UPM-Kymmene Stock

Hi, everyone. Welcome to UPM Quarter 2 2026 Results Webcast. I'm Massimo Reynaudo, I'm the CEO of UPM. Here with me is Tapio Korpeinen, the CFO. Well, in the second quarter this year, we reached two important milestones in our transformation. First, we signed a definitive agreement with Sappi to create the graphic paper joint venture, and we secured financing for it. Second, we advanced the separation of the plywood business into the future WISA Group. Following these steps, UPM is becoming an increasingly focused advanced materials and decarbonization solution company with stronger growth prospects and improved earnings quality.

Next, looking at the quarter 2 business performance, all our businesses improved their results from last year. Most also outperformed the previous quarter. Increased volumes, disciplined margin management and continued efficiency improvements supported our profitability in a business environment that turned inflationary. Our quarter 2 sales grew slightly, and our comparable EBIT from continuing operations increased 71% year-on-year, reaching EUR 212 million or 9% of sales. I am here referring to continued operations because the UPM Plywood business is now presented as discontinued operations in our reporting. Including plywood, UPM's total EBIT was EUR 230 million.

Now let's take a look at the businesses in some more detail, and let's start with Decarbonization Solutions with another stronger quarter for this segment. If we start with Energy, the business improved its results from last year. You may recall that commenting the strong quarter 1 performance back in April, we talked about seasonal and structural factors. When it comes to the seasonal factors, quarter 2 followed the normal seasonality, which means lower electricity consumption compared to quarter 1, which is the winter period. However, on the other side, here comes the structural element. The electricity consumption beyond seasonality in Finland keeps on growing. It has grown by 5% over the last 12 months.

This is a structural growth element, which is expected to continue in the coming months and years, driven by the electrification of the economy, the installation of new data centers, which is now happening at scale, and the installation of green industries, which represent more of a future prospect at this point in time. Beyond the quarterly dynamics, the effect of this structural increase is well visible in the performance in the first half of 2026 being well above the performance of the corresponding period last year.

In a market where demand is expected to grow faster than production, we are in a unique position to generate value. The new large-scale consumers need three things to happen at pace; locations where to install data centers or other industrial projects, grid connections to feed them with energy, and reliable baseload CO2-free energy. When it comes to the locations and grid connections, we have prepared a portfolio of suitable industrial sites with existing or close by connections. This is important as site readiness speeds up permitting and construction.

As for energy supply, well, we can offer 12 terawatt hours of clean baseload power through PPAs. If market conditions made it relevant and financially attractive, we could also add additional renewable power as we have developed a pipeline of potential wind and solar power for an extra generation up to 1 gigawatt ready to be built early as 2027. Now if we look at the next-generation renewables, we have there two businesses. And when it comes to biofuels, the business recorded a strong results that we are making visible in the slide here in this midyear update. The results were supported by good demand and healthy bio premiums for advanced renewable fuels. Sales prices were further supported by higher fossil fuel reference prices during the disruptions in the Middle East crisis. The business achieved an EBIT margin of 35% in this first half of 2026.

On the biochemicals side, the ramp-up of our biorefinery in Leuna in Germany continues. Customer deliveries of industrial sugars reached substantial volumes and deliveries of renewable functional fillers and other lignin derivatives are expected to start during quarter 3. With these things progressing, we have now locked the date for the official site inauguration, which is October 15, and we will be happy to invite you to visit the site, but we'll communicate more about this later on.

Let's move now to Advanced Materials. In this segment, both the Adhesive Materials and Specialty Materials businesses achieved robust mid-single-digit sales growth and double-digit EBIT margins in quarter 2. The underlying markets continue to grow in Europe and in Asia with some further support from stock building or stock buying during the uncertainty triggered by the Middle East conflict. On the other hand, the North America market remained rather soft. This performance has been supported by strong commercial focus, development in higher-margin categories or higher growth geographies and continued actions to sharpen competitiveness.

More in detail, adhesive materials has been and is investing to accelerate its growth in the U.S. and build stronger positions in higher growth regions in Asia. Specialty Materials, well, their main focus at the moment is on barrier papers, which is a high-growth segment in the market. It is about papers with barrier treatments that enable the replacement of plastic or multilayer product in consumer applications like, for example, food or pharma.

Let's turn the page and moving on to Fibres. Well, if we start with Fibres South, or our world-class pulp platform in Uruguay, it has continued to improve its efficiency and performance for several quarters in a row now. In quarter 2, this helped to offset the increases in logistics and other costs and expand profits and margins. The profitability was also supported by a moderate increase in hardwood pulp prices.

During the quarter, Fibres South reported a comparable EBIT of EUR 101 million or 24% of sales. On the other hand, the Fibres North platform in Finland, well, for it, the business environment remained challenging. Even though pulpwood prices have decreased, profitability remains low. Fibres North reported a comparable EBIT loss of EUR 10 million in the quarter, performance being impacted also by the maintenance shutdown in the Pietarsaari mill. In the current challenging market conditions, in order to protect the profitability of the business, we're planning temporary shutdowns at the Kaukas mill and potentially at the Pietarsaari mill, so to optimize production and wood sourcing.

Next, talking about Communication Papers. Well, the business delivered relatively solid results during the quarter. As everybody knows, the business is characterized or this market is characterized by a structural demand decline. However, during the first part of the year, the decline has been moderate compared to previous periods. We are talking about a minus 3% in Europe year-on-year and about flat in the U.S. in the categories relevant to us. In an inflationary environment, the business focused on disciplined margin protection and the quarter ended with a comparable EBIT of EUR 32 million or 5% of sales.

Plywood continued to perform well, and its results improved from last year, proving the solidity of the strategy and the effectiveness of its execution. The comparable EBIT during the quarter was EUR 16 million or a 14% margin, 13% of sales. Due to the demerger process, this is not part of continuing operations reported today.

Talking specifically about this business, about the Plywood business, 3 months ago, we announced the demerger plan to separate UPM Plywood into a new independent listed company named WISA Group. The plan is to list the new company on the NASDAQ Helsinki in early November. During the quarter, we have made progress with the plan and now, the demerger and listing prospectus is available on our website for consultation.

In this slide, you can see the financial targets of WISA Group. These targets underline the ambition of the new company to grow between now and 2030, supported by the proven ability to deliver robust and resilient profits, together with the ambition to maintain strong financial discipline and the confidence to be able to pay good dividends. The extraordinary general meeting to decide on the demerger plan will be held on August 31. We believe this operation will create long-term value for the UPM shareholders.

As an independent company on one side, WISA Group will be able to pursue its own strategic priorities and growth opportunities with increased focus and the required agility. At the same time, this simplifies the UPM business portfolio and increases its focus on growing segments. But when it comes to the other significant transformational initiatives about Communication Papers, well, preparations continue at full speed for the planned graphic paper joint venture there.

In quarter 2, as I said earlier, we made another significant step ahead as we signed the definitive agreement for the joint venture with Sappi, and we secured financing for the new graphic paper company. As a reminder, we are planning an independent graphic paper company, 50-50 between UPM and Sappi, which would include all of UPM Communication Paper business and Sappi's graphic paper business in Europe. The transaction would create a more efficient, adaptable and sustainable graphic paper business. It would create a structurally competitive cost base and supply security for European and global customers.

For UPM, the transaction would have a positive impact on profit margins and the balance sheet. UPM would no longer have direct sales exposure to the declining graphic paper markets in Europe or in North America. The transaction, as a reminder, is subject to merger control approval by the European Commission and authorities in other jurisdictions. The work in this area continues to, and we expect the final resolutions by the end of this year.

Now if we broaden the focus beyond quarter 2 and to where we are going as a company, with these portfolio changes implemented, we also changed the profile of the company, increasing its growth potential and margins. As already illustrated in other occasions, and it is visible in the charts on the right, the growth on this new perimeter is not just a future ambition. The business that will belong to the new UPM has shown a strong track record of realized growth above GDP during the last years already. We aim to accelerate this growth with a sharper focus and targeted investments. But the portfolio will not be just geared more toward growth. It will also be more balanced as well.

In this visual, you have on the slide, you can see the profit generation between Decarbonization Solutions, Advanced Materials and Renewable Fibers. The basis here is the first semester of 2026. And you can see that it is already quite balanced. Now indeed, if we look specifically to the Decarbonization Solutions segment, the profit generation represented here is impacted by the negative contribution of the ramp-up of biochemicals. So this means, in reverse, that as soon as that negative will turn into a positive, the share of Decarbonization Solutions generated profits will be even larger. And so it will be the ones of Advanced Materials because of the continued growth in this segment.

In other terms, if we project this view in the future, we will have a portfolio made of decarbonization solutions, energy, biofuels, biochemicals with significant growth potential. Advanced Materials, which is adhesive and specialty materials, with good growth, good margins and low CapEx needs. And Renewable Fibers, that is one of the most efficient cash engines in the whole industry already today. Growing each of these three parts with their different profiles and potentials will ensure good returns and balanced performance across all economic cycles.

But now I'll pause and I'll hand it over to Tapio for more comments on the results.

Thank you, Massimo. And here before going into the numbers, I'd like to come back to the point that due to the demerger plan in this second quarter report, UPM Plywood is presented as discontinued operations. So in other words, this means that the continued operations of UPM here are presented as if Plywood was already separated from UPM. This also means that the discontinued operations that is presented here, it is sort of the residual of that sort of calculation of what UPM would look like without Plywood. This means that there are some notable differences. If you look at then the reported figures for Plywood as a segment, for instance, the sales line is significantly less for the discontinued operations here as compared to the reported sales line for Plywood as a segment.

So the point here is that, first of all, financial information here presented as discontinued operations is not a representative presentation of the historical or future profitability of UPM Plywood as a stand-alone business. For information related to WISA Group, where we have the demerger plan and the prospectus approved and in public domain. So for that information, I would say, please look at the figures in the prospectus.

Then the other point, which Massimo has referred to as well here already is that most commentary that we are now giving here is regarding UPM's continued operations, meaning Plywood not included. That also then is the case for our guidance for the second half. So for the first half, we had the guidance EUR 325 million to EUR 525 million, and we landed to the upper end of that range at EUR 504 million. That was given for UPM as a whole. And now for the second half of the year, as said, this is given for continuing operation without Plywood. So when you are sort of comparing to your own earlier estimates or guidance or sort of expectations earlier in the consensus estimates for the quarter and therefore, second half, please take that into account.

But then if we go into the figures, so as Massimo already mentioned, our sales from continuing operations then grew slightly to EUR 2.355 billion and the comparable EBIT increased by 71% to EUR 212 million. EBIT margin increased from 5.3% to 9%. Then here on the left-hand side, you can see the second quarter EBIT compared to the last year's second quarter year-on-year. And here, you can see that variable costs have decreased in most businesses compared to the second quarter last year. Impact of sales prices on the group level were neutral. Prices increased in energy and biofuels. In other businesses, there was a slight decline on this year-on-year comparison. Delivery volumes increased and fixed cost down by EUR 23 million. Exchange rate changes were slightly negative in terms of impact to the EBIT.

