our significant investments in leading technologies. Creating customer value remains at the heart of our strategy, and it is encouraging to see this translating into stronger customer relationships and faster than the market growth.

During the quarter, we also continued to optimize our portfolio. We announced an investment to strengthen our position in fluff pulp at Skutskar, while at the same time, deciding to close a less competitive production line at the site. Preparations for the separation of Bergslagets Skogar also progressed as planned. The strategy is defined. The organization is in place and execution is firmly on track.

In Oulu, the ramp-up of the new consumer board line continued to progress. Production stability, technical runability and operational efficiency improved further during the quarter. While the ramp-up continues to affect short-term profitability, the overall development is positive.

Overall, this quarter again demonstrated that we are not relying on market conditions to improve our performance. We continue to drive profitability through our own actions, operational and commercial excellence and systematic value creation. Our strategic priorities remain unchanged. We lead in customer value creation through innovation, quality and sustainability. We grow faster than the market with a superior customer offering, leading technology and operational efficiency. We expand margins through business focus, a positive performance culture and systematic value creation. And we generate cash with a high conversion ratio and disciplined capital allocation. These priorities guide our actions across the business. They are also closely linked to how we are developing the portfolio, improving performance and building a stronger, more focused Stora Enso.

Portfolio optimization is an important part of our value creation agenda. It is not a one-off action. It is a disciplined and continuous lever to sharpen business focus, strengthen competitiveness and allocate capital where we see the best long-term opportunities. Over the past years, we have taken several concrete steps. We have closed or exited noncore or low-return assets, divested part of our Swedish forest holdings, acquired Junnikkala sawmills to support Oulu's cost competitiveness and continued the ramp-up of Oulu.

In 2026, we announced further actions. At Skutskar, we decided to invest in fluff pulp capacity and close the softwood pulp line. This strengthened our position in specialized pulp and improves the long-term competitiveness of the site. We are also divesting the corrugated board production site in Germany as part of our corrugated asset base optimization. At the same time, the strategic review of our Central European sawmills continue. And looking ahead, the planned separation of Bergslagets Skogar remains a key step in unlocking value and enhancing strategic focus for both companies.

The common theme across these actions is clear. We are building a more focused portfolio, improving capital allocation and strengthening the foundation for long-term value creation. One of our key strategic priorities is to expand margins through business focus, a positive performance culture and systematic value creation. This has been a core priority through last 2 years and continues to be so going forward. We have identified EUR 500 million to EUR 700 million of value creation initiatives. These initiatives have clear ownership and are already underway.

In the first half of 2026, our own actions continued to contribute positively. At the same time, market impacts remained mixed. Lower pulpwood costs supported the development. However, sawlog costs have remained high or even increased. We also continued to face unfavorable foreign exchange rate impacts, pressure on price and demand as well as war-related impacts on energy, logistics and chemicals.

In addition, due to changes in the EU ETS rules, we have lost over EUR 50 million of free CO2 allowance allocations from this year onward. As several of our mills' emissions are now more than 95% biogenic, demonstrating the success of long-term emission reduction initiatives, we are being punished for being a forerunner in reducing emissions. The Oulu ramp-up continued to affect profitability. The impact was at the same level as in Q1, while operational progress continued. The key message is that the fundamentals of our margin expansion story remain intact. We are not standing still, and we are not waiting for market conditions to improve. We continue to drive performance through our own actions.

Let me now highlight 3 concrete examples of how innovation supports one of our strategic priorities, leading in customer value through innovation, quality and sustainability. The first example is circularity. In May, Stora Enso published its circularity plan, aligned with the first version of the global circularity protocol for business. We also set a new target to reach 90% material circularity in our direct operations by 2030. For customers, this brings clarity and credibility. Circularity is becoming increasingly important, but common frameworks are still developing.

By moving early, we are helping to create a more consistent and transparent basis for measuring progress, while also supporting our customers' own sustainability ambitions. This is also about competitiveness. Circularity brings together design, operational efficiency and value chain collaboration. It means using resources more efficiently, minimizing waste and helping customers move towards renewable packaging solutions designed for circular systems.

The second example is Oulu. Our Oulu business unit now hosts Finland's first pulp mill to achieve FSSC 22000 food safety certification. Since May 2026, the certification covers the full production chain of Oulu from pulp production to board machines, sheeting and the portal terminal. For customers, this means added assurance, process are audited, risk management is systematic and the materials are sustainable for direct food contact. This matters, especially in food packaging where quality, safety and reliability are critical.

The third example here is Performa Natura Aqua. In food service and bakery packaging, customers need grease resistance, stiffness, converting performance and a high-quality printing surface. Performa Natura Aqua combines these requirements in one dispersion-coated folding boxboard. The customer value is practical and immediate. The integrated barrier supports grease resistance without additional processing steps while the board structure supports stiffness, stable runability and reliable production protection. Together, these examples show that we are not innovating for innovation's sake. We are creating measurable customer value, helping customers meet sustainability expectations, enter growing packaging segments and rely on safe, high-performing renewable materials.

With that, I will hand over to Niclas to take you through the financials.

Thank you, Hans, and hello, everyone. Let's now take a look at the financial performance for the second quarter.

During the second quarter, sales were stable at EUR 2.4 billion. Higher sales from the Oulu ramp-up and the Junnikkala acquisition were largely offset by lower prices and adverse currency movements. Adjusted EBIT increased by 27% to EUR 160 million. Profitability improved as a result of disciplined owned actions and progress in the Oulu ramp-up. Volumes were higher, particularly in Consumer Packaging, which helped to partially offset weaker external sales prices for wood in Sweden and negative foreign exchange impacts.

Overall, the quarter shows that our own actions continued to support performance in a challenging market environment. This can be seen more clearly when looking at the EBIT bridge. So looking at the EBIT bridge, the main message is that progress with our own actions and in Oulu more than compensated for the negative market impacts. Price and mix was negative during the quarter. This was largely driven by lower external wood sales prices in Sweden and pricing across our industrial businesses was otherwise broadly stable.

While wood prices had a negative impact on price and mix, it had a positive impact on variable costs. The reason is simple. In Sweden, we both sell wood externally and procure wood for our own operations. Wood prices in Sweden declined following the late December storm Johannes. The storm resulted in a significant volume of storm damaged timber entering the market. As this timber needs to be harvested and transported relatively quickly, supply increased and prices came under temporary pressure. We have seen similar dynamics following previous storms and historically, prices have normalized once the excess volume have been absorbed by the market. Volumes were higher, particularly in Consumer Packaging, where, as Hans mentioned, operational performance continued to improve and customer feedback continued to be encouraging.

We also continue to benefit from operational improvements and own actions across the business. These helped offset increased pressure from higher logistics, energy and chemical costs related to the conflict in the Middle East. Foreign exchange was again a headwind with the weaker dollar reducing sales and currency movements increasing cost pressure in some areas. The positive development during the quarter was also supported by progress in Oulu, which is visible in the other category of the bridge, together with contribution from our own actions across the business. The bridge clearly shows that we continue to improve performance through actions we can control even though the external environment remains challenging.

Let's then look more closely at wood cost development. And let me spend a minute on this as there are a few important points to keep in mind. First, pulpwood costs have come down from the exceptionally high levels we saw over the last few years. Clearly, that is positive for our wood-intensive business and supports profitability. However, the impact on our total wood costs is not one-on-one. While pulpwood prices have declined, sawlog costs have remained high and in some cases, continue to increase, particularly for sawmills.

On this slide, we show the development for both pulpwood and sawlogs across Finland, Sweden and Central Europe. As you can see, pulpwood cost levels for us have come down, especially in Sweden, but the benefit is, to a large extent, offset by higher sawlog costs. As a result, the impact on our total wood cost base is more modest than the pulpwood price development alone would suggest. Second, there is always a timing effect. Changes in market wood prices are reflected in our mill wood costs with a delay as the wood we consume today has often been purchased some time ago. This means the benefit from lower market prices flows through gradually rather than immediately.

Third, it is important to understand the difference between public wood price statistics and our actual delivered wood costs. Market statistics typically reflect stumpage or roadside prices depending on the region, and our delivered mill gate costs also include harvesting, logistics and mix effects. Logistics costs, in particular, have been under pressure during the year following the conflict in the Middle East. So while lower pulpwood prices are clearly supportive, some of that benefit is offset by higher transportation and sourcing-related costs.

So in summary, the direction in pulpwood is positive, but the full benefit takes time to come through and is partially offset by higher sawlog costs and other wood cost components. So with that, let's move on to cash flow. Cash flow remained cash flow remains and remained an important strategic priority for us.

In the second quarter, lower capital expenditure supported cash flows after investing activities. This is in line with our plan to reduce CapEx after a period of significant investments. Cash flow from operations was lower than last year. This was due to an increase in working capital. We had a higher trade receivable or higher trade receivables as a result of stronger consumer packaging sales. And we also had lower payables, and these were partially offset by a reduction in inventories.

Overall, the development remains aligned with our priorities. We are reducing CapEx, improving the quality of the portfolio and maintaining a capital discipline. This is also visible in our balance sheet development. Net debt decreased clearly during the second quarter following the EUR 1 billion hybrid issuance. The hybrid strengthens our capital structure and increases financial flexibility. It is treated as equity under IFRS and partly by the rating agencies. So it supports our credit metrics and helps protect our investment-grade profile. This was an important step in supporting our long-term strategy and the preparations for the planned separation of Bergslagets Skogar. Net debt to adjusted EBITDA also improved to around 2.2x.

Going forward, our deleveraging path will be supported by structural execution, profitability improvement and disciplined capital allocation. Let's then have a look at how our segments performed. This is the second quarter when we report based on the new segment structure. As I said earlier, the structure reflects the P&L responsibilities and how value is created across the group.

Let's start with Consumer Packaging. Sales increased during the quarter, mainly driven by the ramp-up of the new consumer board line in Oulu and Junnikkala acquisition. Adjusted EBIT increased by EUR 42 million, and this was a result of good operational performance, higher volumes and lower variable costs. As Hans mentioned earlier, we continue to see encouraging customer feedback and a positive response to both our product quality and customer offering.

Another contributor to the increase was the continued progress in Oulu. While Oulu still had a significant impact on profitability in absolute terms, in line with the first quarter, the year-on-year improvement was clear and reflects the progress we have made. Order inflow remained healthy during the quarter. At the same time, demand for European consumer board grades continued to be somewhat mixed, reflecting the broader market environment.

Then moving on to Integrated Packaging. Sales decreased mainly due to lower corrugated packaging volumes in Western Europe. The underlying business performance remained relatively stable. However, profitability was negatively affected by lower emission and energy-related subsidies compared to last year. Excluding this effect, the performance of the business was broadly stable. Lower fiber costs and good cost discipline helped offset the negative impacts. Demand for virgin containerboard continued to improve, supported by announced price increases.

Then moving on to Biomaterials. Sales increased slightly as higher deliveries were only partly offset by negative foreign exchange effects. Adjusted EBIT increased by EUR 23 million, mainly due to lower wood and fixed costs. Fixed costs were also supported by lower maintenance activity. Softwood market remains weak, while hardwood and fluff pulp markets are more stable with prices recovering sequentially, albeit still at low levels.

In the Other segment, sales and profitability decreased mainly due to lower external wood sales prices in Sweden, reflecting the same market impact from Storm Johannes that I discussed earlier. The external wood sales are part of BU Wood and Energy, so in other category. In addition, profitability in the Central European wood products was affected by continued increases in sawlog costs, which put pressure on margins. So with that, I'll hand back to you, Hans, for the key takeaways.

Thank you, Niclas. Let me now summarize the key takeaways and our focus for the second half of 2026. As said, the second quarter marked another period of disciplined execution in a volatile market environment. While market conditions remain challenging, we continue to drive performance through our own actions across operations, costs, commercial excellence and procurement. Our strategic priorities remain unchanged: lead in customer value creation through innovation, quality and sustainability, grow faster than the market with superior customer offering, leading technology and operational efficiency, expand margin through business focus, a positive performance culture and systematic value creation, generate cash with high conversion ratio and disciplined capital allocation.

We continue to strengthen our competitiveness and ability to deliver consistent performance regardless of external market volatility. I would like to thank our employees, customers, partners and shareholders for their continued trust. Together, we are building a stronger, more focused and more sustainable Stora Enso. Thank you for listening, and we are now ready to take your questions.

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

Two questions from my side. I'll take them one at a time. First, looking at the Oulu mill, can you give us a sense of the operating rate in the second quarter and whether you anticipate to fully ramp-up in early '27 or that's more of a late 2027 time frame? And related to that, what was the EBIT impact in Q2? And also if you can quantify the EBITDA impact just to get a better sense on something closer to a cash flow metric?

Yes. Hello, good morning, Ioannis. So first of all, we don't disclose the exact operating rates for the various businesses, but we are in, you could say, in integrated packaging and containerboard running at high operating rates. The market is solid with solid order inflow. And in cartonboard, as you know, there is a weaker market, and there is also overcapacity in Europe. So there, we are ramping up sales as we speak. And there, the operating rates are lower. And as we have said before, we expect to reach full capacity with the new consumer board line in Oulu during next year.

And regarding the EBITDA impact, so we don't disclose specifically for various mills or units. But as you can see, if we look at consumer board as a totality, we improved our EBIT margin from about 2.3% last year to 6.5% in the second quarter of this year. So consumer board for us is a profitable business, but of course, we are still not where we want to be. So we are continuing to work on profit improvement actions within consumer board.

Perfect. And the second question on the Central European sawmills where you flagged some margin pressure despite the decline in sawlog costs as you show in the presentation. Can you talk about EBIT development? Is that business EBIT positive in the second quarter? And can you talk about some of the self-help initiatives to improve performance given that you have the strategic review and clearly, you want to get the business to the best possible position when you look at the alternatives.

Ioannis, In fact, sawlogs in Central Europe, if you compare the sawlog prices in the second quarter of this year compared to the corresponding period last year, so they have increased by about 7%, as Niclas presented to you. So whereas wood costs in Nordics have eased somewhat; in Central Europe, they have moved upwards. And our -- of course, we are increasing prices also for timber, but price increases have been lagging behind because of overcapacity. And you are absolutely right that self-help is what it's all about now. I mean we are -- we have made recently changes in the leadership in Wood Products business unit South. We are now taking very strong actions to work on the profitability of Wood Products Central Europe business unit.

And if I push you a bit, just to get a sense on profitability. If we look at EBITDA or EBIT level, is that business today positive?

It's a profitable business, but it's not there where our ambition level is. And we will take strong actions to improve the profitability of Wood Products business unit Central Europe.

Our next question comes from Pallav Mittal with Barclays.

So a couple of questions. I'll take it one by one. You did mention order books -- order flow healthy on the consumer board side of things. Just wanted to understand, are you seeing any changes in the trade flows because last year, we were seeing increased imports from Asia into Europe. So is the Middle East war impacting that and helping the Consumer Packaging business in the short term? That's the first one.

Pallav, regarding consumer board, we continue to grow faster than the market. We did that during last year, and we have continued to do that during the first half of this year. We will continue to do that moving forward. We have very cost-competitive state-of-the-art technology and mills. We have a really strong customer offering, product offering. And we also have received and we are receiving continuously extremely good customer feedback for our product quality and our service.

So we are continuing to grow faster than the market in consumer board, backed up by our recent significant investments here. And yes, it is true that looking into public statistics, there is increased -- there has been increased imports from China into Europe in carton board. So the Ivory boards have been imported here. But I want to restate what I have said earlier, we are not encountering direct head-on-head competition from Chinese board producers. And they are focusing on markets and segments where apparently, we are not strongly present today. And let's remember also that carton board, folded boxboard, CKB, they are highly specialized, high added value products. We have lots of features that the Asian producers don't have and apparently will not have. I mean, for instance, the whole furnish, the recipes where we use microfibers, where we are using different fibers and constructing the board out of 4, 5 different layers giving extremely good printing properties, surface properties combined with stiffness, bulk folding properties and so forth.

So clearly, we have many quality advantages. And then, of course, the whole sustainability part, which is more and more important for our customers. Customers want to have a low carbon footprint. And we have -- we can offer folded boxboard and carton board from practically close to or even carbon-neutral mills. So we can help brand owners and customers to take down their carbon footprint. So -- and service, of course, is extremely important. So even if there has been some increased imports, we haven't lost any business to Asian producers in Europe.

Great. That's very helpful. Secondly, I would like to ask on the Central European wood operations. And I think to the previous question, you made this comment that it is still profitable, but clearly, a much weaker quarter versus what we have seen in the past. If you could give any update on the progress there on the strategic review, what are the various options? And if you were to divest this business, I mean, how confident are you given the weak performance?

Yes. So of course, I mean, strategic review that we are looking into all options. And we will conclude the strategic review by the end of this year, as we said, in the fourth quarter of last year. We are progressing well, looking into all different available and possible options for Wood Products business unit Central Europe. And we will come back later during this year with our conclusions. Now we are focusing on the essential. I mean we know that we can improve the performance, and we are dealing with that with determination and speed. We have a new business unit leader in place since a couple of weeks, and we are taking stringent and determined actions there.

If I can squeeze one more in. Just on the pulp operation, if you could broadly talk about how the demand has been both in Europe and in Asia because I've heard mixed comments from different companies. So just wanted to understand what you are seeing from a demand perspective, both in Europe and Asia.

So first of all, it is true that if we look to the bulk and the volume grades, so bleached softwood kraft pulp, the market has been -- demand has been weaker than for eucalyptus or bleached hardwood kraft pulp. But then I think it's really important to remember that we have very competitive and good pulp assets because we have some of the most cost-efficient eucalyptus pulp mills in the whole industry in Brazil and in Uruguay. And basically, thanks to the cost-competitiveness and the good long customer relationships and also the own use that we have when we are producing cartonboard in Europe as well as in China, we can run these assets full and they generate a good healthy cash and profitability.

And in the Nordics, we are, to a very large extent, specialized in specialized pulps. So being Europe's largest and leading producer of fluff pulp where the market dynamics is different and then also producing unbleached special pure unbleached pulp grades for special niche end uses like electrotechnical insulation and also certain food filter applications. So thanks to the high degree of specialization, we have a profitable pulp business, 16% EBIT margin. And the business we have also in the Nordics -- Nordic production is profitable, thanks to differentiation and specialization directly impacted by the weaker bleached softwood kraft pulp market conditions.

Our next question comes from Linus Larsson with SEB.

It looks as if your core packaging and pulp operations are moving along pretty nicely. They actually came in better than consensus and my expectations. But the disappointment here in the quarter appears to be in the other division. It's actually your second biggest division now, and we have spent some time on it already. But maybe if you could help us bridge the year-on-year change now you're reporting EUR 7 million that's down from EUR 30 million year-on-year. Could you, in any way, try to explain that change and maybe add some color in addition to what you already said, please?

Linus, I'll take this one. So you're absolutely right. I mean, other was the weak spot in the quarter. Otherwise, we are very happy actually about the progress being made. And when it comes to other, the main driver there was very kind of Sweden specific. So as I showed here earlier, the Sweden wood prices have come down, no surprise, come down since late last year. And then that was accelerated by the storm Johannes in the end of December. And this has then -- I mean, we have a relatively sizable external wood sale in Sweden, in particular, not so much elsewhere. But in Sweden, in particular, we sell quite a lot of wood to external parties, not for own use, but external parties. And then prices coming down, that is the main thing you see in this kind of other category.

Then if we reflect a bit on -- and not wanting to forecast or commenting on forecast of wood prices. But what we've seen in previous storms, and we've done a look back previous storms in Sweden and the Nordics. What we see now is pretty similar to what we've seen in the past, i.e., there is price pressure. There's a lot of fallen trees that need to be picked up quite quickly. Then that creates a price pressure, which at least in the past has been somewhat temporary, has been temporary essentially. So that's what we are in the midst of for the moment, and that's what you see in the other category profit.

Can I still, Linus, build on that and add one comment. As Niclas said, we sell to third parties quite a lot of wood. And I want to underline that this is what we have seen in others is not Bergslagets Skogar related. Bergslagets Skogar is very stable, really good performance. Bergslagets Skogar is harvesting and selling some 3 million, 3.5 million cubic meters of wood annually. But our sales of wood to third parties is on the level of 13 million to 14 million cubic meters.

So it's really on that part where we have seen them through lower sales prices, this sales price negative impact that is visible in the bridge that Niclas showed. So it's the trading part, which is part of our -- which is not part of Bergslagets Skogar, but which is part of our wood and energy business unit.

Great. That's really helpful. And so 2 questions. Then if you split the year-on-year change, how much is relating to what you just said and how much is relating to sawmills and/or other things? And also going into Q3, Q4, any idea how this may play out, what might be bouncing back when and so forth?

I don't, Linus, have an exact split. I don't want to give an exact split to be specific. But I would say a big chunk of the year-on-year came from this. And then as you said, another part of it is Central European wood products. And also there, as I said, in Central European wood product, it's a wood cost-related margin effect. So otherwise, things are running. We know we can do better. We can do more and we will do more. But also there, it's wood cost related. Very different reason why wood cost moving up, one in Sweden moving down.

But anyway, I would say main chunk is the wood cost, Sweden wood prices and then we have other things, including Central European kind of wood operations. And remember, in other, and admittedly, this is a bit of a complex category, I understand for you because we also have our costs there. So it's the operations and then we have the so-called group cost there. On group costs, there's no major movement as such, at least not in the wrong direction. And there is also the time lag factor. I mean we get immediately the negative impact of lower wood costs when we sell to third parties. But then when it comes to internal impacts, there is a inventory in between. So the positive cost impact comes with a certain delay to our businesses.

[Operator Instructions] Our next question comes from Gabriel Simoes with Goldman Sachs.

So the first question would be on the containerboard side of things. So you mentioned that demand remains strong in this market. So I just wanted to understand your view for the remainder of this year, right? So given that we have a significant addition expected for capacity in the testliner side in Europe, how do you expect that to impact the S&D balance and demand for kraftliner?

And then as the gap between kraft and testliner is already significantly higher than historically, if prices ended up moving lower for testliner because of this new capacity, what would be your expectations for this gap and for the testliner pricing, especially thinking about where demand, if you think that demand would behave in a more resilient way. So that's on the containerboard side. And then I just wanted to add a question on the liquid packaging board side. So just to understand your view on how demand has been progressing as some peers have been mentioning strong volumes there. And I believe competition has been increasing in that front, right? But we also see the main aseptic carton players still reporting below historical numbers for growth.

So just wanted to understand how you see that market as a whole behaving? And adding like the demand from smaller and nonsystem suppliers there. So if you could provide some color on how relevant that is becoming for you guys? And if you are already a relevant player in that space for the nontraditional players of aseptic cartons, that would be very helpful.

Thank you very much, Gabriel. If I start with the latter part, the liquid packaging board, we are the world leader in liquid packaging board, both in terms of global market shares, volumes, but also in terms of quality, service, and we are producing liquid packaging board in 3 mills, Finland, Sweden and China. And for us, this is a very successful business where we are continuing to see growth and opportunities also to develop new business globally in different regions around the world. So it's a good business. Also, operationally, these 3 mills are state-of-the-art, really highly efficient and very productive. So -- and the customer feedback we constantly get here is extremely strong and positive. So it's a good business, and we see also positive volume development, thanks to our relative competitiveness in this area.

Going then to containerboard. So also here, we are in a good position because, first of all, as you know, the kraftliner market, when you look at global supply and demand is actually -- is almost starting to be tight. So there is a very good supply and demand balance, thanks to the extensive capacity closures in North America during the recent years. I mean millions of tons of capacity has been exited in kraftliner. And U.S. has been exporting a lot of kraftliner into Europe, into various parts of the world, Asia, South America and so forth. And this, of course, offers opportunities for us to grow and develop our business. So kraftliner market is in a good position from our perspective.

When it comes to the testliner, in testliner, there is more overcapacity, but it's important to remember that testliner, recycled fiber-based testliner is a very local business. You need to be -- it's a lower-priced product compared to kraftliner. So you need to supply close to your mills. You also get the recycled fiber, the raw material close to your mills. And here, we are in a good position that our test liner production in Ostroleka is extremely well placed, and it's very competitive. It's one of the lowest cost, if not even the lowest cost testliner production unit in Europe. And we are smack-on in the middle of the fastest-growing corrugated market in Poland -- in Europe, which is Poland.

So we are well placed there. We are cost efficient. And thanks to our strong position, we can operate -- run with high operating rates and a successful business despite of some, let's say, local overcapacity in other regions of Europe.

Our next question comes from Cole Hathorn with Jefferies.

I'd just like to follow up, I mean, on the other division, your -- I mean, the positive performance in your Consumer Packaging, Integrated Packaging and Pulp is overshadowed by the other division. And we've lost quite a bit of visibility combining Central Eastern Europe, the forest in Sweden, et cetera, into that division. So can you provide any help of how you expect the EBIT performance to be into the third quarter and the fourth quarter? And the reason I ask this because you've talked about Sweden profitability coming down, but I look at your -- the old Forest division and stripping out property sales, there was no quarter-on-quarter move that was EUR 20 million of EBIT.

So anything that you can help? Has there been a one-off that's impacted this and you should see improved profitability on Sweden forest sales in 3Q? And similarly, with the sawmill business, you talked about higher prices and the lag effect. Should we see higher margins into the third quarter just as you realize some of that pricing and hopefully saw our costs ease a little bit?

Cole, fair point, first of all, in terms of what you said lost a bit of visibility, gained, hopefully, visibility elsewhere in the other segments, Consumer Integrated and Bio. But then, as you say, probably lost a bit in the other category. And let us think about as a kind of a learning and input also from you, thank you, think about how we kind of make it easier going forward to understand this. Because as I said, it's -- we both have the operative businesses like Wood Products South, and then we have the corporate costs in there. And of course, getting it right from a forecasting perspective with the visibility you have today is not the best.

I don't want to give a forecast for category here. But, what should I say, don't expect any dramatic movements going forward. But again, it is a sum of these different parts. And going back to what we are doing, as Hans mentioned, on the Central European wood products, we'll come back with the strategic review announced. There's a lot of potential in Central European wood products. And we are looking at those, looking into those for the moment and actually starting to take actions, leadership changes, as Hans mentioned. But more on that later. So sorry, Cole, I can't give you an exact number anyway.

Maybe I can ask this another way. When we think about going into the third quarter, I understand you're going to be doing a lot to try and keep profitability stable quarter-on-quarter, could you just talk about some of the pluses and minuses and positives? You've obviously got higher maintenance costs, but in Integrated Packaging, you've probably got to benefit from higher kraftliner and corrugated pricing. Consumer board, hopefully, you've got a little bit of price/mix and lower wood costs. You talk about other being no major changes. But what are the moving parts to try and help you offset the maintenance to try and keep a stable profitability level?

Again, don't want to provide a forecast, an exact figure. But I mean, on the consumer side, we see a pretty good run. Of course, we have the ramp-up in Oulu kind of pushing in the other direction or still being a drag. But otherwise, by and large, pretty good on the Integrated side. As you say, also demand-supply balance tightening and becoming better, and Biomaterials continue as is. But I want to avoid giving an exact number as we don't give a forecast by segment.

Our next question comes from Reinhardt van der Walt with Bank of America.

I'd just like to revisit the variable cost decline that you showed in the bridge. Can you give us a sense of how much of that cost decline came from measures in your own control, so things that are consistent with the medium-term target? And how much of that came from pulpwood and fiber deflation in general?

Yes. So we are pretty pleased with the own actions, how they continue. And I'm personally -- this gets me going quite excited about the 2,000 actions that we are running concurrently. Of course, it's not all variable, it's also in the Other fixed and so on. But that's going well. And going back to kind of the CMD messages, the EUR 500 million to EUR 700 million is very much in sight and on track, and we continue to push that. And if anything, there's upside.

We go specifically to Q2 now, I mean, we had pluses and minuses. So we had a clear plus from the own actions. We had a negative from the Middle East related logistics, chemicals, to some degree, energy, but logistics being the biggest category there. And then we had a positive from fiber cost in general. So what you see there is a mix of all these 3, and fiber being a significant part, but not at all the only part. So pluses and minuses.

Understood. And maybe for my second question, just a simple one. If we look at consumer board, what do you think needs to happen in the sector in order for it to return back to mid-cycle profitability? What do you think the industry needs to do?

Well, first of all, I mean, you all know and you read the same news as us, I mean there is one of our competitors have declared bankruptcy. We have another very significant carton board producer from Southern Europe where there has been forced ownership changes because of financial distress. And many of our competitors also are actually negative, where we are producing losses, where we are making almost 7% EBIT margin under these circumstances.