And then finally, the fair value change of forest assets was negative EUR 24 million in the second quarter '26, which is a EUR 30 million negative difference compared to last year. And then on the right-hand side, the comparison to first quarter this year sequentially. And you can see that variable costs started to increase. So we saw some turn to inflationary environment on the cost side. Wood costs were still coming down, but many other costs increased, for example, logistics costs. We were also able to increase prices in most businesses, however.

Delivery volumes were slightly lower than in the first quarter and fixed cost increased by EUR 46 million. This is partly seasonal by nature, but then also impacted by the higher maintenance activity in the quarter. We had the Pietarsaari maintenance shutdown, for instance, in this quarter. In Q2, we also had the Olkiluoto 1 and 2 nuclear power plant units in the annual maintenance shutdown. And the overall maintenance impact of this on EBIT was, in round figures, EUR 55 million.

Finally, the fair value change of forest assets, again, minus EUR 24 million in the second quarter. That is a EUR 28 million negative difference to the first quarter. And then this slide shows you our cash flow in the first half of the year. And many differences there that are sort of circled in this slide. First of all, temporarily impacted by increase in working capital, also by cash payments or the cash effect of restructurings made last year where the provision was made last year in the P&L and then items affecting comparability, such as this one-off type effects or items related to the transformational projects.

So starting from the working capital and looking at the first half figures, we tied up EUR 339 million of working capital in the first half, partly seasonal like we have discussed earlier, but also the basic point is that as our activity increased, our sales was up by 7% or EUR 335 million in the first half of this year sequentially compared to the second half of last year. So this obviously then had an impact on particularly receivables, inventories as well. This means, looking at it the other way around, that we have been able to improve and maintain our working capital efficiency. Obviously, we are working to continue to get more efficient on working capital. But again, the sort of working capital turns did not change as we had this increase in the top line. But the target is to release capital from working -- or cash from working capital during the second half of the year.

But then as mentioned, last year, we made significant restructuring actions, particularly in Communication Papers, but other parts of UPM as well. Restructuring costs were booked as provisions in last year's result. And now then you see the cash impact on this utilized provisions line. And then we also had, as said, several one-off type costs related to the portfolio transformational projects that we have ongoing. And this impacts obviously also one-off type temporary items.

On the positive side, EBITDA has increased by EUR 93 million compared to last year or by 14%. Investing cash outflow, EUR 191 million, smaller than last year, as expected and indicated, as we have discussed this CapEx profile before. And you may remember that our guidance for the full year 2026 CapEx is around EUR 300 million. So then, how this shows up in our balance sheet as a result of temporary low cash flow, but then also including the first payment -- first installment of the dividend, EUR 396 million paid out during the quarter. The net debt increased in the second quarter. But we do expect then to work our way down in terms of the net debt during the second half of the year.

Then here, we have the outlook and profit guidance for the second half of the year. As mentioned earlier, once again, the profit guidance is given for the continuing operations, excluding Plywood. On that basis, we expect our comparable EBIT in the second half to be in the range of EUR 375 million to EUR 575 million. On the same basis, the comparison figures in the first half of 2026 were EUR 471 million and EUR 479 million in the second half of 2022. Now in the second half of this year compared to the first half of 2026 sequentially, we expect moderately higher sales prices and moderately higher variable cost as well.

As usual, Communication Papers will book the energy refunds in the fourth quarter. And also in the second half, we will have more maintenance activity, Olkiluoto 3 maintenance shutdown and Paso de los Toros maintenance shutdowns are both now in the second half of the year, both facilities on an 18-month cycle. And this sequential impact compared to the first half of this year coming from the maintenance -- higher maintenance is around EUR 40 million. And then as activity increases further in Leuna, we expect to incur somewhat more operating expenses ahead of the sales ramp-up. So some headwind on the EBIT there.

In the second quarter 2026 -- second half 2026 compared to last year, 2025 second half, we expect higher sales prices and moderately higher variable cost. Then our last year comparable EBIT in the second half included EUR 131 million of forest value gains. And this year, we expect any valuation impacts to be significantly smaller. We know the trajectory of wood cost now is different in Finland and has been during the past 9 months than what we saw during last year. Also, we have seen some increase in discount rates. So therefore, one can say that the difference in the impact of the forest value change can be up to a 3-digit figure.

Also in the comparison to the second half of 2025, maintenance activity is expected to increase, and that is actually similar, around EUR 40 million difference in comparison in maintenance impact to last year's numbers. Energy refunds booked in Communication Papers in the fourth quarter are expected to be somewhat smaller than last year, around EUR 40 million less impact than last year. And then finally, in Leuna, we expect costs to increase year-on-year as activity is higher. So that is about the outlook.

And now I'll hand it over back to Massimo for some summary notes.

Thank you, Tapio. And right, in the spirit of a summary, I just want to recap the key elements covered during this call. We had a positive quarter 2 with improved results in all businesses and significant progresses in our transformational projects. From an operational standpoint, going ahead, our focus will remain on fostering performance, margin protection and stabilized underlying cash flow. From a strategic standpoint, the focus will be on progressing on our transformative initiatives. If so approved by the EGM in August, at our next quarterly call, we will be a few days away from the listing of WISA Group, which is planned for the beginning of November. And that will complete the strategic review we have initiated about 1 year ago.

At the same time, we will be closer to the end of the year. That is where we expect the completion of the merger control activities related to the joint venture with Sappi. In other terms, we are getting closer to the point in time where the new UPM I described earlier will become a full reality. But we will have some more time to talk about this later. For the moment, this concludes the presentation, and let's open up to questions.

[Operator Instructions] The next question comes from Ioannis Masvoulas from Morgan Stanley.

Two questions from my side. The first on Leuna, one point to clarify. Do you expect the peak ramp-up costs to occur in the second half of 2026, and beyond that, we should see a moderation? And related to that, could you talk about the timing of reaching positive EBITDA at the assets? And I'll stop here for the first question.

Okay. I'll pick your second question. I'll leave -- let Tapio to comment on the cost ramp-up in the second part of 2026. I would say there, we are proceeding more or less in line with our schedule that we have, and that is in line or at the base of what we have communicated earlier on. And that points toward reaching breakeven -- sorry, capacity -- sorry, production capacity and therefore, breakeven in 2027. So no big change or nothing more to add from that standpoint. And then I leave the other part to Tapio.

Yes. So Ioannis, on the first part of your question, well, I can sort of refer to the third page -- third slide of the presentation where we have the kind of trajectory on the biochemicals impact on EBIT. And as we state in context of outlook also sequentially second half this year to first half, we then are guiding for some additional headwind -- negative difference on EBIT level for the biochemicals business. So when the ramp-up is proceeding, we are incurring still additional OpEx and of course, depreciation then as well during the second half of the year. So it will be some further headwind on the EBIT level.

And second question on energy, where you talked about up to potentially 1 gigawatt of new renewable capacity should market conditions justify that investment. How do you think about project returns? And how do you think about assessing this opportunity relative to some other opportunities or relative to returning money back to shareholders?

Well, if I comment on that. So first of all, what the -- what Massimo is referring to there is the fact that we have on UPM lands where we have, let's say, unique conditions in a sense that we can fit a world-scale solar or wind park on UPM lands and where the conditions are very competitive for that type of renewable energy generation. We have been in the process of permitting solar and wind projects. Then when and how it would be time to actually make the investment decision, obviously, is dependent on growing demand and a customer who has the demand from a new wind or solar park and therefore, also is interested to have a PPA agreement connected to the new park.

So on a merchant basis, in the conditions in the Finnish energy system, it does not make sense to invest in this. But then if you can derisk the project and these once again are in locations that are very competitive in the Finnish landscape or environment, then there can be investments to be considered and depends then finally on that contract structure, what is the required return vis-a-vis what is the sort of derisking related to the PPA contract.

And in general and beyond that, as you also asked about comparatively to investment in other areas or returning that to shareholders, I would say the general criteria in this case, that would apply here, apply -- are the same that apply to other businesses. The return of the business need to be well above the cost of capital and then the risk profile of the investment plays a role into [ OBI ] compared to the cost of capital it plays. But we're talking in general here because Tapio has explained very well the nature of the contract, and the situation will help determining these parameters.

And if I can squeeze a last one on WISA Group demerger and the targets. So you have a 2030 revenue target that is about 30% above the 3-year trailing average for that segment. Is that sales target purely organic? Does it assume any potential M&A? And related to that, the gearing target of 1.5x, does that assume that you can transfer some debt in the order of EUR 100 million to EUR 150 million as part of the demerger?

Well, maybe if I'll comment on that as well. Again, let's say, in the prospectus, you can see some indications of what is kind of the level of debt or impact on UPM indebtedness. But let's say, broadly one can say that we will start with a relatively low level of leverage as far as WISA Group balance sheet is concerned. Impact on UPM is minimal in terms of our net debt to EBITDA. But then to the sales target, of course, let's say, looking at the comparison figures, it's good to keep in mind that last year, we had the strike for our Plywood business in the second quarter of last year.

So that plus the fact that we have had lower construction activity and therefore, in the segments where then we are selling to construction-related end users, that has meant that we also have taken curtailment sort of short-term layoffs. And there are sort of two points to that. One is that on one hand, even in these conditions where the Plywood business certainly has not been enjoying sort of high cycle demand, it has been able to generate quite a solid result if you look at the last sort of 12 months, after considering the impact in the second quarter or kind of adjusting for the impact on the second quarter last year of the strike. But then it means also that there is now operating leverage through which this sales target is achievable without any, let's say, major investments or capital projects.

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

Just want to talk about the Sappi JV. You kind of alluded a little bit to time line before. But can we just get an update on exactly where this is in its regulatory process? Just noting that back in June, I saw some headlines that there was a delay in the process because of access to information.

Okay. Reinhardt, thanks for your question. It also helps if that is needed to bring some clarity in that area. I would say that process is proceeding as planned. And as such, we expect to have the final resolution by the end of the year as communicated ever since we opened up about this joint venture with the LOI in December last year. Where we stand at this point in time is the -- well, first of all, there are many, how can I say, assessments ongoing in many different legislations, many different countries. In some, the process has been closed already. Just to give you an example, we got clearance, for example, for the U.S. market already. But then when coming to Europe, which is by a number of dimensions, the most relevant part here, Europe and the U.K., now the process is in the so-called Phase 2. We entered in Phase 2, I believe, at the end of April. That was, I would say, a customary step given the scale of this transaction.

What -- I believe what you referred to as a delay is, in the reality, I believe -- I'm assuming you're referring to some communications about the so-called stop-the-clock process that was triggered by, let's say, the involved authorities here in Europe. But again, that is nothing unusual. It is very normal that after there is a demand of information, the authorities may stop the clock for a number of days waiting for the information to be returned. So nothing is not to be regarded as a delay. It's just a step in the process and the overall time line we have always communicated holds up.

In the past weeks and months, merger control authorities had contacts with us. And also Sappi counterpart as it is customary in this process, they are contacting customers, competitors, suppliers. So there is a high -- what can I say, wide degree of information they are gathering. So this is why this -- it's not uncommon, pretty the opposite that this stop-the-clock approach is triggered. So very long answer, but no delay in the process.

That's very clear. Can I maybe just talk a bit about the pulp market. So I mean, European prices spread to China is still really quite elevated. It would be good to get your thoughts on how that develops and what you're assuming in the guidance range for pulp price evolution and mix. And of course, we're back to tariff headlines with the U.S., Canada again. Any implications for that on your pulp business would be great to understand.