So that just shows that we have and as we showed also in the CMD, we have the most cost-efficient, we have the technically most modern, the largest production facilities in consumer board. And we are building on that leading position, and we are going to be the winners here, and we are going to continue growing faster than the market in this area.

That is all the time we have for questions. I shall now hand back to Hans Sohlstrom and Niclas Rosenlew for closing remarks.

Well, first of all, thank you very much all of you for participating and for your good questions. And I think it has become absolutely clear that we are doing whatever it takes to improve the profitability, profits of Stora Enso and also the shareholder value through our own actions to improve our competitiveness as well as also through structural development of our portfolio. So we are really determined to maximize shareholder value creation.

Thank you very much. Have a good day. Bye-bye.

Hello, everyone. My name is Jutta Mikkola. And as the Head of Investor Relations, I'm delighted to welcome you to our first quarter results presentation. With me today is our President and CEO, Hans Sohlstrom; and our CFO, Niclas Rosenlew.

This quarter, our main theme was focus on our own actions drives results. This highlights the decisions and actions we took last year and the momentum we are bringing into this year. Hans will start with key highlights and strategic focus areas. And after that, Niclas will take you through our performance and results. We'll wrap it up with the key main takeaways. Once we are finished, like usual, we will open the floor for your questions.

So thank you once again. And I hope you had a good time with us. With these words, Hans, the stage is yours.

Thank you, Jutta, and hello, everyone. Great to have you with us.

The first quarter of 2026 developed largely as expected. While market conditions remain challenging, we continue to drive performance through our own actions across operations, costs, commercial excellence and procurement. Demand in our main markets stayed at a relatively low level and pricing pressure persisted in some business segments, while prices firmed up and increased in Others.

We delivered resilient results with sales of EUR 2.4 billion and EBIT of EUR 159 million. Operationally, the ramp-up of the new consumer board line at Oulu continued. We focus on improving the technical runability of production. This, in addition to the weak market, impacted profitability during the quarter and is expected to continue into the second quarter. While the ramp-up continues to impact short-term profitability, we remain confident in bringing the line to full operational performance during 2027.

Stora Enso's segment reporting changed as of 1st of January 2026, and the group has restarted the comparative figures for its segment reporting for 2025. This quarter marks the first time we report under our new reporting structure, which reflects how we manage the business and how value is created across the group. A key to value creation is the P&L responsibility across 6 business areas and 23 business units. I am pleased to see that this decentralized P&L responsibility is already having a positive effect through our leaders focusing on continuous profit improvement. This provides a strong foundation for performance culture going forward.

We continue the preparation for the separation of our Swedish Forest Assets business into a new publicly listed company, which is expected to be completed during the first half of 2027. Preparations for the separation of our Swedish Forest Assets business, now named Bergslagets Skogar, formerly Forest Company, continued to progress as planned. We'll discuss this more in detail a bit further in the presentation.

Our strategic priorities remain unchanged. Lead in customer value creation through innovation, quality and sustainability; grow faster than market with superior customer offering, leading technology and operational efficiency; expand margin through business focus, a positive performance culture and systematic value creation; generate cash with high conversion ratio and disciplined capital allocation. We continue to strengthen our competitiveness and ability to deliver consistent performance regardless of external market volatility.

As said, one of our key strategic priorities is to expand margins through business focus, stronger performance culture and a systematic value creation. This has been a core priority throughout last year and continues to be so going forward. We have identified EUR 500 million to EUR 700 million of value creation initiatives, all with clear ownership and already underway, expected to support margin expansion over the next 2 to 4 years. Development in the first quarter have been encouraging.

First quarter underlying profitability improved as a result of our own actions offsetting market headwinds from unfavorable exchange rates as well as a continued pressure on prices and demand. With the wood cost easing, the market headwind can even turn into a tailwind at some point. The Oulu ramp-up continues to weigh on profitability in the short term. But once fully ramped up, it will be a clear contributor. Overall, the fundamentals of our margin expansion story remains firmly intact with increasing contribution from own actions as we move forward.

Next, a couple of words about the progress of the demerger of the Swedish Forest business. We are moving ahead with our plans to demerger the Swedish Forest Assets into a separate listed company with completion anticipated in the first half of 2027. Today, I'm happy to announce the name of the company, Bergslagets Skogar. The new name reflects both the geographic and historic footprint in Sweden's Bergslagen region and a long-term approach to value creation, where planning horizons extend across generations. This company will represent a high-quality Forest asset entity with over 1.2 million hectares of sustainably managed forest land in Sweden and positioned to become Europe's largest listed pure-play forest company.

A few words about the logo. In earlier centuries, timber transported from the forest was marked to indicate ownership and origin. In Bergslagen, that mark was the letter B, which today inspires the new logo. The design reference, the wood structures historically used in the Falun Mine, where timber formed the foundation for safety, stability and continuity, values that continue to guide forest management today. The name and the logo are not the only thing we are announcing today. We will be hosting Bergslagets Skogar's Capital Markets Day on 3rd November 2026 in Stockholm. So please do mark the day into your calendar. That is where the company will provide investors with an overview of Bergslagets Skogar's stand-alone strategy, value creation drivers, capital allocation framework and financial profile.

Then let's move on to the innovation highlights. This time, I have 3 examples related to another strategic priority, lead in customer value creation through innovation, quality and sustainability. The first example is our partnership with Majoral and Zfoam. We co-developed a jewelry package made from Papira. Papira is our trademarked wood-based and fully renewable and recyclable packaging foam. It was awarded in the Paris Packaging Week Innovation Awards for its performance, design and environmental responsibility. This shows that our sustainable fiber solutions are making an impact in premium packaging.

The second example highlights the importance of the strong link between material development and converting expertise, in this case, with Aristo. Aristo is a manufacturer of paperboard boxes and paper bags. Our CKB Nude Aqua, a dispersion coated board solution offers grease resistance and delivers the physical properties converters expect from high-performing board. In addition, it serves as an alternative to plastic materials.

The third case highlights our progress in emission reduction, particularly at our Imatra mills, where we have significantly reduced greenhouse gas emissions. More broadly, reducing CO2 is a priority across all our mills with Imatra as a strong example. In the first quarter, total group Scope 1 and 2 emissions were down by 62% compared to the 2019 base year, reflecting continued improvements in energy efficiency and lower operational emissions. At Imatra, this has translated into a reduction of more than 100,000 tonnes of CO2.

Taken together, these cases demonstrate how innovation, quality and sustainability come together in our offering, supporting customer value creation and strengthening our position in sustainable packaging. It is about combining material innovation with application expertise, while at the same time, reducing our environment footprint.

With that, I will conclude this section and hand over to you, Niclas, to take you through the financials.

Thank you, Hans, and hello, everyone. Let's now take a look at the financial overview for the first quarter.

During the first quarter, as Hans already mentioned, our own actions have been driving the performance. Sales was stable at EUR 2.4 billion and would have increased excluding the negative FX effect. Deliveries were higher in all segments other than Biomaterials, where the Veracel site had planned maintenance during the first quarter. Adjusted EBIT for the first quarter was EUR 159 million. Comparing year-on-year and excluding the impact from the Oulu ramp-up, the underlying profitability improved, reflecting a stable underlying performance despite market headwinds. This we can clearly see when looking more closely at the EBIT bridge for Q1.

So looking at the big picture, adjusted EBIT declined by EUR 16 million compared to last year, with the primary reason being the ramp-up of the new line in Oulu. The old ramp-up had a negative impact of EUR 29 million on our EBIT for the first quarter. Last year, the ramp-up only started at the end of the first quarter. Nevertheless, our underlying performance has strengthened, thanks to our disciplined strategy execution and the focus on own actions. This progress is particularly evident in the improvements we made to both variable and fixed costs. On the fixed cost side, we saw gains even with planned maintenance at the Veracel site, which we didn't have last year at this time.

Looking at the market movements, lower wood costs improved profitability, but negative FX effects and some price and mix changes more than offset those positive contributions. The net FX had a dual hit on us this time. Weaker dollar reduced our sales, while then the stronger Swedish krona pushed our costs up.

Let's then turn the focus on to cash flow, which is another important strategic priority for us. In the quarter, we spent EUR 100 million less on CapEx compared to last year. This is fully aligned with our plan to reduce CapEx as we are well invested and have competitive assets. While the underlying cash flow continues to improve, in the first quarter, it was impacted by restructuring-related one-off items and slightly higher working capital. Specifically, we closed a Packaging Solutions site in China and had other restructuring-related payments as well as related to our cost reduction actions.

Also, changes in working capital had a somewhat more negative impact compared to Q1 '25. This was mainly due to higher receivables related to the relatively strong Consumer Packaging sales. Q1 is typically the quarter where we tie up a bit more working capital. So in sum, CapEx came down, but restructuring actions and working capital movements impacted cash flow in Q1 negatively. However, from an underlying cash flow perspective, the positive trend has continued.

If we then move on to the balance sheet and net debt. Net debt was about EUR 3.5 billion, a clear decrease from last year's EUR 4 billion levels. However, it did increase from last quarter, and this was mainly driven by the full year dividend booking, which is around EUR 200 million as well as lower cash flow. Net debt-to-EBITDA was 3.1x.

On this note, I want to say a few words about the EUR 1 billion hybrid that we successfully issued in April this year. It is a good instrument for us optimizing our balance sheet. It is treated as equity under IFRS and partly by the rating agencies. So it supports credit metrics, protects our investment-grade profile and ensures resilience in a volatile world. We are pleased with the interest the hybrid attracted. The hybrid further strengthens our capital structure, enhances our financial flexibility and supports the long-term strategy and the steps ahead related to our Swedish Forest demerger. As Hans said, this is the first time we report based on the new segment structure. Compared to the previous reporting structure, this better reflects our portfolio and focus, how we manage the business as well as how value is created across the group.

Let's start with Consumer Packaging. We started the year reasonably well with improving sales. This was mainly due to higher deliveries of food and liquid products and structural changes, meaning the ramp-up of Oulu and the Junnikkala acquisition. While order inflow improved, especially in Food and Liquid, demand for European consumer board grades remained mixed. Adjusted EBIT increased by EUR 10 million. The underlying profitability improved as we made good progress with own actions, lowering the variable and the fixed costs. Also, lower wood costs supported profitability improvements. This was partly offset by the adverse impact of the ramp-up of the new line in Oulu, pushing the first quarter results down by EUR 29 million.

In Integrated Packaging, sales decreased slightly, but profitability improved. The sales decline was mainly due to negative impact from FX. Volumes on the other hand, improved. Adjusted EBIT increased by EUR 6 million as lower variable costs were partly offset by lower prices and negative FX. Demand for containerboard and corrugated board remained stable.

Also in Biomaterials, the main reason for lower sales was the negative FX, mainly the weaker dollar, but also the deliveries were somewhat lower. This was because we carried out planned maintenance at the Veracel site during the first quarter, and we did not have the Veracel maintenance in the comparable quarter last year. Adjusted EBIT decreased by EUR 20 million as lower sales were only partly offset by lower variable costs. The softwood market remained weak, but for Asian hardwood, prices recovered slightly sequentially.

Then commenting on the Other segment. This is where we have the Swedish Forest Assets where we prepare for the demerger as well as the Central European Wood Products operations where we have the strategic review ongoing. In addition, the Other segment includes the growth business unit, the wood and energy business area and group functions. Segment Other sales, mainly sales of wood and Wood Products remained stable. The intercompany sales of wood and logistics services from segment Other to Industrial segments have been eliminated and do not show any more in these segment numbers. Adjusted EBIT decreased by EUR 10 million, and this was mainly due to higher wood costs in Central European Wood Products operations.

With that said, I will hand back to you, Hans, for concluding remarks.

So thank you, Niclas. As said, the first quarter of 2026 developed largely as expected with stable performance. While market conditions remain challenging, we continue to drive performance through our own actions across operations, costs, commercial excellence and procurement. Our strategic priorities remain unchanged. We will lead in customer value creation through innovation, quality and sustainability. We will grow faster than market with superior customer offering, leading technology and operational efficiency. We will expand margins through business focus, a positive performance culture and systematic value creation. And we will generate cash with high conversion ratio and disciplined capital allocation.

I would like to thank our employees for their strong contribution at the start of the year. Also, I would like to thank our customers, partners and shareholders for your continued trust. Together, we are building a stronger, more focused and more sustainable Stora Enso.

Thank you for listening, and we are now ready to take your questions.

[Operator Instructions] Our first question comes from Cole Hathorn with Jefferies.

I've got a few on my side. I'd just like to start with Consumer Packaging and your own internal actions there. I mean the Consumer Packaging division did very well. And I'm just wondering if there's any color you can break out between how much of the performance was from lower wood costs? How much was it from your own internal actions? And any guidance you can give for the benefit of those internal actions through 2026? I'm just trying to break down how much is just market relief versus your delivery.

Yes. Thank you very much, Cole. Well, first of all, sequentially, our volumes improved. And so in that respect, that was what was partly a contributor. But the main part of all the improvement really comes from our own actions, the value creation programs, the thousands of programs, which is a culture in our company where we continuously improve and drive performance in every mill, every operation and also every business area. So our performance is mainly driven by our own actions.

And maybe, Cole, to add, I mean, on the '26 and so on, we don't provide an exact number. But of course, going back to kind of -- the CMD, we had this EUR 500 million to EUR 700 million target over the next 2 to 4 years. As Hans said, that's kind of we work across all businesses, all functions, everything on these thousands of initiatives any one day. And of course, we push it as hard as possible, but think about it as a relatively even distribution over that period of time. That's at least how we push it.

So it's right to think that those internal actions as well as some, hopefully, market wood cost relief should continue to benefit through the rest of the year?

Well, the own actions, those we are pushing throughout the year. So that's a continuum. Of course, then when it comes to other kind of market drivers, be it wood costs or sales prices or whatever, that's then a different factor. But the own actions will continue to push across the year.

Well, then maybe just my follow-up is on wood cost relief and how you're managing the cost inflation in kind of energy and logistics. Just any color of commercially, are you doing any surcharges to offset higher logistics costs on liquid packaging board and then wood cost relief through 2026, how are you thinking about it?

Yes, Cole, we are, of course, working also on pricing. And even if -- when it comes to energy, we are, to a large extent, self-sufficient in energy, 75% self-sufficient. Oil and gas represents only 3% of our total fuels, but we have impacts from the war in Iran and Hormuz Strait's closure through increased logistic costs as well as also some chemical costs. And of course, we do whatever we can also to improve our pricing.

Our next question comes from Linus Larsson with SEB.

It's an ever-changing world that we're living in. And given the geopolitics, I'd be very curious to hear your thoughts on -- or your observations from the real world, what you are seeing. So it seems like tensions escalated towards the end of the first quarter. What are you seeing in terms of client activity, order books, et cetera, now at the beginning of -- in the early parts of the second quarter? Any color on that would be super interesting.

Thank you, Linus, for your question. The demand for Stora Enso's products is mainly driven by private consumption. So about 2/3 of Stora Enso's top line really relies on private consumption. And consumers' confidence is now with the increased geopolitical uncertainty and the war is, of course, on a low level. And of course, that impacts also the demand for our products. And it only underlines the fact that we need to continue to do what we have been doing in the last couple of years, focusing on our customers, serving them better than ever before, continuing driving costs out, improving competitiveness, performance.

And I'm truly proud of the work that is being performed every day by all Stora Enso employees in every business area, every business unit, every mill and operations across the world. I think we're doing a fantastic job, and I'm so happy to see that we have really embedded this culture, performance culture of continuous improvement. And I think we have only seen the beginning of what we can perform here in terms of improved competitiveness.

Yes. And then just to add to what Hans said or what's -- reiterating what Hans said earlier, on the cost side, we do see an impact -- a negative impact by higher costs and that's mainly from logistics and chemicals where we see it. And that came pretty quickly actually after the conflict started.

Right. That's helpful. And maybe dialing back a bit to the previous question and a follow-up on what you just said, Niclas. I mean, the variable cost side, what's the net of things in the second quarter? Would you say -- I presume you have still a tailwind from fiber costs, Q2 versus Q1. How significant is that? And is that bigger or smaller than the headwind that you are talking about in terms of logistics and chemicals?

Yes. It's, of course, a bit tricky to kind of give an exact number because, as you said in the beginning, the world is a pretty dynamic place and every day is kind of a new reality. And again, that's why, as Hans said, that's why we are really focusing on managing our own actions. And I mean, we expect to see higher cost chemicals, transportation, which we then work on offsetting. And then you're right, then we'll have some tailwind from wood costs. And then as you saw now in Q1, a big headwind from FX. So exactly where those will land is, of course, a bit premature. I don't want to say, but it's going to be a mix of those things.

Sorry, just finally, the FX side, is that a headwind still Q2 on Q1 given today's exchange rates?

Well, I was saying it's -- as you saw, it was a significant headwind in Q1. Again, how it will fall out in Q2 depends on the rates, and we can all check the kind of today's rates, but also how they then develop over the quarter. So it was not a comment on Q2 specifically, but rather on Q1.

Our next question comes from Ioannis Masvoulas with Morgan Stanley.

My video is off, but I'll just focus on 2 questions from my side. First, on Consumer Packaging, a key aspect of the CMD last year was your focus on taking market share versus recycled grades. In today's environment where recycled-based packaging products are probably facing greater energy cost pressures, are you seeing that potential share gains accelerating? Or is it still too early to tell?

Well, Ioannis, you are right that the higher costs of fossil energy, oil, gas, natural gas, basically improves our relative competitiveness because we are self-sufficient in energy. But of course, we have logistic costs, which are moving up. So -- but that's -- I think the rest remains to be seen.

Okay. And maybe just on the ramp-up costs, which they are running above the original target, which you have set at about EUR 100 million. I think you're guiding Q2 similar to Q1, so around EUR 30 million incremental impact. How should we think about the overall ramp-up costs? And when do you actually expect this to no longer be a drag to earnings for the segment?

So basically, what has happened in the first quarter is that from a technical perspective, from productivity production, we have clearly improved, and we are on a good level according to plan. But of course, with the subdued demand, which is due to the geopolitical uncertainty, the low consumer confidence, it also means, of course, that we are not running full. So we are taking also some market-related downtime, and that then also has an impact then on the profit generation of this new production line.

So just a quick follow-up to clarify here because I would think that Oulu is the most cost competitive mill that you have, at least once it runs fully, if you need to take some market-related downtime, would it not make sense to do so in some of the other higher cost mills in the footprint?

Ioannis, you are absolutely right. But on the other hand, it's also a question of getting your products qualified. Normally, it's a long process of several months per customer. So as the production volumes are increasing rapidly, there is a certain also time lag for sales to pick up through the quality verification and qualification processes, which takes several months as such.

Our next question comes from Gabriel Simoes with Goldman Sachs.

So the first one would be on the restructuring expenses. So this quarter, we had lower-than-expected cash generation here despite the stronger adjusted EBITDA. And I understand that a portion of that is because of the change in reporting and the spin-off of the forestry business, a portion of that, the higher restructuring expenses. And I just wanted to understand until when we should see higher expenses in that front?

And the second question would be on the Consumer Board side. So I just wanted to understand how you're seeing competition in this market and what impacts you have seen in terms of competition since the beginning of the Middle East conflict. So I wanted to understand if competition with Chinese products has increased because of how hard it has been to get products to the Middle East or has decreased given the higher transportation costs. So just wanted to understand your -- like how you balance that.

So Gabriel, good to hear you. On the restructuring charges, you're absolutely right that they were higher than usual. And the single biggest element in the restructuring charges were actually our closure of a site in China. So it was a Packaging Solutions site in China, where we actually consolidated or we closed down the whole site, and we took on the production in other sites that we have in China. And that was twofold of the cost kind of from this closure.

One was the restructuring, so essentially employee-related cost and the other element was then a write-down of assets in that site. So that was by far the single biggest thing now in Q1. Then we had a couple kind of a continuation, again, back to all the actions we drive the value creation actions, there was an element of that. And then you are right, there was an element, although a smaller one related to the Swedish Forest demerger. So that was kind of in a nutshell.

And if I continue then, Gabriel, on the Chinese competition. So basically, with higher logistic costs, with higher costs of fossil energy, that basically improves our competitiveness in our domestic market in Europe because, of course, the Chinese competitors, they very much rely on oil, gas, fossil energy as their primary source of energy. And then, of course, they have significant and higher logistic costs to our domestic market, Europe than what we have.

All right. If I could just ask a quick follow-up on the first question. Just trying to understand, given that the majority of the restructuring expenses this quarter came because of the shutdown of this plant in China. Just wanted to understand like how we should see these expenses coming throughout the year, given that a portion of it should still be for the spin-off?

Yes. So the China one was a one-off. Of course, we don't rule out similar measures in the future. And then what comes to the value creation, we do take constant action now. So there will likely be some in the future as well. And then exactly, as you say, we are moving forward with the preparation of the demerger. So there will be some there as well. But I would -- we can't give you an exact number, but out of the total IAC, the spin-off related was single-digit type of cost.

Our next question comes from Reinhardt van der Walt with Bank of America.

Congratulations on the results. I just wanted to follow up on one of your answers to the previous questions around the import dynamics in Europe. Are you seeing any change in customer thinking around security of supply at this point given all of -- given the geopolitical issues and the conflict?

Thank you, Reinhardt. Well, it's perhaps a little bit premature to draw some really fundamental conclusions. But clearly, in a world of -- in a very volatile world, security of supply is important. I mean we saw that throughout COVID 2020. And yes, also in this very volatile world, long-term customer relationship, partnerships, security of supply is key.

Right. Got it. But you're not seeing explicitly customers talking about it or sort of changing their behavior yet, but it's kind of just a natural conclusion that at some point, it will become more salient.

I think too early to draw some really fundamental conclusions, but it is important. And of course, customers -- in customer meetings, they raise this topic.

Got it. Understood. And maybe just my second question on prices. So FBB index seems like it's just ticked up a little bit. How are you seeing pricing in your business? Are you seeing that same kind of translation in prices? And if at all possible, can you give us a sense of how much of that price increase you think is cost push versus market balance related?

Reinhardt, we are following the same public statistics as you are doing and basically also that public pricing information and public price statistics is reflected also in our businesses across the board.

Our next question comes from Martin Melbye with ABG.

A question on maintenance. I think on Page 18 of your report, you have a good setup showing maintenance by quarter, but you don't give the full year. Historically, you spent like EUR 500 million per year on maintenance. Last year, it was only EUR 390 million. Is this year -- the EUR 390 million and is the EUR 390 million the new normal?

So if we zoom out a bit and talk about the full kind of CapEx, of which maintenance, of course, is a part or significant part even. As you know, we have deliberately and for a reason, good reason, said that we are going to take down CapEx and EUR 550 million or below is the target for this year. Of course, that very much relates to kind of the so-called strategic CapEx, i.e., we do not see a need to kind of expand or do any major new CapEx initiatives because we have what we need essentially. But of course, we are looking at maintenance as well, and it's part of the kind of normal efficiencies. We can maybe take it offline. I don't have an exact kind of number now for the full year in mind for maintenance specifically. But yes, we continue to work on that as well.

And Martin, if I can continue on your question there. I mean, we have -- in the CMD in November of last year, we have launched our 4 strategic priorities, lead in customer value, grow faster than the market, expand margins and fourth, generate cash. And as you know, we have also guided for significantly lower capital expenditure this year compared to earlier years. And in general, as we also explained in our CMD, our asset base is well invested. We have strong, modern asset base, actually the best in our industry. And now we have a strong focus on cash generation.

Okay. And this question has been asked many times now, but you haven't really answered fully the way maybe we want you to. On the logistical cost and the chemical cost, is it possible to give a number in Q2 or for the year?

We don't give any guidance there. But logistic costs and related chemical costs are higher because of higher oil and gas prices. But as I said, we are, to a large extent, self-sufficient in, energy, and we're using bioenergy. So we are less impacted than many of our competitors.

And the reason, Martin, not to give a number, it's not like we don't have scenarios internally. Of course, we have and anyone can calculate the scenarios. But as we all know, it's a moving target. So today, the scenario might look a bit different from yesterday and so on. So that's why it's more through a kind of a scenario thinking that we then plan our actions.

Our next question comes from Andrew Jones with UBS.

I've got a couple. Just firstly, on Oulu, I don't see any EBIT number for that or a specific volume number in the release. I mean, in 4Q, you said it was sort of minus EUR 31 million on EBIT. Do you have a number you can give us on the profitability of Oulu and maybe a utilization that was running out? That's the first question. I'll follow up with another one.

So the number for Q1 was EUR 29 million. And then there as a bit of an exception to everything else where we don't -- where we say that we don't give guidance, but specifically then for Q2, we've said similar levels, but EUR 29 million was the number.

And I want to point out, Andrew, that as I mentioned before, I mean, if you dissect the EUR 29 million compared to the EUR 31 million in the fourth quarter, it's very different. I mean from a productivity, from a performance perspective, we are in a clearly better level again according to our ambition level. But of course, the whole market and demand pricing, all of that then also has an impact.

Sure. And the utilization in 1Q? And maybe now?

Not disclosing that.

Okay. And then just on the progression of prices as we go into 2Q and into 3Q. I mean there's different lags in the business. And I guess the index went up on consumer board by EUR 30 or so on FBB. Obviously, containerboard, we've seen larger price increases, kraftliner up EUR 30, then testliner up EUR 100. How should we see that translating into your business into the second quarter and third quarter given the sort of lags and the sort of translation of box pricing? How should we think about that sort of price cost spread as we move through the next couple of quarters?

Thank you, Andrew. Of course, your question is very, very relevant. But the only thing I will say is that we are following the same statistics as you are following, and we don't really give any guidance on pricing.

next question comes from Detlef Winckelmann with JPMorgan.

Just one question from me, please. We've just gone through U.S. results. I think they're all talking about less consumer board coming from Europe into America. At the same time, you're now talking about Europe becoming more competitive versus Asia. So clearly, there's a lot of things on the go right now. I'm just curious, if things stay as they are, which is a big if, I agree, does that tighten your overall market? I want to just kind of get your thoughts on the puts and takes there. Are we moving a little bit tighter, a bit looser with all these things going on at the moment or unchanged?

Well, thank you for the question, Detlef. First of all, I mean, we -- the whole -- as a part of the business case for Oulu was also significant sales to the U.S. and we are following that plan. I mean, of course, with the import tariffs, the profitability of our business in the U.S. as well as also, by the way, the weakening of the U.S. dollar. Go 1 year back, the U.S. dollar was about 15% stronger against the euro as today.

So of course, the tariffs and the weaker U.S. dollar has an impact on the profitability of our sales to the U.S. But also with the tariffs and the currency exchange rates, we can make money in the U.S. And we are there in the long term. So we are establishing and growing sales also to the U.S. But of course, Europe is our main market, and that's where the main part of our cartonboard volumes are going.

Maybe if I can just follow up on that. I mean, I fully understand over the last year or so, we've seen FX fluctuations, tariffs, et cetera. But I think a lot of the consumer board commentary out of the U.S. has been pertaining to the last, call it, 2, 3 months ever since the Middle East crisis has taken off. You yourself referred to Europe becoming a bit more competitive relative to Asia because of energy prices in Asia going up by a bit more. So my question is more around the shorter term, how this Middle East crisis has shuffled or shifted supply chains and kind of balances in Europe and if it's changed at all?

Well, I think it's a little bit early to draw any profound conclusions here. But when I was referring to competitiveness, cost competitiveness, I was mainly referring to our company, which is, to a large extent, self-sufficient in energy. But of course, logistic plays a role here. And of course, it's better to be local in Europe than having long and expensive logistic chains.

Our next question comes from Joni Sandvall with Nordea.

A couple of questions from my side. Maybe starting with sales. Have you actually -- because in anticipation of, let's say, higher prices, have you seen any prebuying in the market during Q1 or early Q2?

Well, thank you, Joni, for the question. It's really hard to say where the volumes and the demand goes. Does it go to stock or does it go to consumption? Of course, we have our models. We have our generative AI models that are quite good and which we use as a prediction for demand. And the more we use them, the more accurate they become. So I think that I cannot really say that there would be any major stock building happening as we speak. But on the other hand, we cannot be sure either.

Okay. Okay. And second question, still on the variable costs, maybe going a different way. So if assuming you have seen the energy-related and oil-related costs go up, when do you expect these to be fully visible in your P&L? Because I think in Q2, still chemical costs, for example, are not fully visible still.

It, of course, depends on what we are sourcing. I think on the logistics side, in general, I mean, there's not one rule that cuts across everything. There's the cost increase comes through quicker, while then in some chemical grades, there might be a bit of a lag. There's some of these or quite a few of these where we've seen the cost go quite a lot up are kind of index based. So therefore, it's relatively quick that the costs go up. And then it very much depends, of course, on the oil price fluctuation, how that develops over the quarter. But I would say, in general, assume a relatively quick kind of throughput on the cost side on these things.

Our next question comes from Cole Hathorn with Jefferies.

Just following up on the Other division. Just considering we've got the Forest as well as the Central Eastern European Wood divisions. I'm just wondering quarter-on-quarter, are there any moving parts that you can call out? And then on Biomaterials, deliveries were a lot lower because of the maintenance. Should we think about 2Q benefiting from higher delivery volumes as well as higher pricing? So any kind of quarter-on-quarter improvement in earnings just so that we can think about the moving parts into the next quarter?

Cole, did you mean specifically for Forest and Central European Wood Products or in general?

Specifically for the Other division, for Forest and Central Eastern European Wood Products, so for the Swedish Forest and Central Eastern European Wood Products.

I mean if -- starting with the Central European Wood Products, you are right there. We have this kind of building construction market seasonality where typically Q2 is a bit of a high season, buying ahead of building or construction then during the summer. What we've seen there, I mean, in Q1 results, which we highlighted as well is that the wood prices in Central Europe are high. There's a lack of supply and that actually hit our results in Q1. And who knows how it evolves, but that's the situation for the moment, at least. On the Swedish Forest side, it's been, I would say, in general, relatively stable, no drama.

And then it was just on the pulp side, anything we should, in particular, think about for the second quarter? Am I right, just assuming better volumes and better price?

We have in our quarterly report, we have also outlined the maintenance schedules or the annual maintenance schedules throughout the whole year. So I think that forms a good basis for your estimates about how these annual maintenance shuts might have some impact on our results development.

Hans, then I think the development of your internal actions and efficiency program is exceptionally positive. You've beaten expectations for the quarter and you deserve credit for the actions that you're taking. But I know, I realize, it's an uncertain market, but without kind of some handholding to the market of what you're going to deliver for internal actions for 2026 or some of the support on that, it's difficult for us to come out and really upgrade expectations.

So I'm just wondering if as we go through the year, we could start kind of refining your expectations for 2026, hopefully, as the market improves. And on the back of that, are there any greater actions that you're going to take around capacity rationalization to really get the supply and demand more balanced within Europe? So what can you provide us on kind of guidance for the full year on savings? And how are you thinking about capacity rationalization actions?

On the first one, I mean, if Hans, you take the bigger topic. But I mean, we are -- we've taken -- made a deliberate decision already earlier that we are not announcing EUR 100 million or EUR 500 million or billions or billions or whatever program per se and then these kind of follow each other. But we've taken a more strategic longer-term view on our own actions and said that this is how we work. This is our culture. This is also part of the P&L responsibility across 23 BUs and 6 BAs. We track it methodically internally. We have one tool covering everything we do in the company. At any 1 day, there's approximately 2,300 actions, which we monitor and we track.

And then going back to the CMD, we said that what we foresee and actually have identified the actions for the next 2 to 4 years is between EUR 500 million and EUR 700 million. And we gave ourselves a bit of leeway 2 to 4 years because it is a dynamic world. But anyway, I think that's a good guide to -- for kind of if you want to split it up into years, for instance. I mean, take that as a basis because that's how we do it ourselves as well. And then the other thing is that we'd much rather -- even if I understand the desire to kind of look into the future with exact figures, but we'd much rather show through our own actions. And so bear with us, but this is a very important thing that we continue to push day in, day out, and it's more and more becoming part of the culture of Stora Enso as well that we drive towards this EUR 500 million to EUR 700 million.

And Cole, as we said in the CMD, our strategic priorities is to lead in customer value to grow faster than the market, over 4% top line growth and to expand our margins to about 10% EBIT margin level, excluding the Forest -- Swedish Forest Assets as well as also to generate cash in order to get our net debt to EBITDA below 1. And we are fully committed to this. We have a very tangible plan to achieve this, and we are working towards this with speed and determination.

Running out of time. So maybe the...

Yes. Well, thank you very much for participating. And all in all, I think and hope it has become clear to all of you since a couple of years back that we are doing whatever it takes to maximize shareholder value. That's our ultimate job. That's our ultimate target, and we do it through improving profit generation in this company, cash flow, and we are doing it by structural means. And there, Bergslagets Skogar is a good example, and we hope to see you in the CMD on the 3rd of November. Thank you very much, and have a good day.

Hello, everyone, and welcome to Stora Enso's Q4 and Full Year Results Presentation. I'm Jutta Mikkola, Head of Investor Relations, and I'm delighted to be joined here today with our President and CEO, Hans Sohlstrom; and our CFO, Niclas Rosenlew.

We're kicking off the webcast with our clear theme, sharpened strategic focus. It reflects the work we've done throughout 2025 and the momentum we are carrying into 2026.

Today, we'll start with Hans, who will walk you through the key highlights and our strategic priorities. After that, Niclas will take you through our financial performance and we'll close with the main takeaways and what's ahead of us in 2026. Once we've covered everything, as usual, we'll open the floor for your questions.

Thank you for joining us. Great to have you with us. Over to you, Hans.

Thank you, Jutta, and hello, everyone. Great to have you with us. 2025 was a pivotal year for Stora Enso, marked by decisive actions to sharpen our strategic focus and unlock long-term value for our shareholders.

In Q4, we completed the strategic review of our Swedish forest assets, a major milestone and begun the separation to form 2 strong companies, a leading renewable materials company with a sharpened focus on packaging and Europe's largest listed pure-play forest company.

We also launched a strategic review of our Central European sawmills and building solutions operations to further focus our portfolio.

Despite a challenging environment during 2025, we delivered resilient results with a sales of EUR 9.3 billion and EBIT of EUR 528 million. We continued ramping up the Oulu consumer board line, a key part of our renewable packaging strategy throughout 2025.

This weighted on our earnings by EUR 140 million in total during the year, but strengthens our long-term position and competitiveness. Excluding Oulu, the underlying profitability improved across all business areas with Biomaterials the exception due to lower pulp prices.

Our net debt to adjusted EBITDA improved to 2.8x, supported by the divestment of approximately 175,000 hectares of Swedish forest land at a value of EUR 900 million and by our ongoing focus on cash flow and cost competitiveness.

The Board of Directors will propose a dividend of EUR 0.25 per share at the Annual General Meeting on the 24th of March 2026. Finally, we hosted a successful Capital Markets Day, where we introduced our new financial targets, strategic priorities and a clear road map for the coming years topics I'll return to shortly.

But before that, let's review how we did with our sustainability progress. During 2025, we had strong progress on our sustainability targets. By the end of 2025, we have reduced Scope 1 and 2 emissions by 61% from 2019 base year, well surpassing our 2030 targets to reduce emissions by 50%.

I'm also proud to say that Stora Enso once again has been included on CDP's Climate Change A list, highlighting our strong transparency and performance in climate actions. This recognition affirms our dedication to sustainable growth through emission reduction, renewable material innovation and advancing the circular bioeconomy.

Additionally, in partnership with IUCN, the International Union for Conservation of Nature, we completed a pioneering project that offers the forest sector a science-based framework for achieving net-positive biodiversity impact. This collaboration helps forestry operations focus on the most effective actions to reduce species extinction risks while maintaining long-term economic value.

But now let's look at the new financial targets and strategic priorities that we have set for the next years. Our strategic priorities as set forth in our Capital Market Day are clear.

We want to lead in customer value creation, grow our business, expand our margins and generate strong cash flow over the cycle. We will achieve this through our continued actions in sourcing, operational efficiency, commercial excellence, working capital and fixed cost, all underpinned by a disciplined approach to capital allocation.

Customer centricity is now at the forefront of our strategy. It drives us to push innovation, quality and sustainability across everything we do. With superior customer offering and the use of advanced technologies, we are raising the bar and setting new industry standards.

So how will this show in our performance over the cycle? First, annual revenue growth of about 4% per annum. We have a strong track record of over 5% during the last decade for our renewable packaging business. We are well invested for the next wave and we will continue to lead in innovation, quality, sustainability and operational efficiency.

Second, we are implementing our plan with speed and determination to reach about 10% EBIT margin. And importantly, this is fully in our own hands. We are putting profit and loss responsibility in place across 6 business areas and 23 P&L responsible business units, enabling determined execution of value creation actions and a strengthened focus on the core business.

Third, we will distribute 50% of our net profit as dividends. Fourth, we will take our net debt per EBITDA to below 1x through disciplined capital allocation and a continued focus on cash flow.

Finally, we introduced a new reporting structure. Our packaging businesses will be regrouped into Consumer Packaging and Integrated Packaging alongside Biomaterials and other as reporting segments. These new segments will be applied starting in Q1 2026.

As just mentioned, one of our key strategic priorities is to expand margins through business focus, a strong performance culture and systematic value creation. The last 2 years show this is working.

Despite headwinds from low consumer confidence and significantly higher wood costs, about EUR 900 million annual headwind compared to the year 2021, our sales have grown and our underlying profitability has improved.

This progress comes from our own actions that have more than offset the market headwinds during these years and the work continues.

In addition to the completed value creation programs, achieving about EUR 900 million profit impact during the years 2024 and 2025, we have identified additional EUR 500 million to EUR 700 million of profit improvement initiatives, all with clear owners and being worked on as we speak.

At the same time, the Oulu ramp up continues and weighs profitability short-term. Once at full capacity, it will add around EUR 800 million in sales and support higher margins. With these levers, we are on a clear path towards reaching about 10% EBIT margin, excluding Swedish forests within 2 to 4 years regardless of market conditions.

The message is clear. Margin expansion will come from our own focus, our performance culture and disciplined execution. We are taking determined actions to build a better company and our own future.

Let's talk about our recent innovation highlights. We grew our portfolio of premium Packaging Materials with the launch of Ensovelvet, a new uncoated solid bleached sulfide board with velvet-like smoothness on both sides.

It is developed for luxury applications such as cosmetics, perfumes and other premium consumer goods where touch and appearance are important. It also ensures excellent printability.

Ensovelvet is, of course, recyclable, supporting the shift towards circular packaging solutions. The absence of coating also means fewer materials are needed in production, resulting in a reduced carbon footprint while maintaining the premium performance expected from premium Packaging Materials.

Stora Enso's CLT solutions enabled the construction of the world's first large-scale timber data center in Falun, Sweden, and the site is now expanding with 2 new data centers. Using mass timber drastically cuts embedded carbon and accelerates construction time.

The developer, Eco Data Center is aiming to be one of the world's most sustainable data centers. By using mass timber supplied by Stora Enso, the company has created a scalable blueprint for a new type of sustainable infrastructure.

World Packaging Organization awarded Stora Enso in 3 categories: e-commerce, food and other for sustainable and innovative design.

Niclas, let's take a look at the financials.

Thank you, Hans. So let's begin with group sales development and EBIT for 2025 as well as then for the fourth quarter. Group sales increased to EUR 9.3 billion in 2025.

This was partially supported by structural changes, most notably the Junnikkala acquisition and the Oulu ramp-up. In Q4, sales declined and this was due to slightly lower board prices and significantly lower pulp prices.

Adjusted EBIT for the full year decreased. However, if we exclude the old ramp-up, actually, the profitability improved across nearly all business areas. The exception was Biomaterials, where significantly lower pulp prices weighted on performance.

And in Q4, the reasons for the EBIT decline are pretty much the same. Underlying businesses were developing quite nicely, considering the tough market and the old ramp-up was the main reason for the lower EBIT. In general, market headwinds such as lower pulp prices were offset by value creation actions.

Looking at the EBIT development for the full year. The impact of our value creation actions is clearly visible. Even with the significant decline in pulp prices, our price and mix improved by more than EUR 100 million, while volumes remained stable.

As Hans mentioned earlier, we continue to face a sizable headwind from fiber costs close to EUR 300 million this year. Despite these headwinds, our ongoing cost and value creation actions had a good positive effect.

Other variable costs and fixed costs declined by more than EUR 200 million, supported by a leaner and more business-focused organizational structure. These actions have strengthened our ability to navigate market volatility and deliver a more resilient performance.

The main drag on earnings for the year came from Oulu or the ramp-up of Oulu, which had a negative impact on EBIT of roughly EUR 140 million, again for the full year. While Oulu weighs on short-term profitability, we do remain confident in the long-term value and industry-leading quality this investment will bring once the line reaches its full potential in 2027.

If we then move on to cash flow, despite the challenging market environment, we managed to safeguard profitability and improve cash generation. Cash flow after investing activities continued to be positive as expected following the gradual completion of the investment phase in Oulu.

As we now become more disciplined with our capital allocation, combined with ending the heavy investment phase, we expect cash flow after investments continue to improve.

So on that note, let's take a look at the net debt. Net debt decreased by almost EUR 800 million in the third quarter, driven by the Swedish forest asset divestment and remained stable in the fourth quarter. Our net debt to adjusted EBITDA ratio is now 2.8x.

Operating working capital remained -- also remained stable at 7% of sales and we intend to maintain it at these lower levels and reduce it further whenever possible.

So let's take a look at our segment performance. Starting with Packaging Materials. During the quarter, we conducted maintenance in some of our main sites. In addition, we continue to ramp up the new Oulu board machine.

Despite this, profitability was preserved, thanks to good value creation activities and strong customer offers. Sales decreased driven by slightly lower consumer board prices and adverse currency effect from a weaker U.S. dollar. Adjusted EBIT improved slightly year-on-year despite a EUR 31 million negative from the ramp-up in Oulu.

In Packaging Solutions, we delivered a positive result despite ongoing market challenges. Sales increased slightly, driven by higher sales prices from improved product mix and an increase in sales volumes.

Adjusted EBIT increased year-on-year, supported by higher sales and the good momentum with value creation actions. So in summary, despite persistent overcapacity, actions to enhance product and customer mix, combined with continued cost efficiency improvements helped protect margins.

Moving from Packaging to Biomaterials. In Biomaterials, the challenging market conditions continued. Demand for softwood and hardwood pulp was weaker in both Europe and China.

Sales and adjusted EBIT decreased due to lower sales prices and volumes and adverse currency movements. However, intensified value creation actions such as cost reduction measures partly mitigated the negative effect.

In Wood Products, market continued to be subdued with high raw material costs and low construction market activity. Sales increased mainly due to Junnikkala volumes and higher sales prices, both in classic sawn and building solutions products.

Adjusted EBIT improved as the increase in raw material costs was more than offset by higher sales prices and value creation actions. Product curtailments were implemented to align with challenging market conditions.

Finally, in Forest, sales were stable with no material differences in wood prices or volumes. EBIT decreased primarily due to the divestment of the 12% of Swedish Forest Holdings at the end of the third quarter.

The fair value of the group's forest assets increased slightly to EUR 8.5 billion or EUR 10.75 per share. The results demonstrate strong operational performance within our forest assets and wood supply operations.

So with that, I hand back to you, Hans, for concluding remarks.

Thank you, Niclas. As we enter 2026, we expect market conditions to remain subdued and volatile, shaped by ongoing macroeconomic and geopolitical uncertainty. Our priorities are clear. We will continue to execute our strategy, drive proactive, systematic and determined work across the whole group.

We continue to improve profitability, cash flow and cost competitiveness through activities related to sourcing, operational efficiency, commercial excellence, working capital and fixed costs and maintain a disciplined approach to capital allocation.

The demerger and listing of our Swedish forest assets will be a key focus as will the ongoing strategic review of our Central European sawmills and ramping up of our Oulu site.

I want to thank all our employees, customers and partners for their dedication and resilience during this transformative year. Together, we are building a stronger, more focused and more sustainable Stora Enso. Thank you for listening and we are now ready to take your questions.

[Operator Instructions] Our first question will come from Charlie Muir-Sands with BNP Paribas.

I just had a couple of questions on the Packaging Materials segment on both pricing and on costs. Firstly, on the pricing side, I wonder if you could talk about the environment generally.

We've seen obviously indexation reports suggesting that FBB prices are coming down a bit. One of your peers the other day also flagged pricing pressures in the liquid packaging board space, which is a grade that's obviously not price reported. So yes, firstly, on the pricing side.

And then on the cost side, can you talk about what scale of tailwind you might envisage seeing from the fall in wood costs that we're starting to see in Finland and perhaps trickling over into Sweden? And when you would expect Oulu to no longer be a drag?

Yes. So first of all, when it comes to liquid packaging board, we have multiyear agreements, which basically meant that our prices have somewhat improved for this year compared to last year.

When it comes to cartonboard, you are right that following statistics, there has been some slight decline in prices there. And then as you also know from public sources, there has been price increase announcements in containerboard, in testliner, also in Europe happening lately.

Then on the cost side, I mean, yes, following also here public statistics, wood costs in Finland and Sweden, especially pulpwood, have come down throughout the latter part of last year. And -- but I don't want to take any stance on any predictions or forecasts here how the things will play out.

Regarding Oulu, we have guided now for the first quarter still a negative EBIT impact between EUR 15 million and EUR 30 million on an EBIT level. And we remain confident there that we are continuing and progressing the ramp-up in order to be then fully ramped up for year 2027.

But for Q2, do you anticipate Oulu still being a drag? Or should this be the last quarter?

Well, we don't give any further guidance there. I would say that the ramp-up is progressing. Quality is excellent. The feedback from customers is really good and quality properties, even if we had high expectations, having even exceeded our expectations in some cases.

And finally, sorry, just I saw that you're guiding to much lower income from sale of emission certificates in the year ahead. Which segments would those headwinds year-on-year apply to?

It concerns mainly 3 of our business units. So it's Skutskar, which is pulp in Sweden, then it's Fors in Sweden, which is cartonboard and then it's also Enocell Uimaharju in Finland, which is pulp. So it's mainly the Biomaterials segment.

Our next question comes from Lars Kjellberg with Stifel.

I appreciate you don't want to forecast wood cost. But if you kind of -- where we are today in Finland in particular and the pressures we see in Sweden, if they were to stay where they are, when would you start to see a positive impact from that?

I'm also hearing that wood costs in Poland has gone up. Can you provide any color on that, if that is indeed the case?

I also want to question a bit about currency because, of course, both the Swedish krona and the euro are very strong. You had hedges, of course, right, but what sort of potential headwind would that be?

And the final one, I'll just stick with consumer board, you have for a long time spoken to the pressures and imbalance in the market and soft demand. So the question is, as a big producer of consumer board, what sort of actions are you taking to rebalance the market and to get away from that pricing pressure?

I appreciate closing assets is not your priority, but are you thinking about meaningful curtailment of capacity until demand resurfaces?

I'll take -- I'll take the first one. So the wood cost up or down, I mean, I guess the rule of thumb is 3 to 6 months. So first, it goes into the wood yard and then it goes into production. So 3 to 6 months depends, but that's kind of the kind of rule of thumb, which you could use.

And then your question on consumer board. So yes, we have also taken some curtail -- or curtailed our capacity to some extent. I would say the primary actions here in a situation of low operating rates and is to be the most cost-efficient, to work on your cost and efficiencies and be closer to your customers than ever before and produce the best possible quality of product and service. That's the way to manage in this kind of circumstances.

You also had a question about the currency exchange rate, you want to comment...

Yes. Yes. I would say no -- nothing particular there. I mean, dollar has, as you know, been a headwind for us, the weaker dollar, given that quite a significant chunk of products, not least pulp is kind of dollar priced.

And then on the Swedish krona, of course, we have quite significant operations in Sweden. So a kind of stronger Swedish krona means more costs also. But I would say just in general that the dollar is the kind of main swing factor here.

Just a follow-up, I also asked you about Polish wood costs, if you have any color on that? And if you can share with us what sort of operating rates you're running at in consumer board in those?

Yes. So first of all, the Polish wood costs, we actually consume very little pulpwood in Poland because we are primarily using recycled fibers there to produce testliner. So it's not that relevant for us when it comes to log costs in Central Europe.

They have been increasing, but so have also the price of timber and sawn goods. And what -- and you had some other question there, a follow-up question. Yes, operating rates. Well, we are not commenting further on the operating rates.

Our next question comes from Pallav Mittal with Barclays.

So 3 questions. I'll take it one by one. So just following up on the first question around liquid packaging board. So your peer -- one of your peers has highlighted a difficult demand dynamic as well.

And based on what we can see, one of your largest customers over the last few quarters has also highlighted a difficult volume backdrop. So just wanted to understand the demand dynamics. Clearly, your comments on pricing, we agree that it is a multiyear agreement and it is going up. But what are you seeing on the demand side of things?

Thanks to the multiyear agreements we have in liquid packaging board with our key customers, we see positive development both in terms of volumes and price.

Okay. And as you have now highlighted for the last few quarters that the market-related movements have been offset by your own actions. So if you could just help us understand, I mean, as we think about 2026, lower wood cost, et cetera. So if you were just to like give us some guidance in terms of those 2 buckets, do you still expect the market-related movements to be a significant headwind and then offset by some of your own actions, which you have said EUR 500 million to EUR 700 million for the next 3 years?

Yes. I think on the own actions, the teams are continuing the good work and certainly we'll continue during 2026 as well. What comes to wood cost, as Hans said, we just don't want to predict or comment on that. But on the own actions, we'll certainly continue to work on that and there's a good momentum.

And then lastly, just on the EU testliner pricing that the industry is trying to pass through. Any comments on how customers are reacting to it because now we are in the first week of Feb and it was expected to go live on the 1st of Feb? And do you think any of it will actually pass through given the cost environment and the demand backdrop?

Yes, I don't want to speculate here, but I think there has been broadly price increase announcements and there is a broad price increase attempt now in the industry and it's, of course, badly needed by the industry.

Our next question comes from Linus Larsson from SEB.

First off, a follow-up question on Packaging Materials. The price realization quarter-on-quarter in the fourth quarter was quite negative, minus 7% or so, from what we can see.

Could you please just explain that mix effects, real price changes, FX, how that all adds up? And then also, please, if you could just clarify what you said previously on your multiyear liquid packaging board contract, what does that setup entail for 2026?

Can you please just clarify, have you had renegotiations going into 2026 for a portion of that? And what's the nature of the agreements in place? Do they imply price hikes or price declines at the start of 2026? So just directionally, if you could just please clarify that?

So first, your latter question about liquid packaging board. So with most of our key customers, we have long-term multiyear agreements in place, implying improved pricing and volume for this year, but not for all. I mean, there are also customers where we have annual negotiations. But generally speaking, for the majority, there are multiyear agreements in place.

And then when it comes to the Packaging Material quarter-on-quarter price development, so Q3 into Q4, so there was especially in the area of containerboard, some price reductions as we can see from public sources, resi and other sources as well as also in cartonboard. So that weighted on our average prices for Packaging Materials in Q4 compared to Q3.

Got it. And then maybe a second question on forestry and the increase that we saw in forest book values in the fourth quarter. And you did write about it in the report, but if you could just expand a bit on that, what drove the increase? And also any updates, if there are any on the planned spinoff, please?

Yes. So the increase was primarily driven by the stronger Swedish krona. So FX was the prime driver. Also kind of the underlying asset, there was some increase, but the EUR 200 million or so increase we saw was mainly driven by FX.

And then what comes to the spin, progress being made every day. Separation, a lot of activities there. So I would say on track and making good headwinds or good progress there.

Your next question comes from Ioannis Masvoulas with Morgan Stanley.

Excellent. Excellent. So a few follow-ups from my side. Just the first one, going back to liquid paperboard. Across your entire order book, if we think about '26 versus '25, is it fair to assume a low single-digit improvement in pricing?

And related to this, do you think you're gaining market share in either Europe or Asia, as that will explain some of your comments on volume trends versus some of your peers?

Yes. So in liquid packaging board, we have some slightly increased pricing for the majority of our customers. And when it comes to market shares, I don't want to comment on those.

Okay. And maybe one more on Oulu. So I appreciate you wouldn't like to provide full year guidance on potential ramp-up costs. But if we look at Q4, you account for about EUR 31 million impact.

And for Q1, you're talking somewhere between EUR 15 million to EUR 30 million impact. So at the high end feels like there is not much improvement or a reduction in the ramp-up costs. Could you talk about some of the challenges there? And could you also clarify whether Oulu was EBITDA breakeven because that's something you mentioned in the past, but I didn't see that in today's release in terms of the Q4 run rate?

Yes. So first, Oulu was EBITDA breakeven in when running full during month of October. Then towards the end of Q4, we had some planned shutdowns and also some curtailments.

But as we had guided before, we reached EBITDA breakeven in the month of October during, let's say, normal full run month. And when it comes to the first quarter, I mean, we are continuing the ramp-up as planned with excellent customer feedback and quality achievements.

And of course, I mean, we need also to take into consideration that the cartonboard prices, as we know from public sources, are somewhat down. So with a certain impact also here. Plus then, of course, we have to consider also other things affecting then the weighting on the Oulu profitability during the first quarter.

Our next question comes from Detlef Winckelmann at JPMorgan.

Just a quick one from me just on your pulp wood costs. Obviously, we've seen them come down quite drastically in the last, call it, couple of quarters. I'm hearing some conflicting views.

I just want to hear your thoughts on whether this is a supply chain change or a demand-only driven price decrease. We're hearing from a handful of people, independent experts that maybe supply and wood being harvested is actually up. And at the same time, I'm hearing the exact opposite from someone else. So just would love some clarity there, if you can.

Well, yes, do you want to take it, Niclas?

Yes. I mean, sure, there's multiple factors, but to put it simply, the view is more demand. So demand has been lower. Some of the industry players, for instance, in Finland have been -- Finland have been curtailing production during the second -- latter part of the year.

Our next question comes from Cole Hathorn with Jefferies.

Just like a follow-up on the wood cost side of things. You provide some helpful guidance for a 10% move in wood cost for the whole of Stora, which includes your sawn timber business as well as obviously your Latin American operations.

Is there a guidance just so that we can think about the sensitivities for a 10% move just in the Nordic wood prices, just to understand the quantum? That's the first question.

The second is thinking about the liquid packaging board of Beihai and given there's a number of capacity that's ramped up in China, just like any commentary that you can provide about profitability of your Beihai and China operations?

Yes. So first of all, our Beihai operation is doing very well. Also from a profitability perspective, it is one of the world's, if not even the world's most efficient board -- consumer board production line according to board machinery manufacturers statistics.

So doing very well indeed. Excellent quality. I mean, we are competing in the high-end, highest quality liquid packaging board segment and consumer board segments in China, where we have an opportunity also to differentiate.

And then when it comes to the wood costs, as you can see in our report, a 10% wood cost decrease would have a EUR 238 million impact on annual -- positive impact on annual EBIT. We haven't broken down that specifically for the Nordics, but the clear majority of this is the Nordics. So not all of it, but the clear majority.

And then maybe just as a follow-up, Niclas, your CapEx numbers come in nicely at EUR 550 million. It is lower year-on-year. It's the first time you're getting towards depreciation or below. I'd just like to think about how you're thinking about CapEx.

And then, Hans, one for you on the EUR 500 million to EUR 700 million savings. Is there any color that you can give on what might be contributed in 2026? Because there are a number of moving parts this year.

We do have lower prices. You've got potential positives from the Oulu drag being less negative. You've got the positives from potential wood costs, but the bucket that's missing is your own internal actions and efficiencies. Any quantum of that EUR 500 million to EUR 700 million that might be achieved in 2026 would be helpful.

Yes. So on the CapEx, we've done a fair amount of work on CapEx in latter part of last year and we discussed some of it in the CMD as well. And of course, one part of it is the, as we call it, the end of the heavy investment phase, which is primarily Oulu, but we've actually gone beyond that.

I mean, we've looked a lot at where do we get returns, what type of investments are better, which ones are worse and so on and so on. A lot of categorization of our different assets, where do we invest, where do we not invest.

So what you see now in the EUR 550 million guidance is kind of a summary, the outcome of this work. And it's -- in the end, it's all about discipline and returns. And I'm sure we'll learn more during this year and then we see how it moves beyond this year also. But the theme is clearly now let's be disciplined and let's ensure good returns on those investments we make.

And when it comes to the -- our own profit improvement actions, in the CMD, we explained that during 2024, we -- and then the 3 first quarters of 2025, we have achieved EUR 850 million of annual P&L impact and we are now at roughly EUR 900 million after the fourth quarter.

And we also said that there is more to come. Currently, we have in the pipeline, EUR 500 million to EUR 700 million of projects and initiatives from a P&L impact standpoint.

And as we said in the CMD, 2 to 4 years, 2 years if we also get some market tailwind. So in order to achieve about 10% EBIT margin level, so 2 years, if we get some market tailwind and 4 years if we have a continuous market headwind.

So that's about the guidance I can give. Of course, the more you do these cost savings and streamlining, the harder it also gets. That's also good to remember.