Okay. Well, look, again, here, I'll pick the first part of the question, which is more around the market situation in general, and I'll let Tapio to comment with reference to the guidance. Yes, what we have observed in the past month is a softening of the demand when it comes to China and rather still strong demand both in Europe and in the U.S. And this different pace in demand has supported pricing positions at different levels. Having said that, pulp is a commodity. Pulp is a global market. And these price gaps tend to harmonize over time.

So in which direction this will go in the future, we don't want to speculate. But it's fair that we have observed, as you have pointed out, this spread between the regions. We just consider looking at the past that over time, prices will harmonize. But then when and what comes from this in the guidance, I'll leave it to Tapio.

Yes. And there, of course, as we have discussed earlier as well, we don't sort of disclose our estimates or forecasts on prices or other matters. The guidance, obviously, is based on our kind of view on the pulp market development, which we don't disclose as such. But the fact is that we do start the second half of this year at a higher level of pulp prices than what we started the first half of this year. So in that sense, that gives the sort of starting position. But then we have the sensitivity, how much, let's say, the pulp market or pulp price differences will impact the bottom line.

Okay. And Tapio, just maybe just any implications from the renewed U.S.-Canada tariffs on the pulp market?

Well, that, of course, is something that we do not know at the moment. Obviously, Canada is a competitor when it comes to -- or competing region when it comes to softwood pulp. But let's see. In the past, as you know, there have been then exceptions for pulp, like for Brazilian imports or imports of Brazilian eucalyptus pulp to the U.S., and so on and so forth. So what will happen with Canada, of course, we do not know at this point in time.

The next question comes from Gabriel Simoes from Goldman Sachs.

I'll keep them to the other divisions. So given the numbers reported for some of your peers in biofuels, we anticipated a better number here in the other divisions. So I would like first to thank you for the additional information on that division. But it would be helpful to understand the performance of biofuels, specifically during this quarter versus the first quarter and your expectations for this part of the business ahead.

And also, how much has the Leuna ramp-up cost hurt profitability on a sequential basis in the second quarter because you've given us the number for the first half, right? And if you could explain in a little more detail the reason why the expenses towards Leuna will increase ahead, that would be very helpful because as the ramp-up progresses, I expect that the EBITDA of the business to improve, right? But it doesn't seem like that's what you forecast, right? So that would be interesting to understand.

And finally, if you could add some color on how much the corporate costs are impacting that division during the quarter as well, that would be very helpful.

Okay. So let's start sequentially with the question about biofuels. As I indicated earlier on, the performance has been strong, supported by, let's say, from an operating standpoint, a full run of our assets in Lappeenranta, but then supported also by significant bio premiums for our biofuels. And I'd like to underline that element because we regard this as a kind of a structural or meaningful market improvement. The third element is an increase of the, let's say, price for the fossil fuel base. The overall price for biofuels is made of fossil fuel base plus a biofuel premium. So the base as well has increased, and that is linked with the conflict in the Middle East.

But then I come back to what I said before, the spread increased too because Europe, which is at this point in time, the main market for biofuels, is getting into adopting this RED III, Renewable Energy Directive III, which sets a number of, let's say, new elements, which are favorable for us are favorable for our biofuel business. So they set limits to utilization of certain feedstock in the biofuel production like palm oil or other things, sets requirement and mandates in terms of utilization of sustainable fuels in aviation and so on.

So we regard this part as structural and therefore, independent from what will be the evolution of the fossil fuel price component, which may go up or down with some dependence on the evolution of the situation in the Middle East. So hopefully, by providing these different elements, I can help you to have some elements to predict the evolution of the performance in this business over the next quarters.

Then the second question is about Leuna. I will kind of repeat what Tapio has indicated earlier on. In the presentation earlier on, we have indicated what have been the cost, what is the negative EBIT impact in the first part of this year. In the second part of the year, it will be some way higher. And that is because, yes, there are sales of products but the additional costs that are coming for the, let's say, ramp-up of the operation and the depreciation are such that the contribution from any sales is not moving the needle substantially.

So for the second part of the year, if you have to build some assumption, you can take the first -- the H1 as a base and then add some extra cost. Then there was a third question about corporate costs. I don't know, Tapio, if you have elements to give on that.

Well, maybe just a kind of background to that, that, of course, when looking at or when we open up here the first half impact of biochemicals and biofuels on the other operations, then that obviously explains the more significant part of what is included or what is changing, obviously, there for the positive and the negative, as this Slide 3 very well shows.

The remainder includes the sort of group administrative costs as in any stock exchange listed company, but also our technology R&D activities that are at the group level. So that would be, in a sense, the main points of the remaining part, but we don't disclose any detail in terms of numbers on that.

The next question comes from Cole Hathorn from Jefferies.

Just some short ones on my side. I just want to confirm the headwinds in the second half from the maintenance. Could you just quantify the maintenance that you had in the first half versus the second half, just so we can get a quantum? And then similarly, I just missed the comment that you made on the forest fair value. Is there any guidance that you're giving for the second half number, just so we've got an estimate there? And beyond the technicals -- sorry, go ahead.

Yes. If I'll just sort of check those couple of points off first and then please continue. But on the maintenance, as I said, it's EUR 40 million kind of a difference in very round figures. So we had EUR 55 million equally round figures without going into the sort of single millions in the first half of the year coming in the second quarter actually. And then, let's say, around EUR 90 million during the second -- plus or minus during the second half. So that's where the sort of EUR 40 million, again, without going into single millions level of difference comes from.

Then on the forest fair value, we don't have guidance as such. So what I wanted to sort of indicate or try to sort of give some color on that is that last year, we had the EUR 130 million. We don't have the exact number or estimate yet. We will see where the interest rates and so on lie at the end of the year. But as we know, interest rates have been on the rise, the sort of wood price trajectory from what happened through last year to what is happening this year is rather not for increase of the value. So therefore, then kind of the delta between EUR 130 million and what will end up being here in this year can be, let's say, up to around EUR 100 million.

I would like also to take the opportunity of the question about the maintenance to, let's say, to underline one element. During the second part of this year, there are two units undergoing maintenance, which happened to be two of the big recent investments from UPM, meaning the Paso de los Toros mill and the Olkiluoto 3 reactors. Now they are getting into an 18 months maintenance schedule now. So this would mean that the next maintenance stop for both these units will happen in 2028. So just -- we're not here at the point of guiding or commenting about 2027, but I think it's potentially an interesting element for you to be aware of. As in the past, for both units, we had maintenance after 1 year because they were during some way the, let's say, the warranty period. Now it's going to be [ 18 years ], and they will be running uninterrupted, all the way through 2027.

That's helpful. And then maybe just following up on the Adhesive Materials or the old Raflatac business. It was a very strong performance, with volumes coming back in the second quarter. And volumes, I suppose, have been more -- not more cyclical, but they've been more volatile as there's been restocking and destocking. How should we think about the Adhesive Materials division for the rest of the year? Do you think that there was a bit of kind of restock and supply chain expansion in Q2, so we shouldn't get too carried away for the back half? Just like your -- some commentary there.

I would say that there are always multiple components into our performance. But if we isolate the two, yes, there is potentially some, let's say, pre-buying during quarter 2 or during the Middle East crisis or during the first part of it, I would even say, to be a bit more precise. We have seen some of it in Asia and some of it in Europe. We have not seen anything of that in the U.S. or in the Americas, which, on the contrary, has been rather soft. So these all elements have got to be balanced altogether.

But then there is a lot of, I would call it, self-help in the current performance of Adhesive Material, and that is something that will surely roll over the next quarters, whatever the market dynamics will be because you may recall, there has been significant restructuring in the business with asset closure production moved to different sites. There has been investments in new terminals in Delhi, in Vietnam, in Taiwan, in Asia. There's been investment in new coating capacity or capabilities in U.S. and so on.

So we are at the point where we see the payback of all these internal activities adding up to a market dynamic. So the market evolution, we'll see it over the future, but the internal factors are all there and there to stay.

With this, we have also utilized the time we had available and even a bit more. I want to take the occasion to thank you all for the participation and for your questions, and I look forward to meeting you or e-meeting you again at our next quarterly call in October. Thank you. Have a nice day.

Hello, everyone. Welcome to UPM Quarter 1 2026 Results Webcast. I'm Massimo Reynaudo, I'm the CEO of UPM. Here with me is Tapio Korpeinen, the CFO.

Well, we had a good start of the year. Despite the fact that geopolitics continued to introduce new uncertainties, we delivered the solid results during the quarter. The quarter 1 comparable EBIT was EUR 274 million with an EBIT margin of 10.8% in line with last year.

Our decarbonization solutions achieved an excellent performance. And our Advanced Materials businesses continue to show steady and resilient performance. Fibres improved its performance compared to the previous quarter. Our diversified business portfolio and the global spread of our activities, served us well in this volatile environment.

As an example of the strength of our business model and strategy, the recent Middle East crisis brought challenges and opportunities in equal number.

Looking ahead, our work continues with a disciplined focus on improving competitiveness and performance while executing transformative portfolio projects. Today, we announced a demerger plan concerning the separation of UPM Plywood into a new independent listed company.

Besides that, the preparation for the planned graphic paper Joint Venture with Sappi continued and continues, and we expect the definitive agreement to be signed during the first half of this year and to conclude the process by the end of the year, subject to merger control approvals.

I will share some more about these 2 initiatives shortly. But first, let me walk you through the main facts and achievements of the quarter business by business. We start today with decarbonization solutions. And in there, the UPM Energy business achieved its best quarter 1 results ever with a comparable EBIT of EUR 100 million. Differently from what one may think, this performance is not depending by the general global or European energy crisis, but is influenced by Finnish specific factors.

Some are of seasonal nature and other are structural. When it comes to the seasonal component in quarter 1, the electricity consumption in Finland reached an all-time record, supported by a cold winter. This resulted in high energy prices during the quarter. The winter being over now, prices have moderated from the peaks.

This effect is seasonal in the sense that is influenced by meteorological patterns of the different seasons, but it lays over a structural change in the market. And if we talk about the structural component, there is a general year-on-year increase of the energy consumption due to the electrification of the economy and to the installation in Finland of data centers, which is now happening at scale and green industries, which are more of a future prospects. Because of this, electricity consumption in Finland is expected to grow significantly over the next years at a pace in between 4% and 7% year-on-year, which means that in 2030, the energy consumption will be somewhere between 20% up to 45% higher than it is now.

In a market where demand will grow faster than new production can be added, we are in a unique position to generate value. This transition requires, in fact, 3 things to happen at pace. Locations where to install data centers or these projects, grid connections to fit them with energy; and finally, baseload CO2-free energy.

When it comes to locations and grid connections, we have prepared a portfolio of suitable industrial sites with existing or close by connections. This is important as site readiness, [ speeds up ] permitting and construction. As for energy, we can offer 12 terawatt hours of clean baseload power through PPAs.

If market conditions will make it relevant, we will also be able to add additional renewable power. We have been developing a pipeline of potential wind and solar power for an extra generation up to 1 gigawatt, ready to be built earliest in 2027, as said, if the market condition will make it a good investment. The energy business has been run in an excellent way during many years under Tapio's leadership.