Yes. And just to give you some additional color because it's a good team, nice team. So for instance, what we are looking at for the moment is fixed cost? How do we work efficiently within Stora Enso. And then also procurement is another area we are looking into as we speak. And there is potential. So it's quite positive and good.

Our next question comes from Andres Castanos-Mollor with Berenberg.

It would be a follow-up on CapEx, please. How much of that EUR 550 million is allocated to forest? And how would our run rate of an ex-forest company look like for maintenance CapEx?

Now I'm actually looking at Jutta here across the table. How much of that is forest? I can't remember by heart actually.

Right. It's not that much biological assets to some extent, but there also maturity would be actually Latin American CapEx. So it's not that much that goes into the forest.

So very, very little into the forest company as such.

There are no further questions. I shall now hand back to Hans Sohlstrom; and CFO, Niclas Rosenlew, for closing remarks.

Thank you very much, all, for your -- for taking time and for your interest. As you can see, we are moving forward with speed and determination to improve our financial performance and to strengthen and build a better, more sustainable and more valuable Stora Enso.

During last year, we have sharpened our strategic focus. We have defined our strategic priorities of leading in customer value, putting the customers in the center through innovation, sustainability and service and quality.

We are looking to -- also to grow faster than the market, over 4% per annum. And we have a track record within renewable packaging of growing above 5% during the last 10 years and we are well invested to materialize this growth.

We are expanding our margins to the well above 10% EBIT margins through our own actions regardless of market circumstances. And then last but not least, we are generating cash through disciplined capital allocation. Thank you very much for your interest. We are moving forward with speed and determination. Thank you. Bye-bye.

Hello, everyone, and warm welcome to Stora Enso's Capital Markets Day 2025 here in London. And to all of you joining us via the webcast as well. My name is Jutta Mikkola, and I'm the Head of Investor Relations here at Stora Enso. And with me today on stage will be our President and CEO, Hans Sohlstrom; our CFO, Niclas Rosenlew; and our business area leaders, Andreas Birmoser, Carolyn Wagner and Johanna Hagelberg.

I'm very excited about today and our agenda. And like the high-rise building, we are here today, Stora Enso is also reaching high and looking forward. So first, let's discuss the outcome of the strategic review and outline next steps. Then our focus will be on evolving Stora Enso and our strategic priorities for the coming years. We are also changing our reporting structure, which we will explain as well as our new group financial targets and the way to get there. You will -- then we will -- in the second session, we'll be rolling up our sleeves and taking a deep dive into the business. You will get insights into what drives our operations and sets us apart in the industry.

Please be active and ask questions, especially during the Q&A sessions as well as during the breaks and lunch following the event. Our group leadership team is here as well, and they are waiting to have discussion with you. [Operator Instructions] So as I said, I'm super excited for today. We have a lot to share, so let's dive in.

[Presentation]

Good morning, ladies and gentlemen. Really great to see you all here, and welcome also everyone joining through the webcast. This is an important day for Stora Enso and hopefully also for all of you. I'm Hans Sohlstrom. I'm the President and CEO of Stora Enso. Today, we are going to talk about the road map for the future, how we are building on strong foundations, how we are strengthening our business focus, sharpening our focus and how we are taking determined actions to build a better performing Stora Enso and maximize shareholder value.

But before starting, we know that business success is all about people and it's about leadership. And I'm so proud to have with me here our group leadership team and would like to introduce them one by one so that you can reach out to them during the breaks or during the Q&A sessions and ask questions. It's a great team, hard-working, ambitious, and we are working hard, but we also have great fun together.

So let's start here by the introduction. So first of all, our CFO, Niclas Rosenlew. Then we have our Executive Vice President in charge of People, Legal and General Counsel, Micaela Thorstrom. We have our EVP, Strategy and Sustainability, Tobias Baarnman. And now moving to the lower row here with the Executive Vice Presidents with the P&L responsibility being in charge and accountable of their business areas. We have first Cartonboard, Andreas Birmoser. Then we have Food Service and Liquid Board, Markku Luoto; Containerboard, Lars Volkel; Packaging Solution, Carolyn Wagner. We have Biomaterials, Johanna Hagelberg; and Wood and Energy, Pauli Torikka. And last but not least, we also have appointed the President and CEO for the new forest company, and he's also here with us today, Tuomas Hallenberg.

Good. Let's move on. We have 2 objectives of today. We are going to share more information about the demerger of our Swedish forest assets as well as then also to affirm Stora Enso's strategic focus and way forward, the road map to achieving the updated financial targets that we have published yesterday. So where are we today? Stora Enso is a leading -- a global leader in renewable materials. Our purpose is to replace fossil products, nonrenewable materials with renewable products. Everything we do is based on wood raw material, renewable raw materials and replacing the fossil alternatives, plastics, cement and other.

And our ultimate target is to maximize shareholder value. The most important KPI for me, for our group leadership team is total shareholder return. And the way we are maximizing shareholder return is really through high customer value based on innovation, quality, sustainability and with efficient, integrated cost-competitive operations. Our corporate culture, we call it our positive performance culture is based on 4As. And I bet if you ask any one of our 19,000 employees today, what are the 4As, they can all speak about the 4As of ambition, of agility, analytical approach as well as accountability and what it means for them and their work with their teams.

So this is a snapshot of Stora Enso today. And I'm truly proud of the fact that Stora Enso is a part of solving some of the biggest challenges on planet, climate change. Last year, our products helped avoid 14 million tonnes of CO2 emissions through our renewable products, replacing plastics and cement and other fossil materials. Today, packaging is representing about 60% of our total sales, and we have leading market positions in all our businesses, and we'll deep dive into this throughout this day and these presentations.

So how have we arrived here? Well, in the beginning of this millennium, actually, 80% of Stora Enso's roughly EUR 10 billion sales, 80% was printing papers. So newsprint, magazine papers, copy papers, and we all know about the declining printing paper business. During the 10 years back, 2015, still printing papers was the biggest business within Stora Enso, representing almost 40% of our turnover. It was bigger than packaging at that time. But since then, we have systematically invested in growing our packaging business.

And most recently, we have also made some major investments here through the acquisition of De Jong Packaging as well as also our investment into Europe's most modern and efficient consumer board line in Finland that we are currently ramping up. And thanks to this systematic work on growing in packaging, where there are good growth prospects also for the future. In fact, our packaging business growth throughout the last 10 years has been above [ 4% ] per year.

But now we are taking the next step to sharpen our focus even further. We have divested at the end of September 175,000 hectares of Swedish forest with 2 objectives: to strengthen our balance sheet, but also to confirm the value of forest land. We sold exactly at our book value, meaning an enterprise value of EUR 900 million. And we are now taking the next steps with the demerger of our remaining forest in Sweden, 1.2 million hectares valued at close to EUR 6 billion, demerger into a separate stock-listed company with our current owners as the owners of this company. And then also, we have announced that we are starting a strategic review of our Central European wood products businesses, which are non-synergistic with our core Renewable Packaging business.

So I'm going to quickly talk through about the demerger, what, why and when. Well, we are creating 2 champions in their field. Stora Enso, the renewable packaging -- renewable materials company with a strong and increasing focus on renewable packaging, where we are maximizing profitability through leading with customers through our products and innovation and sustainability as well as operations that are efficient and cost competitive. The main targets for Stora Enso, the renewable materials company is, as published yesterday, to continue to grow as we have done during the last decade, at least 4% per annum and to generate an adjusted EBIT margin of above 10%. And we have the road map how to get there. We are convinced that we can deliver on these targets.

The business is global. We are serving blue chip customers all around the world, some of the most valuable brands who are operating in 60 countries globally. The forest company is about value appreciation and growing the value of the company through constantly developing the assets in a sustainable way and also to develop additional new revenue streams. Looking at historical facts, and I'll deep dive into this later on, the value appreciation during the last 3 decades has been 7% for Swedish forest assets. And the current value of these assets is close to EUR 6 billion.

So why are we doing this? Well, these 2 businesses, they have distinctive business dynamics, characteristics, and they also require distinctive business strategies for maximum value creation. And this is also the way how we can unlock not only the full business value by having a full focus on the very distinctive different businesses, but also to unlock the value for our shareholders.

So when will this happen? The demerger will take place during the beginning of 2027. We will keep you updated, of course, throughout the whole process with our proceeding in this process. And during this time, we have the possibility and opportunity to carry on and carry out all the necessary preparations, but also to demonstrate the strength and attractiveness of both businesses. And we are organizing a Capital Market Day in a year or so during next year's time, focusing fully on the forest company. The financial targets, the strategy, the business plan for the forest company.

So let's deep dive into the forest company. So what makes this an attractive asset for investors and owners? Well, looking at Sweden and forests in Sweden in general. So these are not only about our forests, but all forests in Sweden. Swedish forest assets have yielded a 7% value appreciation since 1990, over 3 decades. So forest is not only a sustainable asset as such, it's really a value engine. And if we break down now the 7% into pieces, we can see that during the last 3 decades, land appreciation represents 4.5% per year value appreciation. And in a way, it's natural because there is no more land produced. So land is a scarce resource.

Then there is also more growth in Swedish forests than harvesting. And this means that the standing stock, the biological growth of forests in Sweden has exceeded harvesting and added 1% per year additional value through the growing standing stock. And in fact, this 1% is accelerating, thanks to new sustainable forestry practices. And then we have, of course, the wood harvesting, which has historically, since 1990, given a 1.5% return, about 3% of the standing stock has been harvested. And the margin for this business has been well above 50% historically during the last 3 decades. But there is increasingly new non-harvesting-related revenue streams that becomes more and more important all the time. Renewable energy like wind energy, solar parks as well as also recreational income from recreational use or other gravel and other land development and optimization.

So what makes our forest in Sweden especially attractive within this landscape? Well, there is a simple answer, and that is location. Our forests are located optimally in the mid-south part of Sweden. where the productivity and the growth is significantly higher than in other areas in Sweden or North. Stronger and better productivity than, for instance, our main other forest-owning peers. And on top of this, in this region, in that mid-south part of Sweden, where our forest 1.2 million hectares are located, there is also an especially strong concentration of wood consuming forest industry. In fact, the forest industry in this proximity, in this region is consuming 40 million cubic meters of wood annually.

Our standing stock on this 1.2 million hectares is 130 million cubic meters, and we are harvesting over 3 million cubic meters per year and meaning that harvesting is still clearly below the growth. So the standing stock is increasing 1% per annum, but this is something that also can be accelerated. And on top of all of this, there are also very strong sustainability features of our forests. Our forests are sequestering, binding 1.5 million tonnes of CO2 every year. And this gives us also opportunities for new revenue streams as we move forward.

In addition to this, there will be an 18-year wood supply agreement in place between the forest company and Stora Enso. It will be with reducing commitments, gradually reducing commitments throughout that 18 years period. And this enables to provide to the forest company stability and predictability for the first years, for the first period, but then also flexibility to gradually build up new customer relationships and new businesses. The pricing will be market price based, and it's really important for us that this will be an independent company operating on market practices, so that we can really build an independent leading forest company.

But then it's not all about harvesting. It's also about those new incremental revenue streams. And I'll give you some examples here. I'm truly proud of the fact that within Stora Enso forest, we have developed a world-leading digital tool. Nobody else has this. We call it Precision Forestry. And it's a digital model that is using artificial intelligence to all the time get more and more accurate, combining our data on our own forests with satellite data and laser scanning data on other forests. So we have been able to create a very accurate digital model of all forests, not only our forests, but all forests that exists in the Nordic countries and in the Baltics.

And what's the benefit of this? Well, we have already with this model that gives really granular and exact data, we have managed to find in our own forests, tens of thousands of hectares more productive land. In addition, we can also protect the environment more effectively by identifying on a very granular level, valuable natural habitats. So it's all about forestry, but being much more data-driven, much more precise. And using this tool, we can improve our productivity, our income, but at the same time, also protect valuable natural habitats much more exact. We can even predict with a high level of accuracy where, for instance, certain species, endangered species are living or -- so we can also see that we are proactively taking this into account when we're, for instance, developing our forestry plants.

Then we have renewable energy as another big opportunity for us. Our strategy when it comes to renewable energy is to develop ready-to-build projects because we have the land and we identify the optimal land for wind parks, solar parks. We apply for the permits, which can be very long processes, taking several years. And we also organize the land connections, build the roads, grid connections. So we have like ready-to-build projects. And then we sell these projects with the permits, with the infrastructure to, for instance, energy companies who are specialized in operating wind parks or solar parks. And we have plans in place now to commercialize 10 terawatt hours of wind park projects. But this 10 terawatt hours is only a fraction of the total potential we have on the 1.2 million hectares of land. There is many times bigger potential, but it takes time to develop this. So many of these revenue streams comes then fairly long into the future.

Then we have the land value optimization. We constantly already today, we sell land with high set aside areas, and we buy land, which are more fiber-rich and more productive. Also through land planning and zoning for real estate, housing, industrial use, we can significantly increase the value of our land areas. And then last but not least, carbon storage. This is clearly a new emerging market since about 1 year back. With all the carbon sequestration in our land area, with all the carbon credits that we are -- that we have and new ways of actually capturing carbon without affecting forest productivity. For instance, by rewetting dried peatlands, which don't produce any wood in any case, by rewetting peat land, scientists have concluded that we can tie up 250 tonnes per hectare of carbon on these rewetted peatlands.

And there are today more and more multinational technology company, leading companies that you have all heard about, who are in contact with us, asking us to sequester to bind carbon for them. They are prepared to pay to us so that we capture carbon on their behalf. And this is an interesting emerging business and new future revenue stream that we are going to build on a new market with new opportunities with all the data centers all around the world and all the energy consumed for data centers. The technology companies are eagerly looking for carbon sequestration, and they are prepared to pay to someone like us who can provide that service and also the evidence of their carbon being captured.

So let's now move into Stora Enso, the renewable materials company with a strong focus on packaging. First of all, let's start by acknowledging facts. I mean, our profit, our cash flow is far too low. We know that, and we are working on it every day to improve profitability and cash flow. Since 2023, we have encountered an unusually challenging operating environment with record high wood costs, especially in the Nordics, with geopolitical uncertainty, which has fueled uncertainty among consumers. And what is really driving our demand is consumer spending. So with lower consumer spending, also demand is lower. And at the same time, we have gone through an unusually heavy investment phase. But since 2023, we are taking determined actions to improve our cash flow, to strengthen our margins, expand our margins and improve our profitability.

I'll give several examples about this later on during this morning. And we will continue to focus on our 4 strategic priorities, which is to lead in customer value through customer-driven innovation, sustainability and quality to continue growing faster than the market through our cost-efficient assets through our offering and our collaboration, winning with customers. We will continue focusing on expanding our margins through our business and customer focus as well as through our positive performance culture and our systematic way of working on value creation initiatives, which you will hear more about later on. And we will focus on generating cash with high conversion ratio as well as disciplined capital allocation. Also more about this as we move forward.

So these are our 4 strategic priorities. They have been for 2 years, and they are going to be also for the years to come. These 4 strategic priorities are built on 5 strengths or positionings that I want to explain and open up more to you in the next. So first of all, all the markets we are operating in are growing, driven by strong sustainability drivers. We have exited the declining printing paper business and everything we have now in our portfolio, there is long-term growth driven by consumer preferences and sustainability drivers.

We also have leading market positions in all the businesses we operate in. And we have a broad, very strong differentiated product portfolio, which is based on customer-driven innovation. And our assets are well invested. We have strong assets and cost competitive asset base. And last but not least, we have now during 2 years, the proof that we can -- through a continuous improvement culture and through this performance culture, we can continuously find ways of reducing our costs and improving our competitiveness.

And I'll walk through these 5 areas one by one with you here now. First of all, the global packaging industry is transitioning, driven by new and emerging customer preferences. Today, globally, over half of all consumers, they care about the package. They care about the recyclability of packages. They care about the carbon footprint of packages. They care about the renewability of packages. And just to give an example, today, 1/3 of all food in the world is being wasted, 1/3. This means 1.3 billion tonnes of food goes to waste every year in a world of scarcity where people don't get enough food. We are especially good in food and beverage packaging. We can -- we have solutions to provide safe food packaging solutions and to preserve food also in right-sized packages from production to the end consumer.

So we are, in fact, contributing to reducing food waste through our solutions. And we are extremely well positioned actually to gain from these changes in the global packaging market. In fact, all research shows that renewable packaging materials will continue to gain market share from plastics. And if we look at our main 2 markets where we operate in Packaging Materials, so consumer board as well as virgin fiber-based containerboard, this market -- this global market is predicted to grow by 12 million tonnes of annual consumption, annual demand in the next 5 years. And within these segments, especially the food and beverage packaging, which is really our core, is having the fastest growth rates, well above 3%.

We have also leading market positions in liquid packaging board, we are clearly the world's largest producer in cross-laminated timber also as well as in unbleached specialty pulps. And we are a European market leader in other virgin fiber-based cartonboards and boards as well as in fluff pulp and sawn wood. And in containerboard, we have regional leading positions. We are serving some of the leading brands in the world. They are our customers, and you will get many examples here as we listen to Andreas', Carolyn's and Johanna's presentation.

And why do they choose us as their partner? Well, because we help them to become more attractive on the shelves in the retail stores. They want to have sustainable, recyclable, renewable packaging solutions, which looks attractive, which appeals to consumers and make consumers choose their product over other products. So we can help these customers to differentiate. We can help them also through lightweighting to save costs compared to competing board grades, for instance, or packaging solutions. And we can also help them to significantly reduce the carbon footprint, which is so important for these brand owners. They have carbon commitments also and climate commitments.

We have cases where we have helped our customers reduce their carbon footprint by 70% by our -- moving to our choices instead of alternative packaging materials. Customer-centric innovation is really at the heart and in the core of what we are doing. We come up and we launch a new product to the market every month. And if we look at this customer-centric innovation, I'm so happy by the fact that today, 16% of all our packaging material, all our product board sales actually comes from new products that have been launched into the market during the last 5 years. And this is accelerating. We are investing more than ever before in customer-centric innovation when it comes to our packaging business.

And I have here 2 examples for your -- just as examples, and you will hear many more examples later on. AvantForte is by far the best-performing brown and white top kraftliner with the best strength weight ratio in the whole world. And this is especially appealing to packaging needs, transport packaging needs where you have especially demanding conditions, like, for instance, fruit and vegetable producers who are operating in humid conditions and who have global supply chains, so logistics spanning over the whole world. We have so many cases where AvantForte is by our customers, actually the only choice and also the most cost-efficient choice, thanks to the strength weight ratio. We have New Tambrite as another example, which has the best stiffness to weight ratio among all cartonboard grades globally, which means that it's a preferred choice. It's something we have developed together with our pharmaceutical customers, and it's their preferred choice.

So looking at our product offering and our product range. We also have the most complete, the broadest product offering in the industry. And this is a strength when building partnership with our customers, the brand owners and the converters because we are their one-stop shop. Whatever their renewable packaging needs are, we have it, and we can offer it to them. So this deepens our relationships and strengthens our partnership with customers.

But there are also other advantages around customer-centric innovation because we have the experience of producing all these grades. There is also cross-fertilization of ideas and innovation, which makes us even stronger in coming up with new product offerings. And last but not least, this also gives us strength when it comes to our asset utilization. So depending on trends, depending on market and customer needs, we can also optimize the asset utilization over the whole platform.

So what about our assets? Well, we have the biggest production lines and also among the youngest production lines, meaning the lowest technical age. So we have well-invested modern technology, and we have big production facilities, which gives economics of scale. And in fact, when you look at our board production mills and units, 75% of our machines production lines are within the first and second quartile in cost efficiency, so on the cost capacity curves. And we are integrated. And that's a big advantage also for -- in the forest industry and in the board production. What you need in order to be cost efficient is that you need those big, modern board machines. And on site, you need to have that integrated pulp production. And we have, in fact, out of our 6 million tonnes of board production capacity, paperboard production capacity, we have 5 million tonnes of on-site integrated pulp capacity.

Most of our board mills, almost all of them and most of our capacity is fully integrated backward into pulp production on site. And on top of that, we have sawmilling capacity on-site or close by. And this is extremely important, thinking about wood procurement as well as cost-efficient raw material supply. Because, in fact, about half of the logs going into sawing ends up in chips and saw dust, which is cost-efficient raw material for pulping and board making. So you cannot really be cost efficient without having these 3 components, preferably everything on the same site.

In containerboard, we are, of course, in virgin fiber containerboard, backward integrated like in cartonboard into on-site pulp making and sawmilling, but we are also backward integrated in terms of our recycled fiber-based test liner production into recovered fiber or paper -- recovered paper collection as well as recycling facilities. And we are also forward integrated into corrugated box making, because this is a very local business, and it's important to be competitive here that you have testliner production and corrugated box production close by. And Carolyn will open up this later on in her presentation.

On top of this, we have 2.5 million tonnes of market pulp capacity. And more than half of this 2.5 million tonnes is among the world's lowest cost, most cost-efficient eucalyptus capacities in South America. And it's a clear trend in Packaging Materials that eucalyptus pulp is more and more gaining share. We are doing that actively. We are using more and more eucalyptus pulp in our recipes, in our mills because it is a cost-efficient solution. And for instance, Veracel, if we look at our capacity in Veracel, with Oulu fully ramped up, Oulu will consume 250,000 tonnes of Veracel eucalyptus pulp as a part of their furnish together with CTMP and some other chemical pulp. And that means that we will consume 75% of Veracel's capacity internally in Oulu, in Beihai, China, in Fors in Sweden and so forth.

Enocell, Skutskar, they are very much specialized pulp mills, and Johanna will open up that in her presentation, and they need to be specialized also because they are operating in the Nordics where the raw material wood cost is higher. But through specialization, we can make healthy margins also in these businesses. But also Enocell and Skutskar are partly, to some extent, supplying our board needs for, for instance, unbleached kraft pulp as well as some other pulps.

So this vertical integration is a clear advantage. And we are, in fact, the only board producer, paperboard producer in Europe with own cost competitive eucalyptus pulp assets in South America. And that is a strength we want to build on. But now we are coming actually to my favorite theme, and that is about our own actions to continuously improve our margins and our profitability. We are working very systematically since 2 years back in operational efficiency improvements, commercial excellence, sourcing improvements as well as fixed cost reductions. And I'm so happy to see the results we have been able to achieve during the last 2 years, and we are continuing on this path.

We have a process in place that we call VCP, value creation programs. And what it really means is that we have a systematic approach to, for instance, in operations. We have mill sprints, which means that we are focusing 2 weeks, 1 mill at a time. We gather all the best experts we have in different fields of operations, energy, board making, pulp making, optimization, wood yard, all of that. We gather those best experts together. We focus on one mill at a time. We generate ideas and plans, how to reduce our costs, improve operational efficiency.

And then, of course, we move to the next mill, and we do the mill sprint 2 or 3 weeks at the next mill. We have now already gone through all our mills with the first round of mill sprints, generating lots of ideas, initiatives and also executed on these ideas. And now we are actually -- we have already started the second round. So it's a part of our continuous improvement work. And I'll give you some example to show what kind of VCP initiatives we have identified and executed on.

On the commercial excellence side and sourcing side, we have a win room concept where we gathered experts together to focus on a specific question, for instance, a certain chemical that we need to source. And we go through -- and we work together with our suppliers to find ways of reducing our total cost of ownership. And then, of course, we work on cost efficiency measures through fixed cost reductions. During the last 2 years, we have reduced our workforce by over 2,000 FTEs. We are continuing on this path. And as a result of the reorganization we announced and implemented on the 1st of July, we can take the next steps of streamlining our organization by delayering, taking off layers in the organization and even further reduce our fixed costs.

We have also a project management organization in place on the group level as well as in all our business areas that is supporting the value creation program work. And we have integrated our VCP work into our daily steering of the business, business planning, forecasting, follow-ups and daily management of our company. And in fact, when we look at what we have achieved during the last 2 years, we have, in fact, and we can prove that EUR 850 million of profit impact through the VCP work has hit our bottom line already. And we have in the pipeline of ideas to be executed and to be developed EUR 500 million to EUR 700 million more.

But this is not a project. It will not stop here. This is our new culture, our continuous improvement work where we constantly look for new improvement opportunities. So it wasn't enough that we did a first round of mill sprints, then we start the second round, and there will be a third round and a fourth round. So it's our new way of working, and this is really what we mean with our performance culture.

And I'll give you now some examples of these value creation program initiatives and their results. We have so far identified over 4,000 VCP initiatives. I'm truly proud of the work done by everyone in Stora Enso in every mill, every function, every part of our organization. We have 800 initiative leaders who are working on these together with their teams, meaning that we have thousands of people who are every day working on saving costs, improving our margins.

And here are 3 examples of these 4,000 initiatives. We have, for instance, in the Imatra Mill, advanced energy optimization management, which has yielded us -- given us more than EUR 6 million of annual cost savings. We have, in Enocell, found ways of increasing the production of tall oil, and there is a market for tall oil, which means that we have a EUR 2 million -- about EUR 2 million annual profit impact through this VCP initiative. Fors is a great example of moving to 100% Veracel eucalyptus pulp. We have been able to replace other pulp grades, Nordic pulp grades and to save over EUR 7 million every year, improving the cost competitiveness of this mill.

Here, there are 3 other examples out of these 4,000. In Montes del Plata, we have moved to methanol from our evaporation plant to be used to replace heavy fuel oil, giving us a saving of over EUR 1 million annually. Beihai is another great example. Beihai has been working systematically on improving their efficiency, performance. And in fact, today, Beihai has the best overall equipment efficiency of all board mills, not only our board mills, but all board mills in the world. They are actually the world record in OEE, the best performing board mill among all according to statistics that we receive from board machine suppliers. And then we have Skutskar, another example, improving the digester process and optimization, giving more than EUR 2 million annual savings.

These 6 examples are relatively big saving examples. Most of the VCP initiatives, we are speaking about hundreds of thousands of euros or EUR 0.5 million, that magnitude, but these are really good and clear examples. And we share these practices regularly with our whole company through what we call transformation days where we have had so far, they are virtual meetings, teams meetings. And so far, we have had thousands of our employees participating. And we organize these transformation days of 2 reasons. First of all, we want to share best practices, and we want to inspire each other to come up with good ideas.

And for instance, the great idea of energy saving in Imatra. I bet that in Skoghall, they all think that actually we can do even better. We need to show them that we can save even more. So that's the kind of a spirit we want to create here, inspiring each other. But there is also another reason, and that is to celebrate success and to really put the true heroes in our organization into the spotlight. The engineers, the experts that are working every day on improving the performance and portfolio and performance of our company, the 800 initiative leaders and the team members. Those are the true heroes that really get this improvement and builds a better and stronger Stora Enso.

So now summarizing. We are building on our 5 strengths of growing markets, attractive markets with leading market positions. We have attractive product offering based on our customer-centric innovation. We have cost competitive, well-invested assets, and we have the systematic continuous improvement work, the performance culture and the value creation program work that is accelerating in our organization. And we'll continue -- we are determined to continue focusing on our 4 strategic priorities to lead in customer value to grow faster than the market, continuing on the path we have demonstrated throughout the last decade and also building on the big investments that we have carried out during the recent years. We are determined to expand our margins and our profitability in -- through business focus, through the VCP work and our systematic, diligent and disciplined approach. And we are generating cash with high conversion ratio as well as a very strong and disciplined capital allocation for the years to come.

So now I will hand over to our CFO, Niclas. He will explain how these strategic priorities are translating into our financial plans and financial performance. Over to you, Niclas.

So hello, everyone, and fantastic to see you all. It's great to see a room full of nice and good people and look forward to the questions as well. Just on a personal note, I joined this fantastic team and this fantastic company in January. And before I joined -- by a few people who knew Stora Enso that, okay, what sort of animal is Stora Enso.

And very much echoing what Hans was saying. I mean we are highly appreciated by our customers. We are known for innovation. We are known for sustainability. But there were a couple of weaknesses, a couple of improvement areas as well. And those were portfolio. So portfolio a bit complex and then capital allocation. Super happy actually that we are addressing these weaknesses as well as the strengths head on. I'll talk a bit about capital allocation and portfolio Hans explained about. So we are addressing the forest, and we also have the strategic review related to the Central European wood products.

So how -- what Hans said, how will that translate into performance and financials? I'll start with 2 things we announced yesterday, communicated yesterday financial targets and then segment reporting, how you will read us, how you will understand how we progress going forward. And then I'll get into profit, CapEx, debt and cash flow.

So financial targets. First of all, we have the macro drivers. We have what it takes to grow. We are invested. We have competitive assets. So the macro drivers, we are in a market which is growing and likely growing for a long time to come. So we intend to grow more than the market, and the way we define it is that, that's more than 4%. Secondly, EBIT, very important, especially now, here and now in this environment, but also going forward. We have a clear ambition to get to 10% and actually above 10%, and I'll come back to this. And as Hans mentioned, the good thing with this is that this is in our own hands. We do not rely on the market to get to 10% and above 10% but I'll come back to that.

Shareholders, super important. We need to put even more weight on shareholder return. And one sign of this is the dividend, of course, and 50% of net profit over a cycle needs to be dividend or paid out as dividend. And then the fourth one is our net debt and balance sheet strength. And here, we actually take pride in being conservative. We will drive our net debt down to less than 1x EBITDA. And also here, very clear plan in our own hands, so not relying on external factors. So these are our 4 external -- or not just external, but these are our 4 long-term targets, both internal, external, which we relentlessly will work on and will get to.

Then how do you follow us? How do we follow ourselves, what progress we are making, where we are doing well, where we need to do more? We're also renewing our segments. So from Q1 onwards, we have Consumer Packaging, we have Integrated Packaging and we have Biomaterials. So let me briefly touch upon the segment reporting before then moving on to profit and capital allocation. To the left here, you'll see the current or the old segment reporting as of first Q1 '26, that's out of the window, and we move to the new one, which you see here to the right. So again, Consumer Packaging, integrated Packaging, Biomaterials and then other.

And what makes me excited here. And one thing kind of in addition to what Hans mentioned about VCPs, which we relentlessly push every day is the P&L responsibility. So behind these segments, we have 6 business areas, and every business area is P&L responsible. You have the owners of the 6 business areas here in the room, and we'll hear more from them in a few minutes here. And then as part of the 6 business areas, we have 24 business units, each of the 24 being P&L responsible.

And this is something that we set up now 1st of July. So this is up and running. And now we are working through the motions really to get people used to this P&L responsibility. So it's actually a distributed P&L responsibility. It's not just Hans who needs to scream and shout and say, improve, improve, improve. But actually, we have -- we all take responsibility for delivering results day in, day out.

One detail here is that within the other segment, we have the new business area, Wood and Energy, big operation for us given where -- what we do as a company. Here, we will also have the Swedish forest. So the to be demerged Swedish forest is part of other as well as the Wood Products Central Europe, which will also be part of other.

Then moving on to profit and how will that look like going forward? How will we get to the 10% and above. Let's first start with the history. And we've had a couple of pretty volatile and tough years here behind us. But when we look behind the kind of headline numbers, what's been happening in the last couple of years, if we go to 2024 first. In 2024, we had a significant headwind from higher fiber costs. Fiber costs were actually EUR 300 million higher in '24 compared to the prior year. Despite that, we actually improved the profitability. And that was thanks to the value creation actions. That was thanks to the relentless work every day throughout the organization to improve the performance. So we actually had EUR 450 million of identified actions in 2024, offsetting the market headwinds.

And then if we move to this year, 2025, it's actually a similar picture. Yes, we've had market headwinds, consumer demand, weak fiber costs, another EUR 300 million higher than the prior year, offset by EUR 400 million in own actions. On top of that, we've had the headwind from the Oulu ramp-up. As you know, a bit more than EUR 100 million in headwind. But all in all, underlying profitability improving despite the market headwinds and again, thanks to the own actions.

So where does that lead us? Today, we actually, give or take, a 7% EBIT company. Assuming then, not just assuming, as we are planning to demerge the Swedish forest, take the Swedish forest out, that will take our EBIT margin down a notch. And from that, a notch down, we are climbing up to 10% and above. And where does that come from? Again, very important point. This is through our own actions. We are not relying on the market. We have identified between EUR 500 million and EUR 700 million of own actions coming on stream and having an EBIT impact, profit impact over the next few years.

And again, we heard about this from Hans. What are these? These are operational, these are sourcing, these are cost-down activities, the whole range. They're all logged. We all have them in a system. We have a small central team managing this. And of course, the activities, the actions, they come from the P&L responsible units. So it's a pretty methodical, at least for me, a pretty cool way of doing it. On top of the EUR 500 million to EUR 700 million in own actions, we have the large investments, primarily Oulu here, but also De Lier ramping up coming on stream, which will add another positive measure as these are margin accretive volumes then or sales coming on stream. So with that, 10% or more. And on top of that, one day, the market will come back. That will be on top of this. And also, of course, if there's further headwinds, this will be offset by our own actions.

Let's then move to capital allocation and CapEx. If we look at our recent history, we have invested a lot. We now have what it needs to grow. We don't need to invest to capture growth. We need to bring what we have invested in on stream and make that productive. So we have a couple of years behind us with more than EUR 1 billion in CapEx investments per year. This year, we are coming down to somewhere between EUR 730 million and EUR 790 million. And next year, it will actually be lower. It will be below EUR 600 million.

And there's 2 reasons for us to be convinced that this is the direction, and this is the right thing to do. One is, again, that we have what's needed. We have made significant investments. We don't need to make significant investments now going forward. The other one is that we have worked quite a lot in the last few months on just the CapEx strategy, how we run CapEx, how we approve investments, how do we categorize our different assets. We've looked at all of our assets. We've looked at all of our sites, all of our mills, and we categorize those into 4 categories, ranging from run for cash to key. They have different investment profiles.

From a cultural perspective, we will work on taking pride in running our assets for cash. So it's not just about investing and being proud of a new shiny machine, but it's also about what the return is and being proud of the run for cash mills. We have Matthias Friedrich, a fantastic colleague who is dedicated to looking into this, done a lot of work the last few months just to set up this new framework for being efficient in how we invest in CapEx going forward.

So from CapEx to cash flow, and here, you see a similar picture, the inverse of CapEx. We have invested a lot. That has pushed down our cash flows the last few years, and we are now turning the corner when it comes to cash flow. We take CapEx down. That's clearly one factor. The margin through our own actions will pick up. And then we have the Oulu board machine and also De Lier coming on stream, being the kind of revenue uplift part here. So turning the corner when it comes to cash flow.

How do we use that cash going forward? Again, pushing the message of disciplined capital allocation. Taking down debt, very important. That's what we are going to work on, and that's what we are going to do to get to the onetime target. Shareholder return, the dividend. And then with -- you can say in simple terms, when there's excess money, yes, we will do strategic investments, but we will scrutinize those strategic investments. And here and now, it's about investing in efficiency and optimization, less than growth, but the point being here that it's in this order and investments will be scrutinized.

Then on net debt and balance sheet strength, as said, we are taking down -- determined to take down the net debt to conservative levels. We are well aware of the target being quite conservative, and we're actually proud of that. We are happy about that. That's where we want to take this company to be safe, sailing safely throughout any market environments going forward. So we actually peaked in net debt this year 2025 on the back of the big investments that we made that are now or have come to an end. We took down net debt by roughly EUR 800 million through the 12% sale of Swedish forest. And now we are taking the next steps, the next couple of years and moving down towards that one or preferably even below 1x net debt to EBITDA. But again, very much in our own hands, not relying on market picking up or some external factors.

So just to wrap this up, this is in our own hands. We take pride. We have the P&L responsibilities. We have the people who can turn this ship not only around, but towards that 4% or more growth, 10% EBIT margin, dividend distribution and then a conservative balance sheet on net debt level. So we have what it takes. It's in our own hands and we will drive profitable growth. We will work or continue to strengthen the cash conversion. We will be more disciplined than in the past and very disciplined when it comes to capital allocation, safeguarding shareholder returns, dividends and then the healthy balance sheet.

So with that, thank you, and Hans, back on stage.

Thank you very much, Niclas, but Hans as well, obviously. And now we're actually open already for the Q&A. And there, we have very eager hands already up. But a couple of instructions first. [Operator Instructions]

But with this, I think we can start. And actually, I have one opening question before we open it for the people here. So Hans, this is for you. It's about our culture. So what is the largest cultural shifts that you have worked with internally in a way to implement these efficiency improvements already?

Well, it's absolutely our 4A concept. The day when I was appointed as CEO, I had an all-employee call. I said that, hey, now we will start focusing on profitability, cash flow, deleveraging the company. But more importantly, this is a great company with great foundations. The only thing I see we need here, we need a performance culture. And I knew I will get the question. So Hans, what do you mean by 4As -- performance culture? And therefore, I had -- in order to remember myself, what I mean with it, I had developed this 4A concept.

It's an ambition. It's that continuous improvement mindset. It's not enough that we are average or status quo is not an option. Always, we want to be the best in everything we do. Customer satisfaction, quality, operations, efficiencies, cost competitiveness, profitability. That needs to be the high ambition level everywhere throughout our whole organization. Then agility. That's extremely important, especially in a cyclical industry because it's about being proactive, being close to customers, knowing what the competition is doing, making proactive fast decisions, implementing with speed and determination instead of always being late in the cycle. You can win or lose a lot of money in a cyclical industry, depending on the productivity and the speed.

Then it's analytical approach. It's all about data-driven decision-making. It's not about who is the CEO and who is not or who has worked for the company for 30 years and someone only 3 months. No, it's facts, figures, analysis, that is the basis for all decisions. And then last but not least, accountability. Clear roles and responsibility, clear measurements, key performance indicators, decentralized P&L responsibility. We have now with the new organization in place since the 1st of July, we have 24 new P&L responsible business units, all the mill integrates, the former mill managers, they are today business unit leaders. They are accountable not only for the costs of their unit, but they are accountable for the EBIT, the bottom line of what they are doing.

And that is -- they are being challenged every month. We -- Niclas and myself, we have something that we call monthly performance meetings. Our colleagues, everybody else calls it the monthly barbecue. And they participate there, and we'll go through what was good, where have we proceeded, where are we lacking behind, why, what are the corrective actions and so forth. So improving profitability and performance is not really rocket science, but it's really about culture. That's the key.

Thank you.

Lars Kjellberg, Stifel. Coming back to Niclas, one of your initial comments, you talked about the issues of Stora, one being capital allocation as one of the things that needs to change. So the question is really that capital allocation has also been the driver for growth. So how do we then square up, continue to have that 5% growth with lesser capital? And the one thing that kind of was missing from the new KPIs was actually return. So on the investments you've done thus far, the returns have been pretty dismal and you have, of course, written off a huge amount of assets. So again, the question is really, how do we square up the continuation of that growth bigger than the market with lesser CapEx? And why do we miss the return metric in the KPI?

Yes. If I -- I'll start with the latter one, so the return. And yes, I mean return matters, return on our investment matters. And we went through that internal discussion that, okay, return on capital employed, EBIT, EBITDA, what measure to have. And return on assets, when we make investments, return on the daily business matters also going forward. And roughly speaking, the 10% EBIT is in line with 13% return on capital employed. So that's kind of the rough math there. So we are not forgetting it as such.

But EBIT is clearly just an easier measure for everyday management for people to understand day in, day out, again, not forgetting about returns. We will scrutinize returns also for CapEx, for instance, scrutinize returns for every -- all investments we do and similar requirements, hurdles there that it needs to meet the overall company ambition or be higher.

And building on that, the 10% equaling 13% return on capital employed and the growth aspiration. I mean we have invested heavily. We have the largest modern consumer board line now ramping up. We have -- actually the world's largest corrugated manufacturing plant acquired with De Jong, where there is also a ramp-up ongoing. So we still have a lot of capacity to fill.

And after that, in fact, if we do the same thing that we have done in Beihai, in all our board mills, we will have another 0.5 million tonne of board capacity. So there is a lot of we can do still through our internal efficiency, organic growth. We are well invested for the next 5 years. Meaning that, of course, there can be some investments we will do in order, for instance, to reduce our costs, improve our competitiveness. But still looking ahead for the next 5 years, we are very well invested to support at least that 4% annual growth.

Yes. Oskar Lindstrom with Danske Bank. I mean the Swedish forest lands are a huge sort of value event for you and for shareholders and investors. I mean the enterprise value or the book value of the forest lands in Sweden is like half of the enterprise value of Stora Enso. Now -- but if we look at forest land companies, both others in the Nordics, but also in North America, they generally trade at a discount and sometimes quite a steep discount to the book value when they're on sort of equity market. What can you do both in terms of structuring the sort of future relationship between the forest lands and your industrial operations and also in terms of boosting yield in your Swedish forest lands between now and I suppose the delisting to ensure that, that discount is as small as possible or perhaps not even a discount at all?

Yes. Maybe I'll start. So as you see here, I mean we are actually super excited about this split that we are working on, and we see a lot of value in it. I mean of course, again, back to shareholder value, that's one part of it. But the other part is then focusing on the business, having its own management, having its own kind of freedom to operate. Hans mentioned about some of those things that the forest company can do, which is on top of what we already do as a company. And of course, exactly as you say, those are the things that we will start working on and over time, will maximize.

This is a unique asset. I mean, it's a pure -- really pure-play forest asset. Many of the others or some of the others, there's not too many around in the world and especially not in Europe are not pure play. So it's -- yes, it will be a bit wait and see where the value lands. Of course, that's in your hands. We are true believers that this will be an exciting asset to own and have. And of course, yes, we'll work on it relentlessly now during the year to come.

And we saw it also during the sale of the 175,000 hectares. I mean there was a great interest, especially among institutional investors because they want to have that return profile very predictable, very stable. And also for them, the whole sustainability aspect is important that this 1.2 million hectares ties up 1.5 million tonnes of CO2 was also quite important. So this partial sale of 12% of our Swedish forest land really encouraged us and when we saw the great interest among especially institutional investors. So we feel good about establishing this Europe's leading pure-play listed company around forest, which doesn't exist today. So there is nothing really comparable in Europe. In the U.S., there is some a little bit similar, but not in Europe.

And then on the independence, which is a very important part, I mean these -- we are creating 2 fully independent stand-alone companies. And yes, of course, there's a joint business interest going forward as well, but both need to stand on their own, both need to be strong companies, strong balance sheets, strong businesses and have the independence to do -- I mean yes, ForestCo will have Stora Enso as a big customer. We have the wood supply agreement being developed, but also develop other customer relationships, as Hans mentioned, over time. So independence is very important.

Andy Jones from UBS. I just had a question about the asset base. I mean, clearly, you're trying to maximize the investments that you've made in the past. But in such an oversupplied market, as the consumer board market, in which you're obviously market leaders, I appreciate your cost curve position is pretty low. But as the largest producer in a lot of these grades, given the lack of closures from some of your higher cost peers, is it enough to say we're going to sweat the assets and drive down costs when in an oversupplied market, quite often, everyone is doing the same thing, prices just fall with it. As market leaders, should you not do more to help to address that overcapacity in some of your main markets?

Well, there is -- first of all, if we look at cartonboard, European cartonboard capacity, there is roughly 1 million tonne of cartonboard capacity that is higher cost than our single highest cost production line. But then it's not enough to look at the virgin fiber cartonboard. There is almost as big white top -- white line chipboard market, which is recycled fiber-based. And there are some examples actually we spoke there about, and I showed the pizza boxes there. One of the pizza boxes is produced out of recycled fiber-based white line chipboard. It's a 3 million tonne market in Europe. And then there is the same pizza box or similar pizza box produced out of our folded boxboard.

And in fact, the folded boxboard, our old, folded boxboard looks much better. It's whiter, it's cleaner. It has the same stiffness properties, better printing properties, but it is 40% to 50% lighter. So the customer, when moving from white line chipboard to our folded boxboard actually can buy 40% to 50% less tonnes and get the same or better package, lighter package. So we are -- it's not only about the cartonboard segment as such. It's also to look beyond.

And we have lots of similar examples, for instance, in the U.S. to replace SBS with this folded boxboard where we produce the board in several layers with different types of fibers and microfibers and so forth to really get that bulk stiffness with significantly lower basis weight. So we are quite optimistic about the strength of our product offering and how we will be able and how we are able to penetrate the market and gain market share.

And that is actually what we have been doing throughout this year. Compare us with competition, we have been growing. And most of our competitors are shrinking. And that comes from competitiveness, not only cost competitiveness, but quality competitiveness, customer focus, working closely with customers. I truly believe we have a clear competitive advantage here. We will continue to build on that.

And I will take one question from the webcast in the meantime. So how much of the current market weakness do you think ballpark is due to weak cycle? And how much, call it, structural as the industry has expanded capacity too much?

It's -- I mean we are -- it's a cyclical industry. I've been 35 years in the pulp paper forest industry. And this is -- these kinds of situations are always there. And because it is cyclical, demand is cyclical. And every now and then, there can be in some segments, some overcapacity. Then at some point, it melts around away. And you need to look at the longer term. And we strongly believe that we have the assets, the very cost-competitive, well-invested assets. We have the very attractive product offering. We have what it takes to be a winner and to continue. And it's not about anything new here. It's really about continuing what we have been doing throughout the last 10 years. We have been growing our packaging business more than 5% per year. And now we are saying that we are going to grow 4% per year.

Earlier the last decade, we have grown roughly double the growth rates of the market. And now we say, with all the plastic substitution and what is forecasted when it comes to migration from plastics to renewable materials, we are going to grow 4% instead of perhaps a 3% market growth. So we truly believe that we have what it takes to grow this company and to expand our margins at the same time.

[ Johannes Gasilis ] here, SB1 Markets, Stockholm. I'm a bit curious about what you revealed here today regarding own actions, EUR 500 million, EUR 700 million step-up. And you mentioned there are [ more ] sources, variable cost, fixed cost, commercial excellence and so forth. Could you kind of indicate how much of this benefit is fixed cost? And also if you can mention the time frame, are you talking about years? Or is it more 1, 2 years here?

So it's a fairly balanced without going into exact percentages here, but it's fairly balanced between operational, so working in the mills, many of the examples Hans mentioned. Within sourcing, there's a significant potential. This is one area I'm super excited about. We have our new sourcing head actually joining next week, and we will grab this head on. And it's not like we haven't done anything, but there's a lot still to do in sourcing. On the commercial side, mix driving, mix points, that's, of course, pricing.

And then, as you say, fixed costs. Fixed costs, we are working on as we speak. We had -- personnel was affected here the last -- has been affected the last couple of weeks. And even if that's not a particularly nice thing, it's a must to-do thing, and that will actually continue also during next year. So I would say, without giving you an exact answer, fairly balanced. And then on how quickly -- I mean we will do this as quickly. We will really push for it. I mean the time frame we gave here now is a couple of years. So call it, 2 years or so, 2 to 3 years.

The previous fixed cost FTE reduction, we could do like through just doing more with less. But one of the drivers for the organizational change as from the 1st of July was that we realized that to take the next step in fixed cost reduction, we need to work in a new way. We need to reorganize the way how we are working our processes and so forth. And that is now what we are carrying on. We haven't made like one big announcement like some other in the marketplace, but you have read throughout the autumn here, you have read news from all our mills about collaboration negotiations, reductions and so forth. And this continues in every part of our organization.

Now you have invested in growth now, as you showed quite a lot of money several years. And now you drive down that CapEx to '26. I think Niclas said less than EUR 600 million. [indiscernible] a company do that, they have one year lower CapEx, and then they go back to the higher CapEx. How should we look at '27, '28? Is this a little bit of a longer sort of pause in growth investments? Or is it just one year sort of breather?

It's not one year only. I mean we are -- again, how we allocate capital, we are renewing that, we are strengthening our scrutiny, making sure that the returns are there. So without giving an exact figure for '27, '28, but you should see this as a bit of a continuation rather than a one-off.

It seems to me that of the new financial targets, probably the net debt-to-EBITDA target is the one with the greatest impact in the immediate near term, however, and I'm a bit curious just to understand, and I think it said on your last slide, Niclas, that you said it's within a 2-year time frame. And I'm curious to hear how much of this leverage reduction is actually the net debt level?

And how will that come down? how much of that will be put into the first company? How much is relating to potential divestment and other sources if we assume that the EBITDA level is stable at the current level?

Yes. And you're absolutely right. The assumption, and that's, by the way, for these targets overall, the assumption is that these are Stora Enso long-term targets with ForestCo moving into its own company. So that's the kind of basis for the targets. And thus, of course, there is an assumption that a portion of the debt or the debt is being split in a sensible way and a portion of the debt is carried by the forest company and Stora Enso is left with less debt than if we wouldn't have done the demerger. The exact amount is something that we'll come back to. Of course, we have thoughts. We have plans, but we don't want to give you an exact number now, which then a month or two months later is slightly different.

I mean this is actually one important thing with the demerger is the tax efficiency or tax-free demerger kind of typical way how they are done in Sweden and Finland. And this we want to safeguard. And one of the things that are required to do it as a tax-free demerger is a certain split of the balance sheet and so there's certain tax rules governing that how much debt can you put on one side or the other.

So it's not completely kind of just up to us to make up a number. But what's important, what we've said all along from the very get-go in the summer when we announced this, is that we are determined to create two strong companies. So -- and this goes for debt as well. So there will be a suitable amount of debt in both companies.

So we are not going to kind of favor one part or the other. So two strong companies, investment grade -- strong investment-grade companies.

I will take in between one question from the webcast as well. So this is once again also about the forest. With a new completely independent pure play, how will the forest strategy change as profitability is the main goal or rather than providing cheap and quick [pulpwood] for the mother company?

Yes. I mean it's all about business focus. We're looking for -- we have this asset, how can we maximize the value and how can we accelerate the value appreciation, so there will be much more focus on the new revenue streams through the focus, and we are convinced we have seen it already throughout the process. The work with Tuomas and his team that actually when they look at this as a company to be listed, there are new aspects coming into it, new ways of accelerating value appreciation and income.

I just want to go back to capital allocation again. So I appreciate that for the next few years, your, I suppose, harvesting, deleveraging but to achieve that above market growth rate in the very long run, what are some of the portfolio tweaks and portfolio reinvestment plans that you have sort of on the shelf, so to speak, that you need to look at longer term for the business?

Yes. Well, we don't have any immediate big investment plans. We have some ideas how we can improve the cost competitiveness of some of our mega sites, the key mills as we have them classified. So that's something we are looking into. And then we will continue to invest even more than before in customer-centric innovation, product development. This year, 60% of our paperboard sales comes from new products. We want to accelerate that even further because we see the added value and we see how we can win with customers through new innovative products that are, for instance, offering a 40%, 50% yield advantage or that can help customers to reduce their carbon footprint 70%. So this is a really important part of our winning with the customer strategy.

What is your expectation for the net carbon footprint of the operating company once you have sold the Forest assets?

Yes. So we are reporting our CO2 emissions. And we have a target to be carbon neutral by 2040. And we have said that we want to reach minus 50% CO2 reduction -- emission reduction by 2030 compared to 2019 as the base year. Now as you probably have seen from our Q3 report, we are already at minus 60% in Scope 1 and 2, and we are at minus 39% in Scope 3 so we have basically reached that 2030 target already. This Scope 1 and 2, this CO2 emission reduction is really from our total supply chain so it doesn't include the benefit we have from our forests. It doesn't include the 40 million tonnes by replacing nonrenewable materials with renewable materials.

So it's really what is coming from our mills, logistics, food transport to the mills, mills product transported to customers. And we have great examples. For instance, our Oulu mill is nearly carbon-neutral we have managed to take down carbon emissions by 90% in this unit. So the forest divestment, first of all, and then the demerger of forest doesn't affect this. It's only the supply chain CO2 emissions.

Hans, I'd just like your thoughts on why you included the 4% per annum top line growth target? Because if I think about the industry historically, I think companies, analysts, consultants, we all overestimated demand added too much capacity to the industry. And there's a lot of latent capacity in the industry that needs to be utilized and I imagine, near term, your focus has got to be returns and profitability.

So how does the top line growth number impact your decision and the divisional management decisions to make sure that they're not incentivized at capacity when they should be utilizing what they've got available to make sure that you're driving returns rather than focusing on a top line rather than value accretive growth rather than just sales growth?

I do agree with you. I mean, our main objective is really to generate profits. That's the key thing. But actually, growing top line also drives improvements in EBIT. And my view on looking at the value of a certain company includes the top line development growth. Growth is important.

And as I said, last 10 years, packaging, over 5% growth in Stora Enso. We have demonstrated our strengths and capabilities, and we are going to continue on that path. So if you really want to maximize the value of your company. You need to demonstrate over the market growth rates, which are also driving improved EBIT margins which are also driving a higher EBIT or EBITDA multiple in terms of valuation. And therefore, growth is important. But of course, it's all there in order to improve our bottom line profits. And 10% EBIT margin of a bigger turnover is much more than 10% of a smaller top line. So I think the mathematics works, both in terms of driving EBIT improvement as well as driving the valuation of the company, demonstrating that continued growth and margin expansion at the same time.

But just to add to that. So again, repeating what we've said. I mean, we have what it takes to grow is about 4%. I mean, yes, maybe not for the next 20 years. But for here and now and the next number of years, we have what it takes. So this 4% or above 4% target is not driving CapEx, for instance. We have what it takes.

Niclas, you mentioned complexity as one of the challenges you're addressing that with the strategic review of the European sawmills. Could you talk a little bit about that topic? How do you see it? How much you can achieve with these potential actions and whether there's further to go? Is this like a startup a journey? Or are these planned actions already enough?

Well, it's really all about this -- how you drive efficiencies in our company because on the first of July, we reorganized so that the pulp and board mills and the nearby sawmills, which are actually synergistic and supporting the board making, which is the core our activities. So they are reorganized into business units, P&L responsible business units. And that's why the northern sawmills, they are now each part of a business unit, board and pulp business unit.

And these Central European sawmills and CLT plants, there are 7 sites. They are not Synergistic with our core business. So as they say, first come strategy, then comes structure, and that's what we have done, basically, this is an attractive totality in any case. So also with international distribution units in U.S.A., Australia and so forth. So we are sure that there will also be a lot of interest getting into this, getting a world-leading position in cross-laminated timber, but it's a very different business. And therefore, also here, we built Stora Enso around the core, which is really renewable packaging. That's where our strengths are, and that's where we have invested. That's where we have grown during the last decade, and that's where we are going to continue to grow.

But we don't have any further plans. I think with this, we are quite focused as a renewable materials company with strong and increasing packaging focus.

So a question on your revenue growth target of 4% and the confidence that you will probably continue to outperform the market, which I think you said will grow around 3%. So what gives you that confidence given that you are now going to focus lesser on growth CapEx? Or is it more like substitution from more substitution from plastic, from other paper grades, new customers, new geographies? So can you just elaborate on what gives you that confidence to gain more market share in the near term?

Yes. Well, first of all, we are continuing on what we have done before during the last 10 years, 5% growth. We have extremely well-invested competitive asset base. We have the most compelling to broadest product offering. We see that we can gain new customers, new business through our product development like the example with the pizza boxes getting business from white line chipboard moving to our folded boxboard and the customer saves money because he can buy 40% to 50% less volume and still get better properties to the box.

So it's really through innovation and product development to expand the whole addressable market and have to develop new businesses and new relationships.

So looking at that 4% growth, looking at how well invested we are, how much capacity we have how much state of the art technology we have, what kind of a product offering we have, global reach, customers operating in 60 countries, I think it's a relatively still conservative target as such.

And we are going to have one of the last questions now and then wrapping up soon, but go ahead.

A question on the Forest demerger, it seems like three questions, but just one question. On the demerger, it's 100% to Stora shareholders that you're envisaging. You're not going to keep any 20%? And if not, why don't you just sell 1 billion or 200 million hectares again and get to your 1x net debt to EBITDA and have one less target, less to worry about, why are you still kind of preempting that?

And you also said that it's going to be tax-free for Stora but it will be tax-free to our shareholders as well because if you were to say to Germany, you'll have a dividend tax. Are you thinking about that in terms of structuring the transaction?

Yes. No, good question. And yes, just to be clear, when we talk about a demerger spin-off listing. It is a 100% distribution to our current shareholders or at that time, shareholders. So as a shareholder, instead of owning one Stora Enso share after the demerger has happened. I own two shares, I own a Forest company share and a Stora Enso share. And that distribution when we talk about tax free or tax efficient at least, maybe that's a better term. That's from a shareholder perspective, also a company but shareholder perspective, that's what I was kind of referring to.

And of course, you are right that it depends a bit in which jurisdiction you are. So I cannot promise tax free for everyone. It depends on where you are, but looking at past similar transactions, it's tax-free is an important aspect from a shareholder perspective.

Then on to kind of the why don't you sell 1 billion or 2 billion or 3 billion or 5 billion. I mean, we are not doing this transaction to delever. We are doing this transaction because we truly believe it will create value, it will create value for the shareholders and it will create value for the two companies.

I mean, yes, then the debt will be split and again, we'll come back to the exact kind of amounts. But the driver for this is to create two strong companies, which are actually better than the combined ones from a shareholder perspective. But also from an operational perspective, both from a more focused Stora Enso. I was referring to the complexity. This will be a more focused Stora Enso industrial company. And with all the good things, the Forest company can do, having that independence that public scrutiny all the new opportunities and so on. So that's the main driver rather than just selling 1 billion and deleveraging.