Given the number of opportunities developing in this area, we will establish a new Executive Vice President position fully dedicated to developing this business further and to take the lead of this business over from Tapio in due time.

Now looking at next-generation renewables, biofuels continued to improve performance and posted strong quarter 1 results. You may remember, we turned this business around back to profitability last year. It is now back to good profitability, thanks to our work to improve the cost base, supported by a good demand for renewable fuels and prices boosted by the increasing fossil fuel price recently.

Talking next about biochemicals and Leuna specifically, the ramp-up activities are proceeding as planned and the production of industrial sugars and lignin is ongoing. The production of renewable functional fillers will start soon to move next to the production of glycols.

At that point, we will have reached the stage of integrated production. The demand of our biochemical products is robust and the sales pipeline is solid, too. I also anticipate that in October, we will have the official inauguration of the site and trust we will be organizing for site visit later on if you'll be interested.

Now on advanced materials businesses, we continue to deliver resilient performance. Deliveries both of Adhesive Materials and Specialty Materials increased from the previous quarter. Markets in Europe and Asia were solid, whereas the U.S. market was softer. As an example, the label materials demand grew 2% year-on-year in Europe, but decreased 2% year-on-year in North America.

Adhesive Materials in this environment continue to take actions to sharpen competitiveness while creating new growth avenues. It is investing to expand coating capabilities in the U.S. to expand in high-margin segments there, while investing in higher growth regions in Asia. The latest expansion that was announced was a new terminal in Delhi. This will be the second terminal in the country besides the already operational one in Mumbai.

Specialty Materials growth plans are some ways similar as they aim to grow in high-margin markets with new high-margin products. About this specifically, the business continued to accelerate its barrier paper product development pipeline. And this is for the replacement of plastic or multilayered products in consumers' applications like food or pharma.

Just to give you an idea of the level of activity in this space, the business initiated more than 70 new pilot projects with customers in 2026 alone. A relevant feature of the Specialty Material business is that we have enough capacity available to support a sizable growth in this segment with no need of large-scale investments.

On Fibres now. And on the global pulp markets, in quarter 1, the demand for hardwood pulp was generally robust, while the demand for softwood pulp was softer. The Fibres business improved its underlying performance from the previous quarter in both platforms, North and South, supported by an increase of deliveries and a slight increase of the average prices compared to quarter 4.

Fibres South reported a comparable EBIT of EUR 85 million or 21% of sales in the quarter. As discussed earlier, we expect further cost reductions over this and next year. Moving to Fibres North in Finland, pulpwood market prices stabilized in quarter 1. They were about a 30% lower than last year. In quarter 1, we also started to realize a decline in wood cost. Fibres North comparable EBIT came in at EUR 34 million or 7% of sales.

To our Communication Paper business now. The graphic paper demand in Europe decreased by 4% year-on-year. And in North America, it decreased even further. In the context of challenging paper markets and high energy prices, our Communication Paper business delivered solid results. Our paper deliveries increased from the previous quarter and fixed costs decreased following the closures in 2025. Energy costs increased, but the business succeeded well in optimizing its energy consumption in these volatile energy markets.

When it comes to our Plywood business, markets were stable in quarter 1. Demand has been strong in liquid natural gas shipping segment. It has been good in industrial end-use applications and soft in construction-related end-use segments. In this situation, the Plywood business continued to perform well, and the result improved from last year.

Talking more specifically about this business, we have announced today a demerger plan to separate UPM Plywood into a new independent listed company, as I said before. The new company will be named WISA Group, leveraging its trusted and well-known product brand. The plan is to list the new company on NASDAQ Helsinki. We believe this operation will create a long-term value for the UPM shareholders.

Our UPM Plywood is a strong business with a proven ability to perform in different market conditions. It supplies high value-added end-use segments, has efficient production platform, well-established commercial model and a strong customer partnership.

Separating the Plywood business will reinforce its future prospect. As an independent company, WISA Group will be able to pursue own strategic priorities and growth opportunities with increased focus and required agility.

At the same time, this simplifies and focuses the UPM business portfolio, too. The demerger plan is subject to a shareholder approval in an extraordinary general meeting that will be held by early September at the latest.

The planned completion date is 31st of October 2026 and the first day of trading for WISA Group will be November 2. Now I talked briefly about Communication Paper and their performance. But let's talk now about the future of this business. And the preparations continue at full speed for the planned graphic paper joint venture.

As a reminder, we're planning an independent graphic paper company, owned in equal parts by UPM and Sappi. Which would include all of UPM Communication Paper and Sappi's graphic paper business in Europe. The transaction would create a more efficient, adaptable and sustainable graphic paper business. It will create also a structurally competitive cost base and supply security for the European and global customers.

For UPM, the transaction would have a positive impact on profit margins and balance sheet. Yesterday, the European Commission announced the opening of a Phase 2 investigation. This is not unexpected to the point that we have indicated earlier on and back in December that we were assuming closure of this deal by the end of this year, pending the necessary approvals.

The Phase 2 investigation means that the commission requires more time to investigate the joint venture. We have openly engaged with the commission these last month, and we will continue to work with them during the rest of the process.

As said, the definitive agreement are expected to be signed during the first part of this year and the closing of the deal is expected to take place by the end of the year. Now with these 2 portfolio initiatives about Plywood and Communication Paper, we aim to change the profile of the company, increasing its growth potential and margins.

The largest potential of the new UPM is in decarbonization solutions. Here, we have some unique positions. In energy, we have what data centers and large industrial green investments are looking for, sites, grid connections, baseload CO2-free energy.

In next-generation renewables with biofuels and biochemicals, we have built positions with unique combinations of feedstocks and innovative IPR supported technologies to serve markets where both regulations and consumer demand will or are already boosting demand.

The recent disruptions in Middle East have also demonstrated the importance of these products, not only for environmental reasons and to reduce emissions, but also for the possibility to reduce the dependency from oil-based equivalents. In Advanced Materials, we have a strong global position or strong global positions on markets that normally grow faster ahead of GDP and low cyclicality and volatility.

Here, we seek predictable, profitable, capital-efficient growth. I said earlier on, in high-margin products or high-growth regions. Both development and innovation here play an important role. We want to develop distinctive solution for end-use segments that want to move beyond plastic.

Finally, in renewable fibres, we have one of the most efficient cash engines in the industry. Fibres South is the world-class low-cost platform with further cost optimization and CapEx-efficient debottlenecking ahead.

In Fibres North, we continue to work on cost and fibres differentiation to accelerate performance and cash generation. So the new UPM will have an attractive portfolio focused on these 3 segments: Decarbonization Solutions, Advanced Materials and Renewable Fibres. All these businesses operate in growing markets and will accelerate the growth by amplifying our global reach. As it is visible on the chart on the right, growth on this perimeter is not just a future ambition. These businesses have shown a strong track record of realized growth above GDP during the last years already. We will just accelerate it with a sharper focus and targeted investments.

Given the scale of the changes ongoing and the number of initiatives we are working on, you may have seen we have created a new position of EVP transformation that will help us in the transition from the current to the new setup seamlessly and effectively. But I'll hand it over now to Tapio for more comments on the results.

Thank you, Massimo. So here, we have, again, the key figures. First quarter sales was EUR 2.505 billion, down by 5% last year. Comparable EBIT, EUR 274 million, also down by 5% year-on-year. But in terms of EBIT margin, steady compared to the first quarter last year. This is a good result given that in the first quarter, we were in a world before the globally applied U.S. tariffs and also before significant changes in currency rates, particularly U.S. dollar.

Operating cash flow for the quarter was EUR 89 million. I would make a couple of notes on cash flow. First, looking back at the end of last year in the fourth quarter, operating cash flow was EUR 720 million, including EUR 416 million working capital release. As I stated then, partly this was seasonal, but to large part due to actions that we have taken to improve our working capital efficiency.

Now working capital increased by EUR 192 million in the first quarter compared to EUR 112 million increase in the first quarter last year. Included in the working capital in this quarter, the initial margin requirements of the energy hedges tied up about EUR 60 million more than in the first quarter last year.

This is related to higher share of futures contracts that we have made in hedging, including also price movement affecting that in the market. So the rest of the working capital tied up is seasonal in nature and in line what is typical looking at the past years in the first quarter.

This means that the structural improvements in the working capital efficiency that we took in the last year have stayed in place. Further, the first quarter cash flow was temporarily affected by timing of cash flow impact of earlier one-off type items such as restructuring charges where we have made provisions and now we see the cash flow impact in the cash flow statement.

But still looking at the full year 2025, we successfully reduced working capital by EUR 391 million. And looking forward to this year, we continue to work on further reducing working capital during 2026 beyond these seasonal fluctuations.

And as a final note, as we have guided, investments were low and hence, free cash flow was positive even in a quarter with temporarily low operating cash flow. Then here on the left-hand side, you see the first quarter EBIT comparison to the first quarter last year. Sales prices decreased compared with last year, particularly in Fibres and Communication Papers.

On group level, this was offset by lower variable and fixed costs. Changes in currencies had a negative impact. The end result was a 5% decrease in EBIT with unchanged EBIT margin, as mentioned. On the right-hand side, you can see the development compared with the fourth quarter last year. Here, sales prices increased, particularly for energy and also biofuels. This was more than offset by higher variable costs.

However, the change in variable costs shown here include the energy refunds booked in the fourth quarter. So that explains a meaningful part of that negative comparison to the fourth quarter. So part of the price benefit here was seasonally driven by the cold winter, but all of the variable cost increase is also seasonable due to this effect of the energy refunds.

Volumes increased slightly. Fixed cost decreased more meaningfully by EUR 63 million. And part of this, again, is related to the maintenance in first quarter. Part of it is seasonal and part of it is structural related to restructuring.

The big negative bar other is mostly related to the fair value increases of forest assets, which again were booked in the comparison quarter 4. So then to the guidance and outlook, which are unchanged. Of course, the new conflict in the Middle East has increased uncertainty in the business environment. But given our portfolio, this presents risks, but also presents some opportunities for our businesses.

Due to the situation, we are heading towards a period of higher inflation, and therefore, margin protection will be a priority for us. But again, particularly when it comes to impacts on energy costs, our geographic position gives us some resilience here in terms of energy costs and prices in Finland, where we have seen a moderation after the cold winter months. So again, less connected to the impact of the Middle East situation on energy inputs.

In the second quarter, the Pietarsaari pulp mill and Olkiluoto 1 and 2 nuclear power plants will have their maintenance shutdowns. And the total impact of the maintenance during the second quarter will be a EUR 55 million to EUR 60 million increase in euros compared to the first quarter.

Our net debt came down slightly during the first quarter to EUR 2.962 billion. Net debt-to-EBITDA ratio remained at around 2.3x, and we will continue to work on reducing our leverage to within our policy of 2x net debt-to-EBITDA.

I already mentioned the investments, which are at a low level, boosting free cash flow. The major investment cycle is over. We see the guidance for investments, including maintenance investments during this year. So also looking forward, we can grow in the near term with a relatively low level of CapEx.

So I'll hand over here for -- to Massimo for some summary notes.

Yes. Thank you, Tapio. And very, very quickly, I just want to recall some key points. Quarter 1 was a good start of the year. Our diversified portfolio and global reach have ensured performance in a volatile situation. We stay focused on performance, cash generation and margin protection in an environment that has turned inflationary.

Meanwhile, we continue to press ahead with transformative initiatives. Today, we announced the demerger plan for Plywood. We are moving into the Phase 2 investigation for the graphic paper joint venture. Which is a step ahead that we were expecting.

So these 2 initiatives when completed successfully, will change the profile of the company, increasing its growth potential and margin. And this is the road map we keep on following and executing with discipline. With this, I conclude this part, and let's open up for questions.

[Operator Instructions] The next question comes from Johannes Grunselius from [ SB1 Meter ].

It's Johannes here from Stockholm. I have a question on UPM Uruguay. I appreciate very much that you now disclose numbers on Fibres North and Fibres South. So we can see that the costs were roughly EUR 331 per tonne in Uruguay in Q1. Can you elaborate on the magnitude that you foresee of further cost reduction per tonne in Uruguay? You alluded to that in the call there, Massimo.

Yes, it's correct. We have indicated 2x '25. But just to be clear, we said in last year that we have achieved a USD 25 per tonne cost reduction that was in 2025. And we have indicated the confidence of achieving another reduction in the same similar scale, so USD 25 per tonne across this year and next year. So this is, let's say, through optimizations, all the rest staying equal.

Okay. That's very helpful. And also, I have also a question on Leuna. If you can give us some idea about the earnings impact or earnings delta. I mean, could you indicate now in the end of the ramp-up phase, what type of temporary cost you are running with and how quickly you will see the earnings impact from turning basically commercially?

Well, I have -- we have sort of indicated earlier on a kind of a 6-month basis where we are in biofuels and biochemicals that are included in the others segment. So we'll give that, I would say, in July when we next come out with the second quarter result. Of course, you can see in the others segment indication that the biofuels business, as I said, has improved, I would say, quite well.

And we do have some additional costs now in Leuna as the ramp-up is proceeding and depreciations come in, but we'll give more disclosure than in July on that.

The next question comes from Gabriel Simoes from Goldman Sachs.

So my first one would be on the pulp side of things. So if you could help us quantify the impact on profitability in the first quarter, especially for the Fibres North division, that would be great. So how much of the expected profitability increase from the lower pulpwood prices in the Nordic region has already been captured in the first quarter? And what are the expectations for the coming quarters?

And then my second question is on the energy front. So you have been thinking a lot about the potential growth in power consumption from the data center investments that are expected for Finland. And I just wanted to understand exactly how you plan to capture the benefits of that move, right?

So will you invest more and capture more of that through volumes? Or do you expect that to translate into higher prices until more capacity comes online?

And then kind of a follow-up to that is do you expect the supply/demand for energy to be balanced? And is it not possible that new investments by other players come online in the coming years as well to also try and capture such a large increase in energy demand that we expect?

Okay. Look, I'll start answering the question about energy, giving some comments, but then we have the energy expert here being Tapio. I will let him to complement on that. So yes, as commented earlier on, there is an expectation of significant growth year-on-year.

I've indicated or I mentioned a range before between 20% to 45% increase potentially in the next 5 years. The range is big. But even if you take the bottom of the range, that growth is massive, if you consider that over the last decade, there's been no growth or potentially even some decline.

So this is -- and this growth is mostly driven by this investment in data center. So now this -- the consumption will come in rather fast and in steps. And the probability that supply will catch up at the same time or at the same pace is low. It doesn't mean that the new capacity can be activated.

I've just commented that we have been working and prepare some readiness to expand our capacity if the condition will require. But at this specific point in time, the low energy prices and the volatility of them are not and have not been encouraged any large-scale investment. So there is not much really in the pipeline. So based on these considerations, there is the belief that the supply-demand balance will evolve in a direction that prices will grow compared to the current base.

And this is an element of value increase or capture that we see through price.

Then another element is around, let's say, potential supply -- power purchase agreement and supply agreement, energy supply agreement with these investments coming in. And this is a new developing opportunity in the market. So we don't want to speculate right now too much about that, but there's surely a significant level of activity around that.

And then depending on the type of profile duration and so on, that is another element that can lead to additional value creation. But as I said, I'll let Tapio to complement on this and maybe also to comment on the first question about pulpwood cost.

Yes. Maybe the thing that I would add to Massimo's comments on energy is that the supply-demand imbalance is a reality today already from time to time, and that's what you, in a sense, saw in the beginning of this year in January, February because, as you know, we have an energy system now here in the Nordic countries, which is quite weather dependent. And in the meantime, as mentioned earlier by Massimo, we see a structural change on the power consumption side. So power consumption has been on the increase.

And when the reality is that during not only the short term, but actually in the kind of scope of several years, there is no new capacity of scale coming to the market. There's only weather-dependent energy generation that is possible to add to the market, then these periods of imbalance, which we saw now in the beginning of the year they will be with us. So welcome to the new energy market.

And it's not only that you wait for another cold winter, they can happen equally well in summertime because this situation where a high-pressure front sits on top of the Nordic area have become and will become more frequent because of the climate change that is happening. So because of that, we believe that the value of capacity over energy will increase and also the value for the new power consumers, whether it's data centers or in the future green industries in being able to secure the capacity and the supply will increase and will be an important sort of factor for their ability to invest in this area. And we have an offering for that.

But then maybe your question on impact on Fibres North of the pulpwood prices, you remember, from the peak of last summer, pulpwood price in Finland has come down by 30% or a bit more. That is partly the reason why we do have an improvement in Fibres North included in the numbers now result reported for the first quarter.

But since that sort of change has happened during the 6 months of last year and also because there is a delay on top of that, how quickly that change sort of close to the bottom line, then it was still only a part of that total change in market price for pulpwood.

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

Your comments seem to, I mean, really focus on this data center demand growth tailwind. But I'm just conscious that you're saying that the supply side, there's not really much in the pipeline. The market seems like it could tighten. When you're thinking about your forward planning and these projections, you're not concerned about the impact that energy price inflation might have, especially politically and regulatory and that, that could maybe actually be a roadblock to getting some of these data center approvals?

That is definitely a factor. But look, if we talk data centers, for example, there is a rather large pipeline of projects. Some are still in some investigation phase, but some are in a construction phase or have been decided as investment. So they will be coming on stream in any circumstance, I would say. So we see debates happening in other parts. But so far, this has not been a limited factor for investments here.

Maybe if I'll add, let's say, time will tell what the political discussion will be, but the Nordic situation and Finnish situation is a bit different than what you see elsewhere in the world because now we have a market that is already saturated by wind and solar. So there is no room to add because the solar and wind in this kind of current situation cannibalizes its own profitability unless you have a PPA in place.

So now you need to have demand coming to the market so that further investments in the increased energy production through wind and solar because no other way in scale is available in the shorter term. So you need to have demand coming to the market. So in that sense, to be able to continue on this road that we have chosen here in the Nordics and Finland, in particular, to create a power system that is emission-free, you need to also have some new consumption coming in, and that's how to sort of take the whole system forward.

And I would expect that the decision-makers also on the political side will understand that. We have publicized quite a big pipeline of possible investments in green energy. I mean, we in Finland, at UPM, which is kind of standing still because the demand needs to come.

Understood. So if I understand correctly, you're saying that some of these data center projects could use currently spilled or curtailed renewable generation and maybe turn that into a baseload stream maybe through some storage investments. Is that the right way to think about it?

Well, let's say, then storage investments is another possibility, but it can be a kind of feature of the solution, but with today's technology still is, let's say, not enough in capacity to be the solution. So what I'm saying in a sense that, again, if the demand comes and in that way, we can take the energy system forward, then, of course, storage can be part of it.

But data centers also come with investments on storage and power generation for the sort of peak load and so on. So it needs to be a combination.

Understood. That's very helpful context. And if I can maybe just squeeze in one more. Can I just get a sense of your softwood sales mix between Europe and export markets over the last quarter? And I guess, how you're seeing the European softwood market balance given that inventories are a bit elevated?

Well, it's a very specific question. I wouldn't be able to argument about it at this point in time to be frank, or beyond what we said before that when it comes to demand and what we have observed is demand being relatively robust for hardwood and being definitely robust in Europe because you are talking Europe.

And being softer -- well, it looks like a plain with word, but it was softer with softwood a bit across the world. But I would not be able on the spot to argument to the level of detail you have asked.

The next question comes from Ioannis Masvoulas from Morgan Stanley.

Three questions from my side. I'll take them one at a time. Going back to the guidance, you had a strong Q1 EBIT, but you have maintained your H1 EBITDA guidance, suggesting Q2 that is far weaker, at least at the lower half of the guidance range.

What would bring us down to these levels, especially as the first month is already behind us? And is the lack of change in guidance just your embedded conservatism and we should expect to be at the upper end? I'll stop here for the first one.

Yes. Maybe a quick comment on that. Well, let's say, again, the upper end is EUR 525 million. So let's say, there is there is room for improvement there compared to last year, for instance. If you remember that the first half of last year was EUR 413 million. But then, of course, now thinking about the second quarter, what was mentioned in the comments here earlier already that we do have maintenance taking place, both in the energy business and in the Pietarsaari mill in the pulp business of part of Fibres here in Finland, EUR 55 million to EUR 60 million impact compared to Q1.

And also, as mentioned, we have seen already in the month of March, this kind of spring seasonality in a sense coming in the energy business. So in that sense, compared to the first quarter, we typically see lower prices on the average and impact of that in the second quarter as well.

That's very clear. Second question, turning to fibres. We've seen a strong run in hardwood pulp prices so far this year. And now we're hearing about the buyers' resistance in China, just as logistics costs are proving a headwind over the past month or 2. My question here is that what's your sense on the increase in freight that we've seen at this point versus the beginning of the year from Uruguay to Asia? And do you anticipate that at least for hardwood, market fundamentals are strong enough to support a pass-through by higher pricing over the next couple of months?

Okay. Look, it's a question with 2 parts. One is about logistic cost and the other is about the market situation, whether it's -- or it will be robust enough to support further price increases. That is an open question. And I would say we don't know more than anybody else, and we don't want to speculate.

Surely, I would say what will happen in the Middle East will directly or indirectly wait on consumers' mood and ultimately influence demand because at the end of the day, that's what drives consumption. Until now, as I said earlier on, we have seen a rather robust demand, and that has supported price increases that we have seen.

This is the second part of your question. When it comes to the specific impact of the logistic cost from Uruguay, I wouldn't be able to tell about that what is the scale of it specifically. But this is what gives me the possibility to broaden up a little bit to what I said before that the Middle East crisis is opening up both challenges and opportunities in the same scale.

And this logistic cost may be a challenge of some scale or some magnitude for some businesses. But actually, they may also turn into a tailwind for other businesses because what we have seen is that on the back of increased logistic cost from Asia to other parts of the world and, for example, to Europe or disruption in terms of container availability and so on, we have seen in certain markets that the flow of goods has at least diminished.

And we have seen also in certain market segments that European customers, for example, have shifted from, let's say, price opportunities on import from Asia to supply security from local sourcing. So quantifying every and the effect of all these elements is a difficult exercise, but there is surely a balancing or more than a balancing effect across our portfolio. Equally, another dimension of where the Middle East crisis has turned into a tailwind for some of our businesses.