So thank you, first of all, to you guys, but also to the great questions you send both via the webcast and in here. We will now have a break, and we can continue these discussions during the break, and we will continue at 11:15. So with the webcast listeners as well, please, will join us then. But with these words, thank you very much.

[Break]

Welcome back, everyone. I hope you had a refreshing break. As we continue on today's agenda, I'm pleased to introduce our next session, our business overviews. Joining us for the session is Andreas Birmoser, Carolyn Wagner, and Johanna Hagelberg who will each share key insights and updates from their respective areas. Please join me in welcoming our business leaders to the stage as we dive into the next part of the program.

[Presentation]

All right. Good morning, everyone. My name is Andreas Birmoser, and I'm heading the business area Cartonboard. Yesterday evening, I got a few questions, where I come from what I've been doing. So a few facts about myself.

I've been with the company for over 20 years. I joined back in Brazil, my home country, the first 10 years I spent in various finance roles, greenfield investments, production units, headquarters as well as a business area. And then for the last 10 years, I decided to move away from finance and have been leading business development, innovation, one joint venture in Brazil packaging material sales until I got to the position I am today, which I've been holding for two years now, leading business-era cartonboards.

And today, I'm not here to talk only about cartonboards, I want to talk about the whole consumer packaging business. Which includes liquid packaging board and food service board. This is our most important growth engine in the company, as Hans has already introduced before. And I want to show you how we shape our strategies around consumer demands, customer needs and how that will drive our growth moving forward and how that will help our value generation.

And I hope that by the end of this presentation, you will see the same thing I see: that we are the best positioned in this industry to succeed and benefit from that growth. So let me get started.

Hans mentioned about our strong positions. We are the European leaders in cartonboard production and food service board, and we are the global leader in liquid packaging Board. We are the company with the biggest and widest portfolio in consumer packaging. And that has a lot of benefits. I will highlight a few of them.

The first and most important one is probably the insight we get from different customers from beverages and food and how we translate that to innovation. Like barriers, a lot of needs to develop barriers in food service and liquid packaging, but that can also spill over to cartonboards. A good example is dispersion coating. So there is a value in having a wide portfolio.

And then we deal with many blue-chip customers, not only converters, but also brands. So we have here Tetra Pak, SIG, Elopak, with whom we have been dealing for over 60 years. But we also have brands like Nestle, ABI, which provides us valuable insight from the market and the consumers. And that helps us. We need those three parties to really develop the products, develop the materials to find the best solutions. And that's very important.

So as Hans said, this is a growing market, and let's start by looking to some of the numbers. Here on this chart, on the left-hand side, you will see the global projections of growth. And on the right-hand side, the European projections of growth. You will see that in both cases, virgin materials has a higher growth rate than recycled board. 1%, 1.5% will be driven by plastic substitution. That is a very important growth factor there.

You also see on the European side, there is a temporary contraction of demand currently that has been spoken for before. So we have an overcapacity of 800,000 million tons in cartonboards, but you also see that the growth towards 2030 is over 1 million tons. So that is a growing market.

But of course, we have now an overcapacity, which we will have to navigate through. And in order to succeed in such an environment, in my opinion, you need three things. You need to have a very strong cost position. You need to have entry barriers and you need to have the best product and services.

So those three things are crucial. And I want to talk about those three things in my coming slides.

I will start with our cost position. Again, on the left-hand side, you have the cost curve of folding boxboard. And on the right-hand side, you have the cost curve of the liquid packaging board. Here, on FBB, you will see that we have around 70% of our capacity in the first and second quartile of the cross supply curve.

While 100% of our capacity in liquid Packaging Board is in those quartiles. No other European producer has that high share of its capacity in that cost position. And that's going to be very important for our value creation.

But there are other two things which are important in this slide. One is if you look at how much volume is more costly than our most costly machine, which is our smallest machine in Forest PM2 is over 1 million tons. So you have 1 million tons more expensive than our most costly machine. Market is growing over 1 million tons in the next 4 years. So that is -- how you need to play this out.

And Hans spoke about our value creation program. How do we continuously improve with the sprints where we have our experts and operations and sales joining our mills, joining our sales offices for weeks to just lift ideas. And then we have the PMO structure to make sure we execute a weekly cadence where we review the products. I'm personally involved in those weekly meetings.

We removed the obstacles, we deep dive where we have to deep dive to make sure we make progress. And with that, we have been shifting our cost position every day, and that is very important. And as I said, we do it based on data. We leave emotions out. As you've heard, I come from finance, so I listened to data. That's what I do. And I think that's the right thing to do in this scenario. So that's going to be very important.

So I spoke about cost, then entry barriers. Let me talk about the four most important entry barriers. Hans mentioned the huge issue that is food waste. And therefore, the barriers to protect food are very, very important. We need to help to find the right solutions there. And here, again, benefiting from our wide portfolio. We have been innovating and developing a lot of solutions. We probably have the widest barrier offering in the market. And that is not something you come in and copy very easily. This takes years to develop.

Then our customer's trust. Trust is only built by repetitive steps, repetitive successes over a long period of time and that is then translated into two things. With many of our customers, we have long-term contracts, 2 to 4 years. What benefit does this bring? Predictability, certain price stability as well but most importantly, it makes it difficult for others to come and enter. You don't copy that.

And then there is the long lead times to really qualify this. The qualification process is very demanding. Sometimes it takes 6 to 12 months to qualify a new product. So again, if you come from the outset in and you want to play in the food and beverage industry, it's not going to happen that easily.

And of course, fourth but not -- last but not least, you have the high CapEx. It's not only about building an asset, right? We just invested in a new machine in Oulu, EUR 1 billion year investment. You need to have the whole environment around you with forests, harvesting, transportation. It's not something you copy that easy.

So with all those things, it's going to be very difficult to see more capacity coming in Europe in the next years. So we have invested while there was a window to invest and now we can benefit from that growth.

So I spoke about cost entry barriers. Let's look into products. Here, you will see on the bottom side of the charts that renewable fibers of fiber-based packaging has a growth rate which is twice as big as plastic packaging. So a lot of the growth will come from plastic replacement, especially in Europe. Europe is driving most of that because here is where the legislation is more advanced and PPWR, SUPD, you name it.

And it's going to kick in really strong now in 2030. So that is driving a lot of the growth. So then you need to have the right products. And I spoke about barriers and how we develop them together with our customers.

One good example is ultra thin PE. If you think about those drinking cups, we have managed to keep the plastic content all under 5% by having very thin layers of PE. So it's compliant with legislation and it opens a market for us because we will be there with a solution that works. Others probably don't. And that's going to be very important.

Then another important topic is lightweighting. Why is lightweighting important? You need to do more with less. If you want to replace plastic, it's not just going to happen because we wanted to be renewable. It needs to be cost competitive. It needs to work in the thinning lines. And for that, lightweighting is a great tool because you can do more of plastic, you can remove costs not only for materials but also from logistics.

And here, I will give you now a few examples from our new machine in Oulu. So if you look at our -- what do we do for our folding boxboard in the new machine in Oulu? We have our patented technology called FiberLight Tec, where we introduced microfibrillated cellulose on the mid-ply of the board, and that increases its stiffness and resistance. And that gives us up to 8% yield advantage. It sounds like not much, but it is a lot. It saves a lot of cost in the process. If you compare, for example, our folding boxboard from Oulu to the North American SBS, we are up to 18% more efficient in yield.

And not only that, we have a 50% lower CO2 footprint even landed in the U.S. And that's because of the energy metrics we use in our mills and how we transport it to North America. So that resonates a lot with the brands, which are ultimately the ones which are deciding what to use. We actually help them to achieve their targets. And that's why we have been increasing our efforts in talking directly to brands and retailers and not only the converters. We need those three parties involved in that change.

Then another interesting aspect, and Hans has this good habit of stealing many of my lines. He does it over and over again. But he talked about pizza boxes, right? And he mentioned that the white lined chipboard market is a EUR 3 million tonne market. If you take Oulu and our products in Oulu and you convert it instead of looking at cost per ton and look at cost per square meter or cost per box, the products from Oulu will be positioned in the first quartile of the cost supply curve of white lined chipboard. Why is that? We can achieve up to 40% to 50% yield advantage compared to white lined chipboard.

So I'll ask my colleagues to circulate now some of those samples, so you can see it with your own eyes. That one specifically. This one is -- you all have seen that frozen pizza boxes, white lined chipboard material. This one developed based on our own products, 37% lighter, wide insight. This one is gray insight, better printing surface, better printability, better runability in the machines.

White lined chip material, you stopped at converting in the printing line every x hours, hours once for a full day. So you bring a lot of efficiency to the process. So that is a market which now with our investments and our cost position in Oulu, which is now addressable for us. So we don't only compare virgin to virgin, but we will also replace white lined chipboard.

And back to the U.S., I mean, yes, tariffs are there. We haven't seen the end game. But again, with our yield advantage and with our value proposition on CO2. We have seen that our customers, they are willing to talk and willing to share that with us. And why is that? If you think about it, put yourself in the roles of a converter in the U.S. or a brand in the U.S. and you say, that's all the Europeans get out of the U.S. because of the tariffs, what happens, you shift all the power through the hands of the [indiscernible] that you have the two big players, which have 80%, 90%.

I guess you all know what happens to price in that scenario. So that understanding is there, and we see that the customers are willing to talk to us. But -- so with that solution with those boards, we will be able to compete not only with white lined chipboard, but also with plastics.

You all travel, you all go to supermarkets, right? So think about how much plastic you see where plastic is not needed. A few examples. Here, you have the 6 cans or 12 kinds of beverages, beer, soda, drinks. In the past, all wrapped in shrink films.

Now you start seeing them in boxes or with handles made out of cardboard. But think about tomatoes or vegetables, how much of the trades are plastic and you ask you say why plastic. There's no good reason or the trades on biscuits. These are just a few examples. And those changes are silently happening, and it will continues to happen especially now towards 2030 when legislation is kicking in. So hopefully, that gives you a bit of a glimpse that we have the right products and the right solutions and the strong cost position to fight this environment we are in right now.

So then talking about the machine in Oulu, EUR 1 billion investment, 750,000 tonnes of capacity. It's a swing mill. It will produce folding boxboard, but will also produce CUK or CKD, as we call it. And that is a beauty in itself. Why is that? Two main things. We have designed and developed Oulu based on the existing SKUs we have in Skutskar in Sweden or Fors in Sweden.

That gives us a security supply increase for our customers. And they are really, really looking after that, especially of everything that has happened over the last years, strikes, shutdowns, you name it. So they wanted increased security supply, we can provide it now. But it also has another interesting aspect, which is this interchangeability means we will not grow 750,000 tonnes in cartonboard. We will be moving products from our existing mills like Skutskar to Oulu or Fors to Oulu and that is roughly 150,000 to 200,000 tonnes in the coming years. So Oulu allows us to debottleneck the whole portfolio. You can grow in liquid packaging by removing products from Skutskar.

You can grow in food service board by moving folding boxboard from Imatra. And that allows us to play and reduce the risk of being exposed only to one grade. And that is another important aspect to keep in mind.

So to finalize or not to finalize, but to talk about value creation first, we want to achieve over 10% EBIT, and we are confident we can do that. 30% or 40% of that growth will be coming from structural changes, meaning the ramp-up of Oulu and the other 60% of own actions. Hans mentioned a few of them. We have replaced the outer price in Fors with eucalyptus pulp generating EUR 6 million in savings.

Imatra, where we are running more efficiently our energy setup, another EUR 6 million. We have changed the recipes with blue chip customers, and that will have an uplift of 1% EBIT margin. And then we have, in this lower volume scenario, this overcapacity scenario, we can allocate the products to the lowest cost asset for time being, which is another great value creation visibility. So what I'm trying to say is there is no silver bullet. It's this new ways of working, it's this new mentality that we have and that we continue to push.

We listen to data, we lift ideas and we make sure we execute them. I have one machine and 1 million hour in my business area where we have got over 10% of cost in the last 18 months. So it's possible. We have done it. We have proven that we can do it.

Good. Then to finalize. This is a growing market. It's growing organically. It's growing from plastic substitution, and now we are capable of also replacing the recycled board. So it's a growing market. We have the right products. We have the right services we have the right cost position to navigate through those times, but most importantly, we have the trust of our customers. As the examples I've given some of them have been dealing with us for over 60 years.

So with that and our new mindset of new ways of working to continuously look for improvement of never being satisfied of always looking to be more ambitious. We are convinced that we will be achieving those targets in the next 2 to 3 years.

And with that, I pause here, and I invite my colleague, Carolyn on stage.

[Presentation]

Good morning, ladies and gentlemen, and I've spotted some ladies in the audience. Welcome I'm Carolyn Wagner, and I'm heading up the business area, packaging solutions for Stora Enso. To begin with, I want to share a personal secret with you. I love packaging. As a packaging engineer, I should. And hopefully, today, I can transmit my enthusiasm also to you as we go through the segment containerboard and packaging solutions.

Now we have a lot to gain from where we stand today. I am convinced that we can drive growth and a meaningful EBIT margin uplift through our own actions. We will shift our portfolio to higher margin products. We will integrate containerboard and packaging solutions for growth. And we will scale up our automation and service offering. These actions will make a significant impact to our performance over the next 2 to 4 years.

When you think about packaging, have you ever wondered what is so special about a box? Today, I want to show you how Stora Enso can turn a box into tangible shareholder value through technology insight and customer intimacy. Let us start from our strength.

Stora Enso is a leading producer of virgin fiber containerboard, complemented by a very competitive recycled offering. We are also a top-tier integrated company, but mainly across Northern and Central Europe, and we serve demanding customers, brand owners who value our quality, our reliability and also our innovation. 80% of our sales is in Europe, but we are really a global supplier.

So we expand specifically in virgin containerboard also into North and Latin America. This gives us both resilience and profitable growth opportunities beyond Europe.

What are the markets in which we operate? The structural demand in our markets is intact. We expect the global virgin containerboard markets to grow by about 1% year-on-year through to 2035. And soon to exceed capacity, and that is good news for Stora Enso. With recent mill closures in North America, we European suppliers have a golden opportunity to gain global market share. And also European box shipments are steadily increasing, especially in Eastern Europe. And this is a very strong fit with our integrated footprint.

At this point, I would like to share our three strategic levers which will help us win in this competitive market environment. Firstly, our low-weight kraftliner; Secondly, our footprint advantage; and thirdly, the expansion of the value chain. Let us start with our superior innovative lightweight, kraftliner. It's a unique product from Stora Enso.

Now packaging sits at an intersection of two mega trends. Firstly, it is the shift from plastic to paper and secondly, the push for lighter, lower carbon materials. This also drives corrugated demand in our target segments. This is where our superior lightweight kraftliner comes into play. It offers better strength values and lower specific [gavage].

For our customers, this actually means 10% to 15% less material up to 20% lower CO2 footprint and a better box performance. And this is important for our customers. Because most international brand owners, they have made a promise to you, to us, to the consumers. They have made a sustainability promise to us, and now they have to deliver on it. Now Stora Enso can help them reach their targets.

And if we were to follow Andreas to the supermarket, we would also see that the boxes perform on shelf. Now what does perform mean? They are strong and they just look good. And with this, they also enhance brand perception which is also very important for our brand owner customers.

Let's move on to the second lever, our integrated footprint. Now our footprint is a real differentiator. By co-locating containerboard mills and corrugated plants, we have integrated an efficient vertically integrated system. This actually minimizes transport, thus also reducing logistics costs and again, lowers the carbon footprint.

Now our containerboard mill in Ostroleka. It's a recycled containerboard mill and it operates in the lowest cost quartile. And it's ideally situated to our own corrugated plants. Actually, it sits on the same premises as our biggest corrugated plant in Poland, but also very close to our Baltics operations.

With this, it's obvious to all of you that this creates a cost advantage if we compare to competitors. A cost advantage per tonne at the same time, giving us higher service flexibility. This allows us to grow and at the same time, it allows us also to protect our margins. What else does the integrated model do for us?

Well, it is actually a natural hedge against market volatility. Because we have easy access to paper, we can optimize the capacity usage in the paper mill, and we can balance demand and supply across the cycle. Our third strategic lever, the expansion of the value chain.

Now we don't sell paper. We don't sell boxes. We provide packaging solutions. This end-to-end system, this is actually what we're targeting. We want to be a packaging solutions provider for our customers where design, data and automation connect seamlessly. And the success of our award-winning packaging solutions that's also a very good selling argument for external containerboard customers. So again, we see and we can underline the importance of integration for the success in our business.

So if we recap, what are the three strategic levers which will help us win. It's our low weight Kraftliner with higher strength property at lower CO2 emissions. It is our footprint advantage, which gives us a lower cost position and better proximity to our markets, and it is the value chain expansion, which creates value for our customers. Those three together allow us to grow even in stagnant markets.

Let's move on to something that really excites me as an engineer, automation. Look at this great case from Lumene. Lumene is a high-quality finished cosmetics producers. And if you were to ask Lumene what packaging is for them. They would actually say it is nothing short of a growth engine. With our wraparound packaging machine, we have actually replaced manual packing processes for 40 different products. And this has increased efficiency. It has increased reliability and it has also increased sustainability.

You don't believe the success they have with this packaging line, really. It's great. Because they have now been able to expand their e-commerce business internationally that even deliver as far as China. And that is what automation did for them. And for us, the customers who actually buy automation lines from us, they're typically 30% to 40% more profitable than ordinary packaging customers. How can that be possible?

It is possible because every installation actually deepens the customer relationship. It anchors both paper and box sales and it also gives us the opportunity to continue with further products with further lines and also with aftersales turnover. So this is really the story, I believe in. So -- and if you really want to see expansion of the value chain, in practice, I would like to invite you to go to IKEA.

Maybe not on a Saturday afternoon like I did. But in the IKEA, you will see a lot of Stora Enso products. You will see Stora Enso containerboard and you will also see Stora Enso corrugated boxes. And then if at the end, just before the exit, you can't resist those Swedish cookies, you will again meet Stora Enso packaging material packed probably in Stora Enso corrugated cases by a Stora Enso automation line. I have to admit we don't make the cookies.

So what are all these endeavors leading to? Of course, our goal is to grow EBIT margins significantly and become a more profitable business also in integrated packaging. For one thing, we will do this through structural changes. Our major packaging site in De Lier will be ramped up to its optimal capacity.

And secondly, we will do this through our own actions. We heard about our own actions also from the other presenters. So these are things that we control ourselves. Of course, again, we go from the technology, which means we will improve wood yield, fiber yield in our containerboard production, but also, we will improve our performance, our productivity in the corrugated plants.

And of course, we will take commercial actions. We have now discussed in the questions, how are you going to grow above the market? Well, I believe that actually we can grow above the market because it's all about performance and customer trust, as you've also heard from my colleagues. And this is also very, very true. So we will also be much more customer-driven, customer oriented in our corrugated plants and thus, we will be able to grow above the market. And we're not waiting for the market to recover. We're not waiting for the markets to turn. We will turn it ourselves.

To conclude, I believe that integrated packaging can be a real growth platform for Stora Enso. We unlock this potential by technology, circularity and customer trust. We have leading assets also in containerboard and packaging solutions. We have really unique products, and we have a partner relationship with our customers, which is unrivaled. So I believe that we will actually also play a winning game because I believe that with every box, and with every customer, with every consumer, we make life a little bit better and a little bit more sustainable each and every day.

I believe from Chinese New Year, beautiful box from China through to Christmas Eve, every box is special. Thank you.

[Presentation]

So we are the renewable materials company with a strong focus on packaging, but to make excellent packaging, you need pulp. And that's where we come in. We are serving demanding customers with specialized pulp as well as new biomaterials. And I'm Johanna Hagelberg leading the biomaterials business area.

I will talk about three things: our portfolio, both in pulp business, as well as in the new biomaterials. I will talk about the market, and I will talk about our clear actions to improve margins. Let's start with pulp. We produce pulp for everyday life. You wake up with pulp, you live with pulp throughout the day, and you go to bed with pulp, from cradle to grave.

The eucalyptus pulp is going into packaging, with our packaging business area sisters. It also goes into specialty applications and to tissue and growing into hygiene. Then we have the fluff pulp, which naturally goes into hygiene, all sorts of grades in hygiene, and both of these two have clear -- offering clear competitiveness and sustainability to our customers. And then thirdly, unbleached kraft pulp, where we actually are the largest in the world, and I will come back both to the fluff and to the unbleached.

This is serving our packaging business with natural-looking grades, natural-looking packaging appearance, but also new areas like electrotechnical underpinning the electrification that we are going through. Also water purification with filtration and supporting the construction sector with fiber cement. So that is our portfolio. And this portfolio is already today at the low of the market, delivering 10% EBIT margin.

Moving to the market then. We believe that the pulp market is healthy growing over time. In the core of the market, we have eucalyptus in the base, we have softwood. And then we have two very attractive growing segments, specialized pulp, which is the fluff pulp going into hygiene and demand driven by urbanization, driven by aging population across all nations, as well as the higher penetration of fem care, as well as baby in developing markets.

Now we have the unbleached specialized area as well, which is growing based on packaging and the wish for more natural looking packaging, but also, as I said, the electrification with needs for more cables, more transformers across the globe. So we believe that this market then can offer another $10 billion roughly in additional revenue possibility, as well as then an increased demand of pulp.

So diving into eucalyptus, and you heard Marcio talk about the actions we've been doing at Veracel to improve our plantations and our genetic material, the trees. Our eucalyptus is significant contributor to Stora Enso and to our packaging sisters profitability. They are underpinning the packaging BAs. Why? Because Veracel and MDP are two of the most competitive modern production facilities in the world in producing eucalyptus pulp. They offer $150 to $180 competitive advantage versus the average cost curve landed in Europe.

Not only is the operation of producing pulp very efficient and continuously aiming for even lower cash costs maintaining our position, it's also based on highly sustainable plantations where we are owning around 400,000 hectares divided between Brazil and Uruguay. And these plantations are based on nurseries where we are aiming to improve every tree, new tree we plant are a little bit better than the previous one.

And I'm just back from the Climate Conference in Belem. And there, we have showcased thirdly, on this bullet here, the third bullet. Our strong license operate in Veracel and MDP. We have had panels around resilient communities because it's fundamental for us that the communities around the sites, which are, of course, consisting of employees, providing income but also developing the communities in terms of resilience, increased income on average, education, land to live on has been fundamental. So climate -- resilient communities and climate resilient communities have been one of the showcases.

Second showcase we've had at the Climate Conference have been around reforestation. And in both Veracel and MDP, we have set aside almost half of our area to continue to preserve nature and reforestate. And then thirdly, last but not least, biodiversity to enable better fauna and flora and both maintain but also increase fauna and flora, where that's needed. And these very unique eucalyptus producing companies that we have are then really helping with integration benefits.

So we are the only EU peer in packaging, like you heard Hans talk about that have this possibility with own integration. And why is that better than just buying euca on the market? The reason is that we can supply consistent, sustainable eucalyptus to our very important customers in packaging which means that this gives a perfect optimized fiber mix. The perfect optimized fiber mix gives process stability. Process stability gives stability of the quality of the Board for our high-end brand customers.

So this is not only though advantageous for our packaging sisters. This is also super good for biomaterials business area because the integration offers us base demand regardless of the pulp cycle, meaning that we are less dependent on volatile spot markets as a business area and company.

Now I talked a lot about eucalyptus, and I promised to come back to the specialized rates. Here, we have two grades that we are absolutely uniquely positioned in. Fluff, we are the largest producer in Europe. And we are basically the only significant producer in Europe. The rest of the pulp -- fluff pulp in Europe is imported. And we are long term in this business. We've been here for over 50 years. And that is important in fluff because this is a highly technical grade with very narrow spec and it's next to skin. So it needs to be super safe and clean.

And as a curiosity, could you guess what the first grade was called because we started in 1969 with fluff. Revolutionary name, Stora 69. Here, our customers are today appreciating us for high sustainability, the high quality, but also our possibility to innovate and develop the fluff pulp according to their needs.

Moving from fluff then over to our unbleached grade, where the latest addition is the UKP Nova as we call it. Here, the Nova or unbleached as such offers 30% less carbon footprint, simply due to less need for bleaching chemicals. And my dream would be that all pulp would be less bleached. This is helpful in our packaging business, so we're already supplying Oulu, Beihai and Skoghall with UKP to support their sustainably looking packaging.

And in addition to that, we have a growing new customer base within electrotechnical and electrification. And here, I have some product samples because when I heard about this, I said, God on earth, what are you using that pulp for in the electrotechnical space? And I'm an engineer, so I'm somehow familiar to electrotechnical stuff. So we are pressing around here two pieces of board. Are they coming on that side as well? Yes, perfectly. There they are.

One of them, the thinner one, that is what is a pulp sheet looks like out of production. So that is a base UKP pulp sheet. The other one that when you take a look at it, I believe you will go to the construction store to buy. That is actually high dense UKP. And when you open up a transformer, you see more of that than the rest because everything needs to be insulated, isolated when it comes to electrotechnical applications. So this is a fantastic application supporting then the electrification and the reason why our UKP, so unique is due to its high cleanliness and then the very good quality.

So we are working here with new brand owners that are then supporting the growing electrification across the globe. But it's not only good for electrification. It's also good for water filtration, simplest application. I'm not sure we think it's simplest, but the simplest application, coffee filter. But then much more advanced purification of air in carts, water purification, of course, large scale as we need clean water every day -- for everyday life across the globe.

Okay. I've talked now a lot about pulp portfolio, and I talked about the market for pulp. What about the new bio materials? With the new biomaterials, we have concentrated our portfolio to three areas: all of these are strategically fitting being wood-based and they offer significant value creation into the future. The first one is the biochemicals.

The biochemicals is already an established business with the crude tile oil and turpentine replacing fossil-based chemicals and fuel. Here, we have also added the lignin business where we are offering nature's glue as that is what lignin does in a tree. It makes sure that the tree can grow higher than 20 centimeters. Without lignin no plant would be higher than roughly 20 centimeters. So it's the lignin that lose the fiber together. And we are offering nature's glue but also binders -- sorry, in binders for dye, so color clothing of clothes, colors of clothes. Without binders in the dyes, your all colors will be washed out and we would not look as nice as proper as we do.

This is an established business, like I said, it's already giving around 80-plus revenue per year for Stora Enso and steadily growing into new applications. The middle portfolio on the chart is the fiber business, and that is new applications for the fiber. Here, we have both papira and fibrease, which are bio phones that are replacing fossil-based cautioning or insulation with completely not only recyclable but renewable material, you can even compost papira at home, growing new trees or vegetables in your garden.

I have heard that Santa Claus are coming a little bit early this year. So maybe when you leave, he will be there with a small papira gift for you. So you can get a feel and touch of the material itself. Here, we are selling commercially already from the pilot, we have letters of intent to fill the first commercial facility. And we are just right now discussing with partners to have a good partnership set up where we both can have the production, but also the offtake as part of the company or spin-off or joint venture depending on the setup that we will decide upon.

Moving from the fiber business. Last but not least, maybe the coolest part of the company or our portfolio, lignode and carbon scape, so offering renewable materials into the battery itself. Lignode and carbon scape are replacing fossil-based or mined materials in anodes. This is an area where we are step-by-step and steadily moving forward.

Right now, we have 500 kilos or half a tonne of lignode being trialed with our customers and into sodium ion applications. And on the picture here, you have the first sodium-ion pack we made together with Altris, our -- one of our partners within this space. And here, we will continue to steadily expand this. We have moved the pilot from producing grams to producing tonnes and in value chain partnering setup, we will make sure to be able to take steady speed to market while ensuring we have all the right competencies and share risk and reward.

I had the third area that I was supposed to talk about. Do you remember? Maybe most interesting for you, that's our clear path for margin expansion. Shall I still cover that? I see some nodding faces. Let's go to that then.

So as I said in the beginning, we are around 10% now at the bottom of the cycle, proud of that. But we believe with own actions we can take that higher. In Han's presentation, three out of the six examples were examples from biomaterials and actions that we have in motion already delivering value to our bottom line. You heard Marcio talk about the plantations in Veracel with not only improving differentiation and silver culture in the plantation, but also making every tree a little bit better than the previous one.

We have right now have Montes del Plata in overhaul that we used to call annual overhaul. We are now first time into 18 months pit stop, and that is now implemented into foreseeable future, meaning that we can run more quantities between the overhauls, but we can also optimize the overhauls better because we have more time to plan between them.

And that's also true now for Veracel coming in, in Q1 as well as for Enocell, just out of the last 12 months pit stop, next one is in 18 months. We also have sourcing actions, making sure we leverage the volumes of Stora Enso with buying power when it comes to chemicals, and for our JVs with our joint venture partners. And then for our new businesses, we believe the partnering is a very good way to share costs of continued development that will be needed at the same time as expanding the margins for the revenues.