Well, we have talked earlier on about biofuels. The biofuel prices are built by having a premium over fossil prices. And when fossil-based let's say, product prices go up, the biofuel prices go up accordingly. But the same logic apply or will apply to our biochemical products because the prices of the fossil equivalents of what we will, let's say, replace have gone up significantly.

So it's much broader answer than the question you have asked, but hopefully, it helps you to get a bit of a color around what we said before around the resilience of our portfolio.

It does. And just the last question around the graphic paper JV. It sounds from your comments that the Phase 2 investigation did not really come as a surprise to you. With that in mind, is it fair to assume that the targeted synergies of EUR 100 million are still pretty much intact even if you have to offer up some remedies to get the deal over the line?

I would say that you are right to say that our, let's say, confidence in the positive conclusion of this process remains intact. You are right in saying that we were expecting the move into Phase 2 because it is rather a normal step -- we're talking about a really large-scale project and with scale got complexity.

You have to think that we have filed the case the 19th of March and the probability for all the implications of this case to be clarified between 19th of March, 28th of April was not just realistic. So by this standpoint, we were expecting this. It's kind of normal in this type of situations. We have been working very openly with merger control authorities until now, and we'll continue to do so in the months to come. Then when it comes to the synergies, I mean, nothing has changed on that side compared to our original assumptions and also the number has not changed nor we want to go at this point in time to get to speculate about remedies.

The next question comes from Linus Larsson from SEB.

A couple of questions on biochemicals and biofuels, if I may, starting with biochemicals. Just to get a feel for the earnings trajectory you've previously flagged for increased costs in the initial ramp-up at Leuna. Are costs going to increase further in the second compared to the first quarter?

Are you taking on additional depreciation? It looks that way to me in the second compared to the first quarter? And are you also seeing an increased burden on the EBITDA level in biochemicals still?

Maybe if I comment on that, won't go into EBIT and EBITDA or any other detailed lines as such. But overall, like we have said, this kind of costs, of course, as the ramp-up proceeds, they are on the increase until then we start to get in a sense, the impact of more significant revenue in. So to your question, for the EBIT impact likely to still be sort of heavier in the second quarter to comparison to the first quarter.

Sorry, I didn't -- I have a pretty bad line. So you're expecting a weaker EBIT in the second compared to the first quarter on the biochemicals. Is that right?

Yes, that will be, let's say, like I said, heavier load on the EBIT of this other segment compared to the first quarter.

Perfect. And then equally on biofuels, you've previously been talking about easing input costs and now we have this much improved market situation. When you guide for the second quarter, what assumptions are you building in, in terms of biofuels developments?

Have you seen a stabilization of costs? Or is that trending in any direction? And is it fair to assume that the strong markets that we have seen recently were only taking effect rather late in the first quarter?

Well, let's separate the 2 things. I mean, when cost and prices, well, again, we don't go too much into speculating about the future, but the situation in the Middle East is still locked and until it will stay locked, the situation will stay as it is in terms of supply balance situation and that supply balance situation will not ease the day after the situation is unlocked. I believe we all have access to the same public information around the fact that the supply situation will not normalize for months.

So beyond that, we don't go speculating about prices, but it's difficult to imagine a normalization of the situation quickly. When it comes to cost here, I just would like to use the opportunity to say that when it comes to the biofuels we do produce, we are -- I don't mean we are unique, but surely, we are unique in our scale for the type of feedstock we utilize, which is crude tall oil.

We are not utilizing other feedstock like used cooking oil or animal fat or other type of feedstock, which are utilized by more producers and therefore, in a situation of a surge of demand can end up under more stress.

The reason why we have this different feedstock, it's also because we have some specific technology and IPR on it that allows us to be competitive with this feedstock to levels that others that may be willing or could be considering to use the feedstock don't have it. So well, what will happen to cost in the future, we'll see it next, but our specific situation shelters us a little bit to pressure on feedstock cost that may happen in other segment of the markets with utilizing a different feedstock, more in demand.

Sure. I appreciate that. And then just one detailed question on your maintenance cost guidance for the second quarter. You say EUR 55 million to EUR 60 million. How much of that is in the Fibres division, please?

No split on that, but let's say, of course, bigger part is in the Fibres division.

Thank you. We have also used the time available for this call. Thank you all for the participation and for the questions. And I look forward to meet you again in one quarter. Have a nice day. Bye.

Hello, everyone. Welcome to UPM's Quarter 4 Results Webcast. I am Massimo Reynaudo, I'm the CEO of UPM. Here with me is Tapio Korpeinen, the CFO of UPM. The year 2025 has been characterized by escalating geopolitical and trade tensions with multiple impacts and also on our business environment. During the year and in response to the situation, we intensified our actions to both sharpen our competitiveness and to execute our portfolio strategy. This resulted in the fourth quarter in a visible improvement of our performance in most of our businesses.

Compared to the previous quarter, our cash flow resulted very strong, too. Our quarter 4 EBIT was EUR 355 million compared to EUR 418 million 1 year ago or 1 year earlier. The quarter 4 EBIT margin was nearly unchanged at 15.3% versus 15.9% in the previous year. The operating cash flow in quarter 4, as I said, was strong at EUR 720 million. And our net debt decreased while we also paid out the second installment of the dividends. During 2025, we launched a significant strategic initiatives that continue to transform the company. In February, we acquired Metamark to accelerate the growth in Adhesive Materials. In May, we sharpened the focus in our Biofuel business and discontinued the Rotterdam biorefinery development.

When it comes to biofuels, during the year, we made good progress with our turnaround plan and the business go back to profitability in the second part of the year. In September, we started the strategic review of our Plywood business. And in December, we announced the plan to establish a graphic paper joint venture that would encompass the UPM Communication Paper business and Sappi graphic and paper operations in Europe. While doing all of this, we took decisive actions to improve performance and competitiveness across all our businesses.

Just as an example, in the fiber business, we mitigated the pulp and wood market challenges in Finland with production curtailments in the fall. And we entered into a long-term strategic partnership with Versowood that strengthened our position in the wood market. I'll tell you some more about this later. In the Adhesive Materials business, we restructured our production footprint globally and we reduced capacity in Europe and in the Communication Papers business. Measures were taken also in all other businesses and functions. Finally, we intensified our actions to improve the working capital efficiency, which resulted in the cash flow I talked about earlier.

I will go now into some more detail for each of the business segments. Let's start with the Decarbonization Solutions. Here, the various end markets developed positively during the 2025. In Energy, the electricity demand in Finland grew by 3% during the year -- during the 2025. The growth was driven particularly by the electrification of [ heating ]. But in the coming years, this growth is expected to be complemented by growth in data centers currently under construction and by the green transition. Over the 5 coming years, we see the annual market growth rate to accelerate in a range between 4% and 7% in line with several other predictions on the same matter.

We are in a strong position to capture the value this situation creates. In fact, there is a strong demand for 3 things. Sites with easy access to high voltage grid connections were to establish new operations. There is a demand for CO2-free energy -- electricity and there is demand for baseload power, and we have the 3 of them. In the meantime, we are well set to maximize the value creation in the current volatile and weather-dependent market. For example, in 2025, we achieved EUR 10 per megawatt hour higher sales prices compared to the average market prices. In quarter 4, the Energy business achieved a comparable EBIT of EUR 54 million, marking the best quarter in 2025.

But if we move to biofuels, there as well, market prices for advanced renewable fuels increased during the second part of 2025. Our business improved its performance each quarter throughout the year and is back in profit. Going forward, the implementation of the RED III regulation, renewable energy directive regulation will support a positive market outlook.

In Biochemicals, the business has now initiated the commercial phase with the first customer deliveries of industrial sugars taking place in quarter 4. We will continue to introduce further products to the market during the first half of this year, the next step being the renewable functional fillers. We reconfirm that the demand and interest for our biochemical products is robust.

You may also have seen from the release this morning that we plan to start reporting UPM next-generation renewables, which consists of Biofuels and Biochemicals as a separate reporting segment starting from January 2027. With this, there will be the opportunity to have enhanced visibility into the performance as well as the potential of this high-growth segment.

We turn the page and look now into the Advanced Materials. Well, here, the label materials market development in 2025 was relatively stable with growth rates remaining modest. To put it in numbers, in Europe, the demand grew by 2% compared to 2024. In North America, the growth was on a similar, which means about 2% level in the first 3 quarters of the year, but it slowed down and ended up with a minus 1% in quarter 4. In this context, 2025 has been quite a transformational year for our Adhesive Materials business. Here, we took significant actions to sharpen competitiveness and to secure the future growth.

The business streamlined its organization and closed 3 production lines in Germany, France and in the U.S., relocating production to lower cost sites in Europe and in the U.S. This will improve its fixed and variable costs and competitiveness in general going forward. In parallel, it started focused growth investments in the U.S., in Malaysia, in Vietnam and in India to accelerate the growth in high potential or high-margin areas. Finally, it acquired Metamark in the U.K. and then work to integrate it with the previously acquired sites in the graphics space to build a platform for the development of this higher-margin segment.

As a result of all of this, the business was able to grow clearly faster than the market, and it is in a good position entering 2026. However, the slow growth environment due to that, we were not able to simultaneously improve margins. Significant part of the profitability improvement actions and the benefits from the acquisitions is still to materialize and will be more visible in 2026.

The Specialty Materials business delivered robust results in terms of profits and margin despite all the market turbulences. Gradually, the demand for label, release and packaging materials normalized in quarter 4. This, combined with our efficiency measures and declining variable costs resulted in a good quarter 4 EBIT improvement, up EUR 20 million year-on-year.The Specialty Materials business entered 2026 in a good position to supply a growing market demand and with low investment needs.

Moving ahead to Fibers. Fibers experienced a volatile 2025, impacted by trade uncertainties, currency fluctuations and low prices. However, to put things in the right perspective, if we look at the whole year 2025 and despite the fluctuations, the pulp demand was robust. Global shipments continue to grow at a healthy rate at around 3%. Hardwood pulp shipments grew significantly more than that, whereas softwood pulp shipments decreased moderately.

Fibers South, our platform in Uruguay continued to strengthen its position as a world-class low-cost business platform. Our cost during 2025 decreased by about USD 25 per ton, in line with our plans and what we communicated earlier. And the cost decrease is expected to continue still into this year and into the next year as optimizations continue. To give you some examples of these optimizations, our plantations are increasingly reaching harvesting maturity that improved wood sourcing costs. Besides that or linked to that, we will improve our inbound logistics costs further. On top of this all, we're working to identify debottlenecking opportunities both in Paso de los Toros and Fray Bentos.

Or in general, during the second part of 2025, the hardwood pulp market prices in China increased gradually, but they are -- but significantly from the very low levels that they touched during quarter 2. The Fibers South performance in quarter 4 reached an EBIT of EUR 78 million or 21% of sales, an improvement versus quarter 3 despite the maintenance shut in Fray Bentos in quarter 4.