So to summarize, we are uniquely positioned to serve demanding customers with specialized pulp and new biomaterials. We have the fantastic eucalyptus, sustainable, underpinning packaging performance, as well as offering significant cash flow for the company. And last but not least, we have a very clear path of own actions to improve our margins. And as you heard me say, they are already in motion.

Thank you very much for listening. And I look forward to your questions and welcome Jutta on stage.

Thank you so much, Johanna. And I ask also Carolyn and Andreas to join us to the stage as well. So we are open for the Q&A session, and you guys know the drill by now. [Operator Instructions]

It's Lars Kjellberg at Stifel again. Andreas, you spoke to a couple of things. when it comes to BM6 and the cost curve, and Hans already spoke to agility. I guess in terms of that agility, given that you're still low cost from BM6 relative to some of those third and fourth quartile, would you have an agility to shift production away from those given the excess supply that we currently have to reduce the overall cost base and really ramp up BM6 quicker?

The second point on agility when it comes to sort of the long-term contracts that you have, it's obviously proven to be a bit of a headache considering the wood cost increases and the inability then to move pricing quick enough to compensate for that much higher cost if you can give us some thought on that?

And the final question is just -- so I understand exactly what you spoke to at Fors the sort of EUR 6 million, EUR 7 million benefit from buying Eucalyptus now, where does that actually come from? What is delivering that cost benefit for that particular site?

I'll start with the last one. So when you -- we were using other sources of pulp, birch pulp and other pulps, and eucalyptus is more affordable than those other pulp grades. So just by managing to keep the same specs of our packages with the eucalyptus pulps instead of the other grades, you get from that price difference that you get from our outlets. So we managed to keep the specs, don't change our product, don't change our offering to the customers, but work with the recipes by replacing other pulp grades. So that's where it comes from.

Then you asked about our contracts. And I think, yes, in the past, we have had some headaches as you referred to, we have also learned from them. And then just to address that specific topic, in most of our contracts which are multiyear contracts. We have no clauses when there is a cost disruption that this allows us to open a contract to renegotiate it.

But what we have also experienced in the recent past, even when the few cases when this was not in, that the customers were understanding of the situation, and there was a possibility for some upcharge. But we have now, in most of our contracts, if not all of them by now, which are over a year, inserted certain clauses that if there is a certain percentage disruption on costs, both sides agreed to renegotiate. So that minimizes the risk that we have faced in the past.

Then when it comes to the cost position in Oulu, yes, it's the market leader. And yes, it will allow us to grow our market share as we have already been doing, if you look at our relative performance in the market statistics. So -- and we have seen some of high-cost machines of other players already being shut down in Finland, for example. So I think that is something that is a possibility that this will continue to happen.

What we are doing is we're focusing on what we can control, and we go for the market share, we go for those bigger volumes, all allows us to be cost competitive in those bigger volumes. And then our -- let's take Fors for example. Fors has this incredible ability of serving especially smaller wheels, those niche products and that you cannot replicate in a big machine, you just lose too much efficiency. So it has its value there in the portfolio as well. And then again, there's so much more capacity at higher cost than our smallest machine in Fors.

It's Linus Larsson in SEB. And it's a question to all of you. It's pretty clear to me that you're very passionate about what you're doing. But I wonder what makes you tick on the -- when it comes to your private economy, which are your KPIs? And how are you incentivized? And how is that like aligned with the group targets that we previously talked about. And as part of that, how are your KPIs aligned with capacity rationalization? Is that -- are your KPIs preventing you from potential capacity rationalization or is there an alignment on that? I don't know who wants to ask -- who wants to talk and respond, but it's basically a question to all of you, I guess.

Thank you, Linus. Well, if I start, and let's put it pretty simple. We have short-term targets, we have long-term targets. Long-term targets are aiming for us to make sure to increase shareholder value over time. Short-term targets are geared towards delivering the short-term financial commitments. So in our short-term financial targets or short-term targets, they are around safety because, of course, nothing can be more important to make sure that you can come home from work, all safe and sound.

But after that, it's profitability and its operating working capital. So all the rest is falling out of that. So would we run uncompetitive assets? No, because that would eat EBIT. Would we build stock instead of making sure we could sell as much as possible?

No, because that will increase working capital just to put it simply. So I think the Board have done excellent in cooking this down to long-term measures supporting shareholder value long term, but at the same time, short-term measures being very crisp and clear and geared to what's needed within the coming quarters and years.

And if I just maybe build on that. There are also shared targets coming back to your capacity asset optimization. Like me and Marko over there under his responsible foodservice and liquor, we share some assets that also means we have shared targets. So I have order incentive to maximize value regardless of where. So as I said during the presentation, I'm data-driven. I have not particularly -- not a lot of any of my machines. I just wanted to generate as much value as I can. And that will be done by optimizing their product allocation to the lowest cost assets wherever they are.

It's Charlie Muir-Sands from BNP Paribas. I just had a question. Firstly, a follow-up. You mentioned a clause to kind of revisit pricing where you see cost movements. I mean, it looks like wood costs are maybe starting to come back down now. So does that cut both ways? Do customers have the right to kind of come back and say, "Well, hang on, your wood costs are coming down. So can we have a lower price on our consumer board, please?"

And secondly, there was a comment earlier about flexibility of the machines. I understand the new Oulu Machine 6 can obviously produce a couple of different grades. But can you talk a bit more about the flexibility you have within the rest of the asset base and what you've got now and maybe what you can add to that flexibility in the base over the next couple of years?

If I would start more broader and then you can fill in maybe. In a performance culture like Hans talked about the forays, it's not you know that you work very hard when the market is tough, and then you sit lean back when the market is good. So we are working -- we are in a continuous improvement culture. If I take Montes del Plata, we are now in our eighth year of the journey of improving cash cost.

So regardless whether the market goes up or the market goes down, we continue to strive for higher efficiency, better yield as well as higher quality. So that is kind of the fundamental in this because we cannot steer the market. We shouldn't steer the market even, right? So we have to work on the things we can control, and one of them is, for example, cash cost. And all the business areas have similar efficiency KPIs that are in the spot simply.

Andreas, maybe you want to add something from specifically?

So back to the contract question first. It's not like a couple of percentage points, 2 or 3, 4 percentage points that triggers these clauses. There needs to be a major shift in the cost structure, like the war that happened 3 years ago. So that created a big disruption. So those are the kind of events that this contract -- this clause aims at.

And of course, it goes both ways. It would not be fair with our customers that we only look to what is important for us. I think it needs to be a fair, win-win situation, and that is what is reflected. But again, it needs to be a major disruption. So the smaller up hikes, down hikes, those we will have to manage ourselves.

Then on the interchangeability, so we have two main -- or three main grades, if you will, in BM6 in Oulu. CKB, which we also produce in Skoghall, and that is exactly the same recipes. And then we have also Performa Nova, our GC2 and Performa Lumi, our GC1. Those have been based on the recipes from Fors. We are working and we continuously work with our development. So there is now some interchangeability also among other assets, for example, Imatra and Fors.

Andrew Jones from UBS again. I just want to talk about a future capital investments. I mean, clearly, you're talking about getting the debt down and reducing the CapEx in the nearer term. I'm wondering under what circumstances you'd be talking about going ahead with, say, the Langerbrugge conversion. That's obviously something you've talked about being an attractive project in the long term. Under what circumstances would you commit to that?

And also on the Lignode side, I mean that was obviously talked about more actively, I think, a few years ago. What sort of capital requirements would that business need to scale that? And could you maybe give us some idea about the sort of longer-term market opportunity in that business? And again, what circumstances would be required to move that forward?

Should we start on the capital allocation or capital needs. So I think Langerbrugge, of course, I mean, we have talked about it in the past, and I think it makes a lot of sense in a market where integration actually is the key to win in corrugated and container world. The market is oversupplied as we have discussed today also. So this is probably not the best moment to bring new capacity to the market, but I'm absolutely sure that the market consolidation will also continue as we've seen and as we've spoken.

So the market consolidation will continue in containerboard and also in corrugated. And I think this is then maybe a couple of years down the line. And then this investment makes total sense because we have a very, very good footprint in Western Europe right next door, basically. So we could replicate the situation we discussed in Poland, also then to Western Europe. So this actually makes a lot of sense. Not at this moment in time in the market.

But going down the line 2, 3 years, this will actually be a very, very meaningful future potential investment.

And if you kind of boil that down, I think what will make us consider future investments. First of all, we are well invested. Even take fluff that I talked about, we have spent already EUR 100 million to modernize and make sure to have a fluff production that is top-notch.

To invest more in fluff, it would be a need to have a very good business case. And that I think is true for anything. It needs to be good shareholder value and there needs to be customers out there that want to buy this and need this, right? And that's true for, I think, any business looking forward. So shareholder value, customer commitment.

And with those words, it is very good to conclude the Q&A session for this one. Please let's continue the discussions during the lunch break. But before that, let's hand over still to Hans for concluding remarks. Thank you.

Thank you very much, team. Thank you to all. It's now time to conclude. And there are three key takeaways I would like you to take with you from this Capital Market Day.

First of all, we are sharpening our focus. We are creating two leading champions in their fields to maximize business value but also to maximize shareholder value. Then number two, we are executing on our margin expansion, profit improvement actions with speed and determination, building on our performance culture throughout the whole company.

And number three, we are generating cash. We're really focusing now on cash generation, disciplined capital allocation. We have strong world-leading asset base. We can capitalize on the heavy investments on our leading assets, our leading product portfolio. Now it's really the time to harvest.

With this word, we thank you all for your active participation, and we end the webcast by now. So thank you, and bye-bye.

Hello, everyone, and welcome to Stora Enso Investor and Media Webcast. My name is Jutta Mikkola, and I'm the Head of Investor Relations here in Stora Enso. With me today is our President and CEO, Hans Sohlstrom; and our CFO, Niclas Rosenlew. We are hosting this special webcast today in the light of the exciting news released this morning. We will begin with a short presentation followed with a Q&A session. [Operator Instructions] The call is scheduled for 30 minutes.

With these words, Hans and Niclas, the stage is yours.

Good morning, good afternoon to all of you. We are excited about the news we have released today. We have made a decision to create Europe's largest listed pure-play forest company. So the Board of Directors has decided to move forward with the demerger, and this is really exciting news because it's there to unlock the full business potential of both the forest company as well as the renewable materials company, maximizing shareholder value, optimizing capital allocation and also reducing complexity, increasing business focus in both companies. This forest company would comprise 1.2 million hectares of forest land in Sweden with a fair value of approximately EUR 5.7 billion. The company would be listed on the Stockholm as well as Helsinki Stock Exchanges with the headquarter in Falun, Sweden.

The demerger is expected to be completed during the first half of 2027, and of course, it's subject to approval and signing of the demerger plan by the Board of Directors and approval by a general meeting to be convened separately by the Board at a later stage.

Next page, please. So the planned demerger would maximize shareholder value, and it would maximize also the business value in both companies because they are distinct 2 different operating models, business models. We have Stora Enso, the group, global leader in renewable materials with a sharpened focus on renewable packaging, with strong market positions, world-leading and European leading market positions, customer-centric offering based on sustainability and innovation, very flexible, integrated and cost competitive production and a tangible path to grow the company as well as also continuing our determined actions to improve profitability.

The new forest company would be Europe's largest listed pure-play forest company. And we know that there is a big appetite for investment in this type of assets. It's a unique class of assets, and we anticipate continued long-term value appreciation. The last 30 years shows that Swedish forest assets have been appreciating with an average of 7% per year. There are strong tailwinds for this business from renewable materials, renewable energy and new carbon sequestration revenue models. So there is potential for lots of significant new revenue streams.

Next page, please. The demerger time line is as follows here. We have a Capital Market Day now coming up on the 25th of November, where we will provide more information. And there will be also a separate Capital Market Day focusing on the new forest company during next year and then the listing of the new forest company is expected to take place during the first half of 2027.

Next page, please. Then we have also today announced a strategic review of our Central European sawmills and building solutions operations. This concerns one business unit within Wood Products. We have been operating this entity as a P&L responsible business unit since the 1st of July, and it includes 7 sawmills and 3 CLT plants in Austria, Czech Republic, Lithuania and Poland as well as also wood procurement in that region serving these units as well as international sales and distribution operations globally.

Also, we see that this is an attractive business, and there are strong growth prospects driven by sustainability trends it does not bring strategic or operational synergies to our core renewable packaging operations. The sawmills and the further processing units in the Nordic countries, they bring synergies to our packaging materials and pulp operations that are located in the Nordic countries. And as you recall, they have been organized within the business units of these board and pulp mills as from the 1st of July. So the strategic review will assess different scenarios, including the possibility to divest this business during next year. In the meanwhile, operations serving customers will continue as normal.

Next page, please. And there are some implications to our group leadership team. First of all, Tuomas Hallenberg, who is currently leading our Forest business area, has today been appointed CEO, President and CEO of the new Swedish Forest business entity. As from the 1st of January, we will start running this entity as a company or as a unit within Stora Enso until the demerger. So Tuomas is building up the organization, the structure, the business, everything related to this so that we can demonstrate the performance of this unit and be in a flying -- being flying with this business also then at the moment of demerger.

We have created a new business area led by Pauli Torikka, the business area Wood and Energy, which includes the Wood Products South unit as well as all the wood sourcing, wood trading as well as Energy that we will start leading as a business. So he will join the group leadership team as from the 1st of January, leading this new business area. Hannu Kasurinen, who is currently leading Containerboard business area, will retire by the end of this year after having served Stora Enso for a remarkable 32 years. Big thanks to Hannu for your valuable contribution. And Lars Volkel, who is currently running the Wood Products business area has been appointed Executive Vice President, Containerboard Business area as from the 1st of January, succeeding then Hannu.

Next page, please. So all in all, the new Wood and Energy business area is including all the wood sourcing, wood trading, which is a significant operation, all the Wood Products supply chain and sales centrally, even if the P&L of our Northern wood products units are part of the board and pulp mill business unit, and it will include the Energy that we are now starting to steer and lead as a business. We have important energy assets, and we have also important external sales of energy, and we see that there is a possibility to maximize profitability by leading this as a business instead of as an internal service.

And the Central European sawmills, the business unit, Wood Products business unit South will then also report into this business area during that strategic review. So this business unit accounts for a significant part of our operations. And we are going to drive profitability and operational synergies efficiencies also through this new business area.

Next page, please. So all in all, we have the Capital Market Day coming up here, and now we are prepared to take your questions.

[Operator Instructions] Our first question comes from Cole Hathorn at Jefferies.

I'd like to start off with the Forest spin. Is there any details that you can give on the EBITDA or how you're thinking about the new entity dividend policy, how much debt you're going to allocate to the new business? Or is that something that you're going to provide with the Capital Markets Day or still to be set into the future? Any details you can provide on the future of the new forest entity would be helpful.

Thank you, Cole. We will give some further information on the Capital Market Day. But as I said, we will also organize a separate Capital Market Day for the forest company during next year, and that is really the moment for all the more detailed questions. But certainly, in the next Capital Market Day, 25th of November, there will be further opening up around the forest company as an entity.

In that case, let me focus on the strategic review of the sawmill and Building Solutions business. Stora Enso has got a very strong position from a market share globally, you've led the CLT business. I'm just wondering the time to sell this is really where we see a construction recovery. How are you thinking about timing so that you get the best value for this? And does getting rid of the global sales network impact any of your Nordic sawmills by not having access to that kind of sales team?

Yes. We have thought through this very, very thoroughly. And of course, timing is important, and that is also why we want to take some time for this strategic review. So we will look for the best timing to maximize shareholder value. So this is -- we don't have any pressure to divest, but I think it's also good when it comes to our strategy, focusing on renewable materials with a special focus on renewable packaging to also clarify this question. And that is why we have initiated and published this strategic review. And when it comes to the sales also there, we have thought it through and we have arrangements how this can be taken care of without any dissynergies.

Our next question comes from Reinhardt van der Walt at Bank of America.

First, I just want to get a sense of how we should think about, I guess, the equity story of this new forest company and sort of what the management team's mandate will most likely look like? I mean, is this really just going to be sort of a holding company for real assets? Or do you think that there is some kind of optionality that can be exploited in the new vehicle as well?

So clearly, the mandate and the target for the management of this company is to maximize shareholder value, so to maximize value of that very important asset valued at EUR 5.7 billion. And there are many ways to maximize the asset value. There is, first of all, efficient forest management, harvesting. And you know that we harvest less than the growth. So the standing stock is increasing continuously, also supporting value growth. And there are also other revenue streams.

We have some unique features like precision forestry, a digital twin of all the forests, not only our forest, which actually gives us an opportunity to optimize. We have even found more productive forest land using this very, very good AI-based digital tool. There are also new revenue streams from renewable energy, wind, solar, where we have a big untapped potential.

And there are new -- completely new types of carbon sequestration markets evolving here, like, for instance, we can rewet peatland, which is nonproductive forest land and by rewetting a dried peatland, we can tie up 250 tonnes of carbon per hectare of peatland, and there are companies who are prepared to pay for these services. And there are many other recreational services, land optimization. So by focusing and developing this business, we can significantly accelerate also value creation. And just as a reminder from our stock exchange release, during the last 30 years, the value appreciation of Swedish forest in general has been 7% per year.

Understood. And if I could just do one quick follow-up. The non-Sweden forest assets, can we expect a similar process to be run for those assets, potential private sale? Or do you think those remain naturally in the rest of the portfolio?

Well, this concerns now our Swedish forest assets, the 1.2 million hectares. And regarding the rest, there is no further considerations or plans at this moment.

Our next question comes from Charlie Muir-Sands at BNP Paribas.

First one just relates to the decision to do the spin-off. I think you clearly before indicated that was the strong preference. But did you explore the possibility or did you entertain any offers from third parties for a sale of any more of the forest at all?

Yes, of course, we have thought about all the options, and we know quite well the sale option because we just end of September, concluded the sale of 175,000 hectares of forest land in Sweden, which was sold at an enterprise value of EUR 900 million. So exactly at our book value, including a long-term wood supply agreement. And through that process, we also have a very good view of the big appetite actually for this type of assets, this type of investments. And that's why we are also encouraged to move forward with this demerger. And we think that there will be a great appetite for this asset class among lots of institutional and also private investors. So yes, of course, we have been looking into various options and alternatives.

We see that this way forward is absolutely the most attractive solution for our shareholders. Our current Stora Enso shareholders will become shareholders in this stock-listed company with the same ownership share as they have in Stora Enso today. And we think it's also the most shareholder-friendly alternative so that shareholders, depending on the appetite for risk and return, they can also make their choices about where they want to allocate their investments. We think this is a great opportunity to unlock shareholder value and to maximize shareholder value in Stora Enso.

And just on the remaining Stora Enso entity, you're clearly going to be left even more reliant on external wood sourcing even if that external sourcing is from the forest company. So how do you aim to protect the company from the wood cost pressure, particularly given notwithstanding the fact that wood costs are starting to come down. They have been quite volatile and put a lot of pressure over the last few years. Are you aiming to secure long-term pricing agreements? Or how are you going to manage the greater operational leverage of the remaining company?

Yes. Yes. Thank you, Charlie. Well, also in this case, as we said in our stock exchange release, there will be a long-term 18-year supply agreement in place, but gradually decreasing committed volumes to Stora Enso and increasing volumes to third party or possibility to increase volumes to third-party other customers. We think it is important for the optimizing the business in both companies. And -- and already today, I mean, our Forest business area has been operating on market practices, market price practices. So the transfer prices to our industrial activities are market-based. So we know what it means also for our industrial activities.

And we are convinced that with the determined actions we have to improve our margins, our -- reduce our costs, improve our cost competitiveness, we will be successful with the renewable materials company also with less direct forest ownership.

May I just add, Hans and Charlie, I mean this is -- we are talking about 7% less -- significantly less than 10% or 7% of our wood supply today. So it's not like it's a major change globally. Of course, locally, it is. But already today, 93% is bought outside.

93% at a group level is already bought outside on a net or gross basis? I thought you had 35% self-sufficiency.

Yes, that's the gross because we are also -- we are doing significant wood trading. So we are buying much more wood and then selling to third party. So that would be the gross figure. The gross figure, yes. correct.

[Operator Instructions] Our next question comes from Linus Larsson at SEB.

Clearly, Stora Enso is refocusing on packaging, and that's even clear with today's announcement regarding the strategic review that you're now initiating with regards to the Continental European sawmills. And a couple of things in relation to that. First, if you could provide some reassurance that you will make sure that you will not sell these assets at a point in time when simply they will not provide you with the appropriate value for shareholders. And if markets aren't supportive that you will basically hold back on such execution.

And then secondly, I mean there are other assets as well in the group, which are not directly or not obviously supporting a packaging strategy. So -- and I'm thinking maybe especially not about the forest, but the pulp mills, you have 4 stand-alone pulp mills, you have a net long position of some 2 million tonnes per annum around the world. Could you just update us on your strategic thinking around your positioning in market pulp as well?

Yes. If I can take your first question here. So first of all, we can assure you that we will -- if we divest and when we divest, it will be -- the timing will be the right one to maximize shareholder value. Our most important job, my main KPI and Niclas' main KPI is shareholder value maximization. And let's remember that we have significantly strengthened our balance sheet with the forest deal just recently. And also this demerger will further allow capital allocation optimization and debt allocation optimization, so strengthening further the balance sheet significantly of Stora Enso renewable materials company. So yes, I can assure you, Linus.

Regarding the pulp mills, actually, they are a very integrated part of our renewable packaging growth strategy. Let's remember, for instance, that with the new Oulu consumer board line, already today with that unit fully ramped up, 75% of our ownership share in Veracel, which is one of the most cost competitive eucalyptus mills in the world, will go to our internal use. And we see a clear trend of increasing use of eucalyptus pulp in our board production in Europe. It is cost efficient, and it's a clear trend that we are leading in this area.

Let's also remember that this is a competitive advantage for Stora Enso. We are the only European packaging material board producer with own cost-efficient assets in South America. So they are an integral important part of our packaging materials growth. But Niclas, do you want to add?

No, no, that was actually...

And just now you mentioned the LatAm mills, just to make sure, is that also your thinking? I mean, Skutskär, Enocell is somewhat different setup. How do they fit into the increasing focus on packaging in the group?

They also fit in there quite well. Enocell, for instance, is supplying unbleached kraft pulp to our board mill in Beihai to produce CKB, where actually we are the only producer in China. The rest is imported from the U.S. that gives growth opportunities. And Enocell is also supplying internally to some of our other mills. Skutskär, even if it's Europe's largest producer of specialized fluff pulp, it is also supplying some pulp to Skoghall, for instance. So there is a certain integration also there between these Nordic pulp mills.

Our next question comes from Robin Santavirta at DNB Carnegie.

I have a question related to this 18-year wood supply agreement. How does that work in practice? First of all, why 18 years? Is there some regulation that steers you to that sort of why not 35 or 50? And then secondly, it seems other companies can also -- or the forest company can also supply to other companies. Is that correct? And then finally, related to this, your mills are really not that close to your forest. So you must have bought a lot of wood raw material from other suppliers. So how much of -- how much did Stora Enso's industry account for the sales of your forest before this transaction? So those ones.

Robin, good to see you again. The -- on the 18 years, I mean, this is -- we are creating 2 independent and strong companies here. And of course, both need to work independently, both need to stand on their own legs. And at the same time, of course, securing a good kind of runway for both businesses. And in terms of the length of the wood supply agreement, I mean, we have experience. We have a wood supply agreement in place also for the 12% that we sold and a lot of thinking has gone into that. And this is a balance. This is something which we view is optimal and good. And there's a certain -- and we'll come back to that in future meetings in CMD and so on.

But there's a ramp-down period in terms of exclusiveness and again, important that the new forest company can stand on its own legs and also create its own business. We see a lot of good reasons for why to continue to be tightly or trade between the 2 companies, but also there's an importance in this independence.

And as we mentioned before, so about 7% of our total wood procurement, gross wood procurement comes from these Swedish forest assets, the 1.2 million hectares today. But we also -- we sell -- we buy and sell. We buy from private forest owners, and we sell also quite a lot of wood to third-party forest industry companies. So yes, we have a significant wood trading business, and that is also one of the basic ideas of the wood and energy business area that we have created.

And can I squeeze in another one. When I look at the financials of the Forest segment, and then when I compare it to, say, Tornator, there's quite a big difference in earnings and cash flow as they're stand-alone and they are very optimized. So they're clearly ahead of you on the Swedish forest assets it seems. Do you think there is a potential for the Swedish forest assets, earnings and cash flow to reach those levels that Tornator has reached? I mean they were very weak 25 years ago before the split or the formation of Tornator. Now the numbers look completely different. Can you do the same journey in Sweden?

Just on the numbers, and Hans, you can take the second part of it. But we have not split out the Swedish forest numbers. So of course, one can do kind of backward calculations and end up, but I would caution everyone a bit that don't draw too kind of detailed conclusions on the Swedish forest numbers before we are at that stage where we can talk about the real facts.

And I think, Robin, spot on. I mean one of the main reasons for this demerger is that with full focus, with full development, incentivizing the management with a dedicated Board of Directors, there is potential to accelerate value creation within this very focused Forest business. And let's also remember that our forests in Sweden are located in the south, mid part of Sweden, where also the growth of forest is clearly higher than in the more northern part in Sweden. So there are forests and forests in Sweden, and these are great forests.

We have reached the end of the Q&A session and have run out of time to take any further questions. I shall now hand the call back to Hans Sohlstrom and CFO, Niclas Rosenlew, for closing remarks. Thank you.

Well, thank you very much for your participation today. We are very excited about this. Our main objective is to maximize shareholder value through the performance of our operations and our business, and we are confident that, that is taking -- these decisions today are taking us in the right direction. We are continuing to execute on our strategy, building a better, stronger Stora Enso and building the world-leading forest -- pure-play forest company with speed and determination. Thank you very much for your attention. Have a good day. Bye-bye.

Hello, everyone, and welcome to Stora Enso's Third Quarter Results Presentation. I'm Jutta Mikkola, Head of Investor Relations, and I'm joined today by Hans Sohlstrom, our President and CEO; and Niclas Rosenlew, our CFO.

The theme for today is good progress in a challenging market environment, which indeed we have done. We'll start with Hans, who will walk us through the key highlights and strategic focus areas. After that, Niclas will take you through the financial performance, and we'll wrap it up with the main takeaways and key focus for the rest of the year '25. Once we are done, we'll open the floor for your questions.

Thank you for being here with us today. Hans, over to you.

Thank you, Jutta.

In the third quarter of 2025, despite ongoing challenging markets and subdued demand, we remain focused on the areas within our control, driving progress where it matters most. However, before looking more closely at the third quarter highlights, I would like to announce changes in Stora Enso's Group leadership team. Micaela Thorstrom has been appointed Executive Vice President, People and Legal, General Counsel, as of 1st of January 2026. Micaela has been part of our group leadership team since 2023, serving as Executive Vice President, Legal and General Counsel. Furthermore, Niclas Rosenlew, our Chief Financial Officer, will assume additional responsibilities and represent the Communication and Brand organizations on top of his current duties. I want to congratulate both Micaela and Niclas for their new and extended roles.

Then we are ready to look more closely at the quarterly highlights. We have taken important steps to build a stronger and more competitive Stora Enso. A major milestone in the quarter was the completion of the divestment of approximately 175,000 hectares of forest land in Sweden, representing 12.4% of our total forest holdings in Sweden. The transaction with an enterprise value of SEK 9.8 billion, equivalent to approximately EUR 900 million and in line with forest book value, strengthens our balance sheet and improves our financial flexibility.

The deal includes a long-term wood supply agreement to Stora Enso. This strengthens our cash flow and reduces net debt, which is a key priority for us. We also made progress on the strategic review of our remaining 1.2 million hectares of Swedish forest, including the assessment of a potential demerger and public listing. This review is central to unlocking further value for our shareholders, as well as strengthening our growth and business focus in both forest and renewable packaging businesses. We'll share updates as that process moves forward, aiming at Capital Markets Day later this year on November 25.

On profitability, we continue to act proactively to improve margins. These measures are essential as we navigate challenging market conditions and subdued consumer sentiment. Adjusted EBIT for the quarter was EUR 126 million. Excluding the EUR 45 million impact from the Oulu consumer board ramp-up, profitability would have been comparable to the same quarter last year, reflecting a stable underlying performance despite persistent market headwinds.