On the other hand, when we talk about Fibers North or our platform in Finland, it continued to experience low softwood pulp prices and high wood cost. Its EBIT remained at EUR 11 million negative in quarter 4, albeit EBITDA positive. On the positive side, the pulpwood market prices in Finland have decreased significantly and roughly 30% from the peak and at the end of the year. But due to the length of the supply chain, the benefits of this cost reduction come typically and progressively with a delay, and therefore, they will be visible in 2026. Another relevant fact is here that we have entered a strategic partnership with Versowood, the largest private sawmill in Finland, and that will help to structurally improve our position in the Finnish wood market.

Before we move ahead, I just want to recall your attention to the fact that the UPM Forest business will be included in the Fibers North business from January 2026 onward. We will then start to provide additional financial information on the 2 parts of the UPM Fibers reporting segment, meaning Fibers South and Fibers North starting from quarter 1, 2026. Now when it comes to Communication Papers and Plywood, both had a solid end of the year in terms of EBIT performance. The graphic paper markets were challenging in 2025, impacted by tariffs and the related uncertainty. The European graphic paper demand decreased by 8%, although the decrease moderated slightly in quarter 4 at 5%. The North American demand development was weaker and demand decline increased slightly in quarter 4.

In markets that are oversupplied, we closed production at the Kaukas and Ettringen paper mills in quarter 4 reducing our capacity by 13% and our fixed cost by EUR 70 million annually. In quarter 4, we also sold the earlier closed Plattling paper mill in Germany. Communication Papers quarter 4 performance has been relatively strong with EBIT totaling EUR 110 million and boosted by the annual energy refunds. Once again, the business generated a very strong free cash flow that was up to EUR 362 million in 2025, despite the challenging market conditions I've just described.

When it comes to Plywood, the dynamics were different in the different markets it serves. In the LNG shipping segment, demand continued to be strong. In the industrial end segments, it continued to improve. And in the Construction segment, it was stable, albeit on a relatively low level. In this environment, Plywood reported a robust quarter 4 EBIT of EUR 16 million or 15% of sales, which made quarter 4 the best quarter of the year. When talking about plywood, as you may remember, we announced the strategic review of the UPM Plywood business in September. We see plywood as a very good business with strong positions in the mid- to high-end market segments in Europe and globally in the LNG segment.

The business has strong customer partnerships, operational and commercial excellence and a diversified portfolio of distinctive products. It has shown over time that it is able to provide good profitability and cash flow in different economic cycles. On the other hand, despite it has the scale of a midsized company in Finland, so relevant per se, absolutely relevant per se, it is the smallest of the UPM businesses. With this strategic review, we want to assess whether acting as a separate entity or as a part of a different entity, it could create even further value. The strategic review contemplates different possible future outcomes, including maintaining the status quo, a divestment, a partial demerger or an initial public offering.

At this point in time, all options are in play and the review is expected to be concluded by the end of 2026. We closed 2025 with an announcement in December, an announcement about the fact we signed a letter of intent with Sappi that shall lead to the creation of a joint venture in the graphic paper market. As a reminder, we are planning an independent graphic paper company owned 50% for each of the 2 parts, UPM and Sappi, 50-50, which would include what is within the perimeter of the UPM Communication Papers business in Europe and in the U.S. and Sappi's graphic paper business in Europe.

The transaction would create a more efficient, adaptable and sustainable graphic paper business. It will also create structurally competitive cost base and ensure supply security for the European and global customers. For UPM, the transaction would have a positive impact on profit margins, balance sheet and leverage. The numbers are here -- the key numbers are here represented in this slide. With the successful execution of this initiative, UPM would no longer have direct sales exposure to the declining European and North American graphic paper markets. The definitive agreement is expected to be signed during H1 during this first part of 2026, and the closing of the deal is expected to take place by the end of 2026.

So by closing with this part, with this portfolio initiatives, the ones that I mentioned now about Plywood and Communication Papers, but also the other activities and investment, Decarbonization Solutions, Advanced Materials and then the Fiber business, we aim to change the profile of the company, increasing its focus on growth and improved margins and leverage. The future UPM would have an attractive portfolio made by Decarbonization Solutions, Advanced Materials and Renewable Fibers. In fact, all these businesses operate in growing markets and UPM has shown a strong track record of realized growth already above GDP in the past years in this perimeter.

Focused innovation and investments targeted to combine sustainable renewable feedstock and CO2-free energy into high-margin products for customers all around the world will be the catalyst for an accelerated profitable growth ahead. But I'll pause here, and I'll hand it over to Tapio for some further analysis on our quarter 4 results.

All right. Thank you, Massimo. So here, you can see our EBIT and cash flow by the quarter for last year and '24. And from this, you can see that our fourth quarter EBIT increased significantly from the previous quarter, third quarter in '25, but decreased 15% from the last quarter of the previous year. And as Massimo already mentioned, the EBIT margin as such for the fourth quarter was at the same level as it was 1 year ago. Most of our businesses improved their performance from the previous quarter. As we have guided earlier, we booked the annual energy refunds in Communication Papers in the fourth quarter. And then also in the fourth quarter, we booked the increase in the fair value of our Forest in Finland, which was EUR 72 million.

We had the same items benefiting the fourth quarter result in '24 as well. Only this year this year in the fourth quarter, they were slightly smaller. Operating cash flow was very strong in the fourth quarter, totaling EUR 720 million. This includes a working capital release of EUR 460 million for the quarter. Part of that release is seasonal by nature, which you can sort of see if you look at the previous years, but a large share is structural, thanks to our intensified efforts and measures that we have taken during the year to improve working capital efficiency permanently.

Net debt then continued to decrease from the previous quarter. Net debt to EBITDA was 2.29x at the end of the year. And we will continue our efforts to increase cash flow and strengthen the balance sheet during this year. And here on the left-hand side, you can see our fourth quarter EBIT as it developed compared with the fourth quarter last year. Sales prices continue to be the biggest negative driver impacting particularly Fibers, but also Communication Papers and Specialty Materials. Variable costs decreased significantly year-on-year as well, but their positive impact was still smaller at the UPM level than the negative impact from lower sales prices. Perhaps worth mentioning is that for the yearly comparison in Finland, wood cost still was on the increase, so year-on-year, still increasing.

Delivery volumes were slightly lower and fixed cost broadly stable in the fourth quarter. Changes in the exchange rates had a EUR 20 million negative impact on the fourth quarter EBIT as compared to last year's fourth quarter after hedging results. On the right-hand side, you can see the sequential comparison to the third quarter of '25. Sales prices decreased also in this comparison, but variable cost decreased then more. In this slide, this bar showing the lower variable cost includes also the benefit of energy refunds in the Communication Papers that were booked in the fourth quarter. However, if you exclude them, variable costs in other areas -- in other inputs decreased more than sales prices.

Delivery volumes were broadly stable, while fixed costs were up seasonally. In this quarter, by the way, we had also the maintenance shutdown in Fray Bentos, which went according to plan and somewhat lower cost than what we had guided earlier, about EUR 22 million impact on the quarter. Then the other bar on the right-hand side, that includes the fair value increase of Forest assets, which was EUR 75 million higher in the comparison to the third quarter.

This page summarizes UPM's currency exposures. As many of you know, most important currency in terms of our exposure is the U.S. dollar. We look at the impact on the 2025 result as compared to the previous year. Changes in currencies reduced UPM's comparable EBIT by about EUR 50 million after the impact of hedges.

And here is the outlook for the first half of 2026. We expect our comparable EBIT in the first half of the year to be approximately in the range of EUR 325 million to EUR 525 million. In the first half of 2025, by comparison, our EBIT totaled EUR 413 million and the second half EBIT in '25 was EUR 508 million. In the first half of this year, '26 compared to the second half of '25, UPM's performance is expected to benefit from moderately higher sales prices and delivery volumes and moderately lower fixed costs. Performance is expected to be held back by continued weak Communication Papers markets and also by increased costs during the early phase of the production ramp-up at the UPM Leuna refinery.

Currencies started the year at similar levels compared to the second half of 2025. In the second half of 2025, comparable EBIT benefited from the timing of energy refunds and increased fair value of Forest assets. So as I mentioned earlier, those were booked during the second half of last year, and these items are not expected to take place during the first half of 2026 in similar quantities.

Then looking year-on-year in the first half '26 compared to first half '25, UPM's performance is expected to benefit from lower variable costs and moderately higher delivery volumes. Maintenance activity is expected to be lower than in the comparison period. Performance is expected to be held back by continued weak Communication Paper markets and also the increased costs during the production ramp-up of UPM Leuna biochemicals refinery. In the beginning of the year, currencies are negative in terms of their impact on comparable EBIT when comparing to the first half of 2025.

Then the fourth quarter now was the second quarter that we were able to decrease net debt and that while we also paid out the second dividend installment during the fourth quarter -- second dividend installment for the 2024 dividend. And as I said, we aim to lower our leverage and bring the net debt to EBITDA back to below 2x in a timely manner. Our CapEx estimate for this year is EUR 300 million. the cycle of large investments in Paso de los Toros and Leuna is behind us and our maintenance investment needs are consistently below EUR 200 million per annum looking forward.

And finally, the Board of Directors has today proposed an unchanged dividend of EUR 1.50 per share for the year 2025. The dividend represents 113% of UPM's comparable earnings per share for '25 and is equaling a dividend yield of about 6%.

And now I'll hand it back over to Massimo for the summary and some final remarks.

Thank you, Tapio, and this is just going to be a brief recap of the main aspects we have seen so far. So we ended a complex year 2025 with improving performance in most businesses, strong cash flow and decreasing net debt. 2025 has been a transformational year. Across all our businesses, we launched a number of important initiatives aimed to ensure competitiveness and continued performance in the short term, while preparing to change the company profile for continued success in the long run.

The future UPM will have a portfolio of innovative and sustainable materials and solutions. It will be focused on growth, improved margins, robust balance sheet and disciplined capital allocation. All of this as a base to support solid returns. Our Board is confident on the UPM's ability to create value and has proposed an unchanged dividend of EUR 1.5 per share for the year 2025. And this ends the prepared part of our presentation. And I think with Tapio, we are ready to take your questions.

[Operator Instructions] The next question comes from Linus Larsson from SEB.

I'd like to start off, if I may, with Fibres South. You did give some comment, but if you could provide some additional comment on your EBITDA performance as it is right now and where we are in terms of cost per tonne. You said there is still some improvement ahead in 2026 and 2027, but how much, please?

Yes. When it comes to the, let's say, the cost improvement potential, we have indicated earlier on, I believe it was in October, we estimate that potential across the next couple of years in the scale of EUR 15 per tonne. And that's -- yes, that's about that metric. Then when it comes to the EBITDA performance in quarter 4, I'll leave to Tapio to provide some more color.

Well, let's say, we give the EBIT at this point, as said, we will give some further lines on the performance then when we start reporting during this year. But I would sort of remind you of the fact that we had the maintenance shutdown in Fray Bentos during the quarter. So that had that sort of EUR 22 million impact. And even with that, we had an EBIT of EUR 78 million or 21% of sales. So if you look at the EBITDA margin, which we will get some more transparency on then later on, that obviously is at a healthy level as it is. And as I said, then we will work on the cost side more.

Sure. And the cost improvement that you're seeing, is that a linear, gradual improvement over a 2-year period? Or is it more of a step change on an earlier time horizon?