And finally, on sustainability, we launched a science-based framework together with IUCN to advance nature-positive forestry practices. This is an important step towards our long-term environmental goals. As we all know, market conditions have been challenging. Therefore, we have intensified our actions to improve profitability. But it's important to emphasize that these efforts are not new. We have been acting on these priorities for a good while now.

Since 2023, we have been very clear on our strategic focus; improving profitability, driving performance and shaping the portfolio for long-term strength. This has been our new way of working proactive, not reactive, so we can stay ahead of market turbulence and rapidly changing global trends.

On fixed cost reduction, we launched significant cost-saving programs in 2023 and 2024, totaling over EUR 230 million of savings. These include structural efficiency measures, site closures and divestiture across business areas and the group. Operational efficiency has been another key focus. We have implemented FTE reductions, cut external spend and driven value creation initiative across the whole company to streamline processes.

Building a strong performance culture has been critical. More than 4,000 improvement measures have been identified with around 800 initiative team leaders, meaning that thousands of our employees are actively driving continuous improvement and cost savings initiatives across the company every day. We have also strengthened cash flow and working capital discipline, reducing operating working capital by about EUR 700 million and improving cash flow from operations. Going forward, we remain committed to disciplined capital allocation.

Finally, on portfolio actions. On top of earlier closures and divestments, we completed the sale of 12.4% of our Swedish forest assets and continue the strategic review of the remaining assets in Sweden. At the same time, we are ramping up Oulu consumer board line and De Lier corrugated site to secure cost efficiency and competitiveness. This approach gives us resilience and flexibility. By acting early and decisively, we have not just reacted to market challenges, we are shaping our future and positioning Stora Enso to thrive in a rapidly changing world.

And with that, let me give you an update on the Oulu consumer board line ramp-up. Stora Enso's

new consumer packaging board line at the Oulu site in Finland has entered the production ramp-up phase earlier this year. While the project remains on track in terms of its original time line and the EUR 1 billion budget, the ramp-up process has progressed slower than initially anticipated, resulting in production volumes somewhat behind the original schedule.

Nevertheless, we remain focused on reaching EBITDA breakeven by the end of 2025, which continues to be an achievable target. However, due to the slower-than-expected ramp-up, the EBIT impact for Q4 is now projected to be higher than previously anticipated, estimated at about EUR 15 million to EUR 35 million. Consequently, the full-year EBIT impact is expected to be in the range of EUR 120 million to EUR 140 million. It is important to emphasize that the Oulu investment is a long-term strategic move that will deliver substantial value for Stora Enso over time. This transformation of the Oulu site into a state-of-the-art consumer board production facility is a cornerstone of our strategy to lead in renewable packaging. This investment is not just about near-term volumes, it is about building a competitive platform for the next decade and beyond. As the ramp-up continues, we remain confident that Oulu will become a key driver of profitable cost competitive growth and a benchmark for sustainable packaging innovation.

This year, we have seen some remarkable recognition for our design and innovation. Winning the Red Dot Design Awards 2025 underscores our ability to combine aesthetics, functionality and sustainability in everything we create. Our craftsmanship was showcased on the global stage at the World Ski Championships where we designed official medal boxes crafted from renewable materials, fully recyclable and even featuring braille for accessibility. This is not the first time we have been recognized by Red Dot.

Earlier this year, we also received the award for our collaboration with Marimekko on a scalable, recyclable gift packaging portfolio. One of the most exciting milestones is our contribution to Atlassian Central in Sydney. Once completed, it will be the world's tallest hybrid timber tower, and the heart of this achievement is massive timber solutions. It's a powerful demonstration of how engineered wood can transform urban skylines while reducing carbon emissions.

Closer to home, October brought us the Finlandia Prize for Architecture for our new headquarters at Katajanokan Laituri in Helsinki. This award celebrates not only architectural excellence, but also our leadership in sustainable building practices. Together, these achievements highlights how innovation and responsibility go hand-in-hand in shaping the future of construction.

That concludes our review of the key highlights for the quarter. And I'll hand over now to Niclas, who will take you through our financial performance.

Thank you, Hans, and hello, everyone.

During the third quarter, as Hans already mentioned, our own actions resulted in good progress in a market with subdued demand and low consumer confidence. Delivery volumes were relatively low, particularly in containerboard and biomaterials. Sales increased by 1% to EUR 2.3 billion, mainly due to the contribution of the Junnikkala acquisition and the consumer board line ramp-up at the Oulu site. While market conditions continues to be volatile with low demand, we focused on the areas within our control.

On that note, adjusted EBIT for the quarter was EUR 126 million. And as Hans mentioned, excluding the EUR 45 million impact from the Oulu ramp-up, profitability would have been comparable to the same quarter last year, reflecting a stable underlying performance despite persistent market headwinds. This we can see clearly when looking more closely at the EBIT bridge for Q3.

Overall, adjusted EBIT decreased by EUR 49 million compared to last year, primarily due to the ramp-up of the new line in Oulu. As said, Oulu had a negative impact of EUR 45 million. In the other bar, where you can see the Oulu impact, you can also see the absence of a EUR 10 million insurance compensation that was received last year in the Wood Products segment, along with some other smaller movements.

Looking at the other components, the picture is relatively stable. Given how volatile the markets have been, we are quite pleased with this, as it reflects the result of disciplined execution of our strategy and profit improvement actions. Price/mix contributed positively with EUR 12 million, partly offset by a smaller negative impact from lower volumes. Variable costs were flat as higher fiber costs were offset by lower energy and chemical costs. Fixed costs decreased by EUR 30 million, driven by strong cost control and lower maintenance compared to last year. And FX had a negative impact of EUR 20 million.

If we then turn the focus to cash flow, despite the challenging market environment, we managed to safeguard profitability and improve cash generation. Cash flow after investing activities turned positive as expected, following the gradual completion of the investment phase in Oulu. I want to note that in this picture, which shows the operational cash flow after investing activities, the proceeds from the Swedish forest divestment, so the 12% divestment are not included. These proceeds were received in Q3, but they are recorded further down in the cash flow statement under divestments.

And on that note, let's take a look at the net debt. Net debt decreased by almost EUR 800 million to EUR 3.2 billion during the third quarter, reflecting the positive impact of the forest asset divestment. The ratio of net debt to the last 12 months adjusted EBITDA is now at 2.7x after being above 3 for most of the past 2 years. As the intensive strategic CapEx phase of the last 2 years nears finalization and profitability gradually improves, net debt levels and the ratio are expected to improve further. Operating working capital to sales was around 8%. That is at similar levels to the last few quarters. We intend to keep operating working capital at these lower levels and decrease it when possible.

So, let's move on to the segment performance. Starting with Packaging Materials, where we continue to implement value creation actions during the quarter to mitigate the impact of the challenging market conditions. Sales declined mainly due to slightly lower consumer board prices and adverse currency effects from a weaker U.S. dollar. Adjusted EBIT decreased year-on-year by EUR 37 million, primarily due to the adverse impact coming from the Oulu ramp-up.

In addition, fiber costs remained high and logistics expenses and trade tariffs increased, adding further pressure on profitability. These headwinds were, as said, partly offset by value creation initiatives. As order inflow weakened further during the quarter, we continued to manage capacity and cost levels in line with demand.

In Packaging Solutions, we had a similar development, with market headwinds being offset by own actions. Sales increased slightly, with improved product mix offsetting a small decline in volumes. Adjusted EBIT increased year-on-year, supported by higher sales and improved margins driven by value creation initiatives. Despite persistent overcapacity, actions to enhance product and customer mix, combined with continuous cost efficiency improvements helped protect margins.

So moving from packaging to Biomaterials. In Biomaterials, market conditions stabilized at low levels during the third quarter. Demand for hardwood pulp strengthened in both Europe and China, while softwood pulp demand in Europe remained weak. Sales decreased driven by lower prices and adverse currency movements, somewhat offset by higher volumes. Adjusted EBIT decreased year-on-year, primarily due to lower prices, but as said, stabilized at low levels. Cost reduction measures also helped mitigate part of the negative market impact.

If we then move on to Wood Products, protecting margins has been a key priority mitigating the increase in raw material costs. Sales increased, driven mainly by higher prices and stronger volumes for sawn wood. However, EBIT declined, primarily due to increased sawlog costs in Central Europe and the absence of last year's EUR 10 million insurance compensation, which affects comparability. That said, price increases and value creation initiatives helped cushion the impact and protect margins. The construction market remained weak overall, but we did see improved demand for both traditional wood products and building solutions compared to the previous year.

In Forest, sales increased, driven mainly by higher volumes and wood prices. However, EBIT declined slightly due to slightly higher costs. So in sum, Forest continued its stable and strong performance.

I'll now hand it back to you, Hans, for the key takeaways and our focus for 2025.

Thank you, Niclas.

Today, we have focused on profit, performance and portfolio, 3 pillars that guide our actions as we navigate a challenging market and position Stora Enso for long-term success and improved profitability. Profitability and cash flow remain top priorities, supported by company-wide initiatives in sourcing, operational efficiency, commercial excellence and cost optimization to ensure resilience and agility.

We are finalizing the strategic review of our Swedish forest assets, including evaluating a potential separation and public listing to unlock value and sharpen our focus on core businesses. At the same time, we are ramping up production and leveraging the EUR 1 billion investment in new packaging board line at our integrated mill in Oulu, Finland, strengthening our competitive position in renewable packaging and advancing our ambition to lead in sustainable solutions. These actions are critical steps towards delivering shareholder value and navigating in tough markets. We look forward to sharing more at Capital Markets Day on the 25th of November in London.

Thank you for listening. And we are now ready to take your questions.

[Operator Instructions] Our first question will come from Cole Hathorn with Jefferies.

Could I start with the cost positioning that you -- well, the improved costs in the Biomaterials and Packaging Materials division. The cost per tonne has come down. You talk about efficiencies. Are we right to assume that this is your internal actions that have supported the lower cost per tonne rather than lower pulpwood or wood costs feeding through into the business sooner? So that's just the first question, if it's internal actions.

The second one is around the Packaging Materials business and particularly consumer board. We've got a lot of oversupply in the market. And I'm just wondering how Stora Enso is thinking about that strategically. You are the market leader. How do you think about improving operating rates as you ramp up Oulu versus the price dynamics of the market? Are you still considering, or are you evaluating capacity out in the industry?

Yes. Thank you very much, Cole. So first of all, about the cost improvement actions, they are internal actions throughout the whole company. And we have started this very proactive systematic work on reducing our cost base, both variable as well as fixed cost since 2 years back. We are going to give some updates about this in the CMD on the 25th of November, some tangible examples of the way we are working, but it's significant cost reduction results throughout the whole company. And this is not a project. This is our new way of working.

This is a continuous improvement work. It's our new culture where basically we have identified over 4,000 profit improvement actions throughout the whole company in every unit, every middle, every single part of the organization. And we have 800 project initiative team leaders working on these. So, we have thousands of people actually actively working on cost improvement actions and profit improvement initiatives as we speak. It's not a project. It's our new culture, and it's a continuous way of working.

When it comes to your question, Cole, about consumer board, we know that there is in Europe alone, 1 million tonne of higher cost consumer board capacity than our most expensive, most highest cost line. We also know that we have in consumer board, the most cost-efficient capacities in Europe today. So currently, we don't have any plans to consolidate or close capacity. I'm sure there is considerations in our industry for those who have negative cash flow, for instance.

Then maybe just as a follow-up. I'd like some color on what are you seeing from a demand and order book perspective? And could you give some color between containerboard? And then within consumer board, what you're seeing the difference in kind of the traditional folding boxboard as well as your liquid packaging?

Yes. So first of all, year-to-date, we have increased our top line by 5%. So, we are growing as a company. And also in the last quarter where demand was rather subdued, we grew 1% and we are quite determined to continue growth. We have invested in growth in the Oulu consumer board line, as well as also we have the De Jong corrugated site, which is in a ramp-up phase still. So, thanks to earlier investments, we have cost competitive state-of-the-art capacity that we are ramping up in order to ensure also continued growth for the future.

And when it comes to consumer board versus containerboard, I would say that our operating rates in containerboard are quite high. And as you also know, from a global supply and demand perspective, especially kraftliner, which is our strength, our core area in containerboard, that is actually a market where the global supply and demand situation is the best. The market is the tightest. And when it comes to consumer board, we have very cost-efficient, high-quality capacity that we are currently utilizing and then also ramping up in Oulu.

Our next question will come from Andres Castanos with Berenberg.

Can you please help me understand why did you book a gain of EUR 140 million with the forest asset sale, if this was a sale that was done in line with book value? And also, what is your current view about the deferred tax liabilities associated to the historical appreciation of the assets that you sold? What will be the treatment in your view?

Sure. And it is a bit of a complex accounting issue, but the sale of the 12% was in line with book value. And there was a portion in the book value, which is deferred tax liabilities. As you said, the sale was tax-free according to local tax rules. We sold the company, not the assets. And therefore, from an accounting perspective, we then kind of canceled the deferred tax liability and that portion was then going into the P&L. So it's more of an accounting technical topic.

Our next question will come from Charlie Muir-Sands with BNP Paribas Exane.

There's been quite a lot of talk in the industry about falling pulpwood prices and some mixed messaging around log pricing. I just wondered what you're seeing specifically yourselves at the moment and how soon you would anticipate it manifesting, in your opinion, if there are movements?

Secondly, I appreciate you're going to give us an update on the possible forest spin-off at the Capital Markets Day. But can you share any early thoughts on what you see as the relative pros and cons of making such a transaction?

And then just on De Lier finally. The ramp-up there, you haven't quantified what the profit drag is unlike Oulu. I wondered if you could put any numbers around that? And also, is the constraint for the De Lier ramp-up technical? Or is it that it is constrained by market demand conditions?

Thank you very much, Charlie. So first of all, wood costs have come down in the Nordics, both in Finland and Sweden since the peak in the summer. However, before they are visible in our P&L, there is a time lag. And actually, in the beginning, there is a negative impact because the inventory values of our wood inventories comes down. But there will be with a time lag of a few months, there will be, of course, a positive impact of lower wood costs in the Nordics.

Concerning the forest, the Swedish forest spin-off, 1.2 million hectares in total. I would say that the clear plus is -- and that's also one of the main objectives, shareholder value creation. I mean, we clearly see that now after the sales of 12% of our Swedish forest land, the total value of all our forest holdings is EUR 10.50 per share. And the whole idea here is to unlock value for our shareholders, as well as also being able to focus on the very different businesses of creating value and profits in a forest business, as well as creating value and profits in industrial activities, renewable packaging and biomaterials businesses. Regarding the De Lier markup, the bottleneck is the market. So it's demand. We are gradually increasing volumes there. But of course, in an oversupplied market, it takes time.

Got it. So far, you've not identified any cons in terms of the possible price spinoff.

Can you think about any, Niclas?

I can't immediately at least. We'll think about it.

Our next question will come from Pallav Mittal with Barclays.

Very quiet. Maybe we take the next question then.

Our next question will come from Andrew Jones with UBS.

Can you hear me okay?

Yes.

Excellent. A few of my questions have already been answered, but just a bit of color on 4Q first of all. You mentioned that the fixed costs were down EUR 38 million in 3Q, mainly on seasonality. I'm curious like how much of that should come back in 4Q? And taken together all the other moving parts on costs, I'm guessing that the wood costs don't make that much of a difference in the 4Q given the lag. But can you talk us through like wood, energy, some of the other moving parts as to how you see costs evolving into the fourth quarter?

And then separately, I've just got a question on FBB sales to the U.S. I mean, is that profitable now? Like how should we think about margins on sales there? Have you changed your sales mix as a result of the tariffs and the currency moves? Like how are you looking at the different markets for your boxboard at the moment?

All right. Andrew, I'll take the first one. So fixed costs, very much as we said and we've said before, I mean, we are working a lot on cost scrutiny. And this is nothing new. We've been on it for some time, but there's still a lot to do. So, not commenting specifically now on Q4, but even kind of further out. And that absolutely will continue. Specifically in Q4, we continue with the normal maintenance. Maintenance stops should be roughly similar cost to Q3.

And then on wood cost specifically, very much, as Hans said, we have seen some downward trend. And now we talk about the Nordics, Finland, Sweden. It's different in Central Europe. But again, very much as Hans said, it comes with a delay and we talk about a quarter or 2 or so. When it first goes into the inventory valuation, inventory value actually goes down. It has a slight negative impact on the short-term result. But then, of course, over time, it should start to help the result. So in that sense, it takes a while and don't expect any major impact or positive impact in Q4. Well, I mean, logistics has gone up a bit, chemicals down a bit, energy down a bit. So it's a bit more of a mixed bag.

So flattish sounds like the interpretation.

Flattish, yes. Well, again, not commenting specifically on Q4, but more what we've seen up until now and in Q3.

And when it comes, Andrew, to your question about folded boxboard and the U.S.A., I mean, we have been increasing prices in folded boxboard sales to the U.S. We have been able to compensate a clear majority of the 15% import duty. But on the other hand, of course, also, as we know, during this year, the U.S. dollar has weakened against the euro quite significantly. We are making positive margins on our business to the U.S., but very thin margins. That's where we are today. However, having said that, I do want to underline that if you consider our packaging materials, our board grades, our main board grades, so consumer board various grades as well as kraftliner and then I exclude recycled fiber-based testliner because that's a very local business. But if you look at consumer board and kraftliner, it's good to remember that the U.S.A. is a 4 million tonne net exporter around the world of these products.

So if profitability of sales to the U.S. is challenged, there are also other opportunities around the globe to develop businesses. So, I think one of my favorite sayings is that every challenge is an opportunity. You need to also find the new businesses and the new opportunities, but we have not given up on the U.S. We continue to develop our business there. But of course, in order to improve margins, we need to increase prices further.

Our next question will come from Linus Larsson with SEB.

First, just to double check here, so we're not missing anything on Biomaterials. It was sequentially somewhat better in the third quarter, although prices were lower and I think your volumes were lower as well. So if you could just maybe elaborate just a little bit about what happened in the third quarter? I think we may have touched on part of it already. And just to make sure that we're not missing anything, any benefits which might not be there in the fourth quarter, please?

Yes, I'll start at least, Linus. And I mean, what we saw in Q3 was a stabilization at low levels and so stabilization. So, I would say no major movements there, volume, price that I can think of at least in terms of what to miss now going forward.

If I can build on that, Linus, so I think it's important when you consider our Biomaterials business. So, our market pulp business, we have -- the majority is cost-efficient eucalyptus from Veracel and Montes del Plata, as you know very well. And they are among the world's most cost-efficient pulp mills in the first quartile when you take, for instance, Safra's cost competitive -- cost capacity competitiveness considerations. So, great cash machines in every situation.

And then the market pulp mills we have in the Nordics, so Skutskar in Sweden and Enocell in Finland. They are producing specialized niche pulps. So Skutskar, the majority is fluff pulp, where we are clearly the largest producer in Europe. Most of the fluff pulp in Europe is imported from the U.S.A. So it's a specialty pulp grade. And also in Enocell, we are gradually increasing the amount of specialized pulp grades, among others, unbleached kraft pulp for electrotechnical end uses and other special niches where you can get a better price compared to the volume grades. So, that perhaps also explains somewhat our position in Biomaterials.

And if you compare the various units within Biomaterials, is there a material profitability difference in, say, the third quarter? Or are they all doing pretty well?

Again, we haven't really split out the profitability of every mill. I mean, as we've commented before, I mean, we very much look at -- I mean, each and every component, mill needs to be profitable, goes without saying, deliver positive cash flow. But of course, as Hans said, I mean, the South American operations are kind of absolute cost leaders. So no answer, Linus. No direct answer, at least. I hope it's okay.

Building on that, I would say that based on this product differentiation and specialization in the Nordics, I'm pretty sure that there are lots of pulp mills in the Nordics producing standard volume grades that are not doing as well as we are doing.

That's helpful. And then just one more follow-up on Oulu. And maybe if you could just briefly touch on or give an update on your commercial plans for the output from Oulu, 750,000 tonnes, that's a big amount of paperboard. Where will you allocate those volumes? And have plans possibly changed from your original plans?

Well, Linus, first of all, I think it's important to remember that the line will be, as we have said from the beginning, fully ramped up and in full capacity in 2027. So also next year will be a year of gradually increasing production and sales volumes. Quality is good, really good. We have received very good customer feedback. It's also important to remember that that Oulu is not producing only folded boxboard. It's also producing CKB, for instance, where there are only 2 producers in Europe. We are producing CKB on 3 production lines, and then there is a competitor producing on only one small production line. So it's not only folded boxboard.

We also have some other consumer grades in the Oulu production unit. Then also, I want to remind everyone that Oulu is not only for us an increase in carton board capacity because we are also transferring carton board volumes from our liquid packaging board mills, for instance, Skoghall into Oulu, which gives us an opportunity to grow in liquid packaging board. So basically, Oulu is providing opportunities for us to grow in all the product areas we have within consumer board, both carton board, liquid packaging board, food service board and so on.

And when it comes to our sales plans, so, of course, I mean, our job is to maximize profitability. Our job is not to follow a certain plan, but to maximize profitability in every situation. And therefore, as we discussed before, it's clear that the margins in the U.S. because of the 15% import duties are thinner than what we anticipated before the tariffs came in place or the plans for import tariffs came in place. And we are actively looking to maximize profitability by optimizing our market mix and our customer mix as well as product mix. So, we really look to place those volumes wherever we can maximize profitability and value.

So it's not any board, it's the best board.

Well said. Thanks, Niclas.

Our next question comes from Pallav Mittal with Barclays. [Operator Instructions]

Can you hear me?

Yes, we hear you, Pallav. Good to hear you.

Sorry about that. Some technical issues at my end. A couple of follow-ups on some comments that you've already made. So firstly, on Oulu, I appreciate all the commentary that you have made and clearly, volumes you have highlighted are currently running behind schedule. So, what gives you confidence that you are still on track to reach full capacity by 2027, especially given the overcapacity issues in Asia?

And then secondly, in the third quarter, EBIT, you have almost 30 million-odd fixed cost savings, and these are your cost savings program over the last couple of years. Can you help us understand how much of those 2 programs is already in the numbers so far? And how should we think about further improvement in Q4 and also in 2026?

Yes. Thank you very much, Pallav. So if I take the first question and Niclas, the second one. So first of all, Oulu, I mean, we are ramping up. And I would say that especially the last months have been very encouraging in terms of optimizing the production processes there. And that gives us really confidence that we will be able to reach the full capacity from a production perspective in 2027 as we have forecasted. Then, of course, with a relatively weak oversupplied market that also, in a way, restricts the speed of ramp-up and ramping up the volumes.

Then you mentioned China. We were just last week in China. We know that what is happening in China is that, for instance, there is a lot of the local folded boxboard, which is called Ivory board, taking market share from higher cost recycled fiber-based grades, so what they call Duplex there, which we call testliner in Europe. We can see similar trends in Europe, folded boxboard, virgin fiber-based top quality carton board, taking market shares from recycled fiber-based white-lined chipboard. You can, for instance, with our folded boxboard, you can basically with 30% lower basis weight, you get better characteristics, product folding characteristics, printing characteristics, a cleaner sheet, better looking board than with white-lined chipboard.

So, we see also migration there from the European 3 million tonne annual white-lined chipboard market into carton board. And in China, there is a 6 million tonne of white-lined chipboard or Duplex market that is gradually being substituted with the local folded boxboard. So, we cannot only look at the specific product segments as such. There is also important movements happening between these product categories.

But now over to you, Niclas, for the second question.

On the costs, so what comes to the previous programs, more than EUR 200 million, they are done. But as I said earlier, we are very active in terms of looking at our competitiveness, our cost base throughout. So, we'll continue with scrutinizing fixed costs. We'll continue with scrutinizing variable costs. We have, as discussed earlier, we have the programs with more than 4,000 initiatives, 800-plus initiative owners and they continue. And they are now -- it's not a program. It's more of a culture. And that we intend to keep up and if anything, speed up. At the same time, -- as you know, we made a big organizational change in the summer, 1st of July. We have 7 P&L responsible BAs, 22 P&L responsible BUs. And then we moved some of the functions to cut across the company. And now there, we are taking the next step and looking at how do we make this new kind of construction to make all it so more efficient.

And there's been some articles or some press picking up on some of our actions we are doing across, but that's just some of the actions we are doing a lot under the hood. And that's the whole idea. These are not programs per se, but we are day in, day out looking at how we make sure that we are competitive and create value for our customers.

Our next question comes from Lars Kjellberg with Stifel.

I got thrown out earlier due to power cut. Not helpful, but back on again. So essentially, a couple of questions for me still. Coming back to wood markets. Obviously, there's been an exceptionally tight market now in the Nordics. Now the industry certainly from the pulp and paper industry is not running full. Prices are starting to get a bit. But what is your thinking in an upturn in this market again in terms of the wood supply that is available?

And in that context, coming back to what you said earlier, Hans, about maximizing profitability. can you operate everything, including your new assets from a wood supply standpoint on a competitive level? The other thing that you mentioned earlier was disciplined capital allocation going forward. I just wanted to understand what does that mean? You put in a lot of money on growth. You continue to talk about growth. And if I'm looking at some of the markets you serve, in particular the consumer packaging, there's no growth in this market since 2016. The volumes are the same. So, how should we think in that context, your focus on growth versus what's happened in the market and in the context of capital discipline what does it really mean?

And the final point then. Holmen earlier today talked about stable generally prices on consumer boards for the contract business. But if you try to go after new volumes, there's a tremendous amount of pricing pressure. So the question is, what are you finding on that incremental volume that you're trying to place relative to the contract business in terms of pricing pressures?

Yes. Thank you very much, Lars. I'll let you take the second question, but a couple of comments. First of all, starting from your last question about pricing, yes, we see consumer board prices or board prices in general, stable. When we are now introducing our own new volumes to the market, very much we gain business, we gain volumes with yield advantage. Our folded boxboard, for instance, from Oulu has a 30% to 40% yield advantage compared to white-lined chipboard or SBS, some of the other board grades. So also with a higher price point for folded boxboard, you can basically prove to customers that the total cost of ownership goes down when they move to our grades instead of what they are using currently.

Then regarding -- and also one point on growth. If you look at Stora Enso during the last 10 years, you will notice that our core packaging business has been growing an average 5% per year. That's the growth we can demonstrate since 10 years back in our packaging business. So yes, our top line has been about unchanged, around EUR 10 billion, but we don't have basically any printing papers anymore and we have a significantly bigger packaging business. So, 10 years ago, packaging and printing papers were roughly equal size, representing almost 40% of our total turnover each. And today, packaging is representing 60%, whereas printing paper is almost 0.

When it comes to the wood costs and the supply and demand situation for wood in the Nordics, I think that we have seen here this year that the wood costs have reached the pain point, the pain levels. There has been significant curtailments in pulp capacity without mentioning any names of our competitors, but there have been very long curtailments, showing that when you are producing standard volume bulk pulp grades, it doesn't make sense to run at these higher wood cost levels. So, I think the proof is in the pudding, and we have seen that these levels basically forces the volume producers of pulp to take curtailments and shutdowns, extended shutdowns. And as I said, since the summer, we have seen wood costs now moving downwards.

But then over to you, Niclas, for the other part of it.

Yes. So Lars, on capital allocation, and this is something we'll come back to as well in the CMD, but as we all know, I mean, we've had over EUR 1 billion CapEx now for a couple of years. This year, we'll go down to some mid-700s and likely down from there somewhat. We've done a lot of work internally, thanks to great efforts by the team to kind of create -- really kind of categorize our assets, run for cash assets, key growth assets and so on. And we see that we can become more disciplined by just doing internally being very structured, having criteria, return criteria, of course, but also other criteria for where to allocate the capital when talking about CapEx.

So, there has been a lot of work going on recently on this, and we'll come back and explain a bit more what it means in detail. But CapEx is now on a downward slope. And as Hans said here earlier and as you know, we have made quite significant investments. Oulu is one, of course. De Lier, De Jong is another. And now going forward, we, of course, need to show the results of these and reap the benefits of them. So, essentially kind of no major CapEx kind of initiatives here in the near horizon. We have what it takes essentially to -- sorry, we have what it takes to grow essentially.

Yes. So in '26, what does that mean for CapEx? What do you think you're going to land roughly?

Let's come back to that. As you know, we are typically in the beginning of the year in connection with Q1. We'll give an idea of next year, but down from where we are this year.

We have reached the end of the time for the Q&A session. I shall now hand back to Hans Sohlstrom and CFO, Niclas Rosenlew, for closing remarks.

Well, thank you very much for your attention. Thank you for joining this call. And just -- we are powering ahead. We are focusing on profit, performance, as well as our portfolio to maximize shareholder value. That's our ultimate goal to create the best possible value to our shareholders.

Thank you very much. Looking forward to meet with you then in the next quarter. Bye-bye.