Well, as I've commented earlier on, this comes from improvement, for example, in maturity of the plantation, wood supply, wood cost, logistic improvement. So we are talking more of a gradual and progressive improvement, no big step change. Those have been realized, implemented and materialized already in 2025 or before.

Great. And then if I may shoot a second question, please, regarding energy in these volatile markets, if you could please update us on your hedging. How much of your volume in your Energy division is hedged in the first quarter and for the full year 2026, please?

Well, look, I will leverage the fact that Tapio leads also the Energy business and he is the most knowledgeable person in this room to talk about energy and transfer the question to him.

Yes. So well, like we have said before, we don't sort of disclose the hedging rate directly or percentage to our business. But maybe what I'll sort of rather point out to you is that if you look at our result, which is in Massimo's notes already that he told you, we achieved EUR 10 better average sales price during last year for the full year than what the average spot was. So that is coming from 2 sources. One, us being able to create value on the output that we can regulate primarily then, meaning hydro and then also from the hedging results. So we have been able to sort of create value on both ends.

And let's say, coming into this year, we are looking to sort of perform in a similar manner. The sort of volatility in the market continues and the year has started with a real winter, which obviously you can see in the spot prices at the moment and in the fact that the hydro balance is dropping quite quickly now in the Nordic area. So in that sense, weather, obviously difficult to forecast any longer term, but the year has started in that manner.

Right. But are you then suggesting that the premium that you just mentioned, is that what you expect to achieve in the first quarter as well?

That we will see.

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

Just in terms of the evolution into the first half of 2026, I know you qualitatively called out a number of the moving parts. But just in terms of the -- a few of the discrete components, am I correct to read that your energy rebate was around EUR 100 million in the fourth quarter? Can you give us any indication on what losses you would expect from Leuna? Should we expect those to be even greater than they were in the second half of '25? And any kind of indication on the path to profitability of that operation? And I think you talked about fixed cost savings of about EUR 70 million from some of your communication paper closures. I just wanted to confirm, should we be thinking about that as a run rate immediately for Q1 versus Q4?

Yes, if I'll take that. So in round figures, it was -- the rebate impact was similar to last year. And well, this EUR 100 million that you mentioned is in the sort of right ballpark. Then in terms of the impact of the Leuna refinery, if we now had EUR 49 million negative EBIT in the second half of last year, we still -- as the production is ramping up, kind of in advance of significant sales will have additional costs, so a headwind from the sort of operating cost side, plus then we will have also depreciation kicking in now during the first half of the year. So in that sense, there will be a kind of larger negative impact still during the first half compared to the second half of last year. I would say, for the whole year, this kind of additional headwind will be, let's say, in the scale of some ten millions -- tens of millions.

And then maybe on the fixed cost comment, yes, we -- as announced then towards the end of the year, production stopped both at -- or had stopped both at Ettringen mill and Kaukas. So this EUR 70 million fixed cost as a run rate will then benefit us during the first half of the year in the Communication Papers.

If I could just ask a follow-up on Communication Papers. Regarding the joint venture, can you give us an update on the status with the major antitrust authorities? Have you filed with them yet? Have you received any feedback from them yet at all?

Yes. All what we can say at this point in time is that we have engaged with them in a dialogue, in a constructive dialogue and work is ongoing on building the necessary, let's say, information and so on, but there is not more than this to share at this point in time.

The next question comes from Robin Santavirta from DNB Carnegie.

First question I have is related to the H1 EBIT guidance you provide. Now we started the year with higher hardwood pulp prices compared to last year. And I guess you expect somewhat higher volumes in H1 and also lower input costs, plus we have quite significantly less mill maintenance cost in H1 this year versus last year. Still the midpoint of the guidance range is close to last year's outcome. What are the key negatives we should expect in H1?

Well, if I comment, of course, one thing you have to remember that last year, we started with the U.S. exchange rate of 1.04. And obviously, that sort of exchange rate impact is mostly felt by -- in the Fibres business. So that obviously is a headwind in that sort of year-on-year comparison. Then we have, as pointed out in the forecast or in the outlook commentary Communication Papers where, let's say, despite our measures to cut and save on fixed cost, then reality is that we have a sort of a declining paper market to work in.

We had also -- even if we have said earlier that the direct impact of tariffs has been still small in the sort of low tens of millions of euros for the full year last year. That, in a sense, impact we did not have in the beginning of the year last year. And then perhaps also as a significant sort of point that we just discussed a minute ago that we have the additional headwind even if we do see improvement on the biofuel side, we have additional headwind in the biochemicals. So those are the factors that are then included in the range that we have given.

That is very clear. Second and last question I have is related to the wood cost in Finland. We have seen quite significant declines. I can also see from data that the Finnish forest industry's procurement of wood raw material has been very low since last summer, many months, almost 50% lower procurement of wood compared to historical averages. How should we now look when we go into the high season of wood procurement in spring? Is the expectation now that pulpwood and even log prices could start to come up towards or to higher levels in the spring and early summer? Or how do you sort of -- what do you bake in, in your assumptions related to Finnish wood cost? And also added to that, the Finnish pulp mills, your former Chairman expects a big pulp mill to close in Finland. You now generate EBIT losses, not EBITDA losses, but still EBIT losses. Are you looking at sort of even terminal closures of any of your pulp mills in Finland?

Yes. Let me pick the second question. I'll leave the first one to Tapio. But well, when you assess the profitability of an asset, you don't do it on a base of a quarter. You do it on a long-term perspective. And if we look for a longer-term perspective, and our assets have been profit positive. Our assets in Finland have been profit positive. And they are well maintained. They are of a scale to grant sufficient competitiveness. And we are continuing to work to enhance that competitiveness, the deal with Versowood, what we are operating to in terms of internal improvement and so on. Last but not least, your first question was about declining wood cost. So first, a decision about closing an asset is not something you speculate about or you forecast for. And second, this is not part of our current considerations.

Maybe if I comment on the, let's say, questions that you had on cost and harvest and so on. So obviously, why the harvest levels have been low in Finland is that like we have said already, a while ago, a good while ago that the wood prices in Finland have been on unsustainable levels. So that's why wood has not been purchased. That's why also we have seen some moderation on the wood market prices in Finland. Having said that, good to remember that the wood prices more or less doubled in Finland. So if they have come down by 30%, it doesn't mean that they are low. And I would expect that, that will also, in a sense, be something that kind of will calibrate any sort of kind of market dynamics then going forward as well.

The next question comes from Ioannis Masvoulas from Morgan Stanley.

Just 2 questions from my side. The first, when we look at the EBIT bridge '24 to '25, what sort of fibre cost increase have you seen in your business? Because you talked about pulpwood prices doubling, but you didn't necessarily bought at the peak. So some clarity on that would be very useful. And then the second point, I think in October, you were talking about a $25 to $30 per tonne improvement in Fibres South. Today, I think you're talking about a EUR 15 per tonne improvement. Could you just reconcile the 2 figures? And what shall we be baking in on a 2-year view?

Yes. Well, let's put the currency apart. If I mentioned euros, that was, let's say, a mistake. We always talk dollars over there. And then, yes, let me correct it. I think we talked at the time I'm checking in $25 to $30 in 2 years. So I restated that, not $15, but $25 to $30 in 2 years, dollars. And then there was the other question about...

So wood cost. So basically, again, point being that when it comes to Finland and wood cost during last year, as we do have a delay of, let's say, at least 6 months from when we buy wood to when we actually consume it at our mills, then we did still see during the last year '25, as said, even in the fourth quarter, a negative impact from wood cost compared to the previous year. Then any kind of benefit from the fact that from summer on, we have seen a movement downwards in the wood market price in Finland, that benefit then will start coming into the bottom line only during this year. And I would say, let's say, more meaningfully from the second quarter on.

Okay. That's very helpful. But if I were to push you a bit, could you perhaps provide a quantum of cost tailwind you've seen realized through your P&L in 2025?

No, we don't disclose that.

The next question comes from Andres Castanos from Berenberg.

Two questions on the Versowood deal, please. Can you please describe the efficiencies that you will unlock by partnering with Versowood? Meaning why and how partnering with them will make the cost of the pulpwood you need cheaper versus spot prices? And I guess also the complement to this question is, how much of your wood needs in the Northern platform are now covered either by the Versowood agreement and by the forest that you own in Finland?

Okay. Let me cover the question about the deal and the logic behind the deal. Basically, Versowood being, as I said, the biggest sawmill in Finland and was in, let's say, -- had an interest for locks to feed is capacity and for a sawmill that is what we could put in this deal and what we did put in this deal. On the other hand, what we are getting through this deal is availability of pulpwood and chips, which is what is important for us, for our pulp production. So this is the, call it, industrial logic behind the deal. I do not have at hand numbers to share when it comes to, let's say, percentages of wood needs covered either way. Let me see, Tapio, do you have anything?

Well, let's say one can say in terms of our own forest, obviously, that varies in a sense a little bit depending on the market situation, but round figures, one can say that from our forest we can get -- which is about 0.5 million hectares in Finland, we can get around 10% of what we need. So still majority has to come from -- vast majority from sort of outside sources and don't have a number to disclose in a sense how much this Versowood deal will impact that, but obviously, will be a sort of meaningful increase in our sort of secured wood supply from the synergies that this partnership will give us.

Okay. Another question, please, if I may, would be on the biodiesel market, good improvement this quarter. And I was wondering if this outcome was sustainable or we are seeing one-off effects because of maybe from buying ahead of the implementation of the new RED III regulations. Do you think this performance is sustainable going forward? And yes, what dynamics are you seeing there in the biodiesel market?

Yes. I would say that to answer your question, we need to do -- to go behind what is -- sorry to go and talk about what's behind this performance or this performance improvement. So some elements are linked to, I would say, improved market dynamics and improved prices on the market. But there is also a part which is meaningful that is down to own actions in terms of improved operational efficiency and output out of the Lappeenranta refinery and improved sourcing of crude tall oil and improved cost of crude tall oil, which is the feedstock that we are utilizing for this business. So if we look -- so the market considerations, we leave it to everybody because we can guess about that the same that everybody else can guess, if not acknowledging the improvement that has been visible in the last couple of quarters. But then when it comes to our actions, they are there and they will be continuing to yield results.

Now also if we -- in this area, I want to take the opportunity of this question to broader the angle a bit beyond one or a couple of quarters. And because there have been some significant changes in this space with the issuing of the so-called RED, Renewable Energy Directive #3 in Europe. And on the base of that directive, if and when implemented and implementation is going to be driven by the different countries, that is going to be increasing according to a number of sources, the demand for biofuels and sustainable aviation fuels from 6 million to 20 million tonnes in Europe by 2030. So it is a significant step up. And this is going to be coming from elements like increased minimum targets, minimum greenhouse gas reduction targets in transportation. A minimum target needs to be achieved of 14.5% for all transformation modes. Then when it comes to aviation, there is a target to increase the use of sustainable aviation fuel from 2% in 2025 to 6% in 2030.

Besides that, by 2030 as well, let's say, first-generation biofuels made, for example, out of palm oil or palm oil waste will have to be phased out. And Germany, for example, talking about implementation of the directive in the different countries, Germany has made the decision to phase it out latest by 2027. So basically, and without going into further detail, there are the implementation of this directive is going to be changing and changing in a very positive way the general market situation in this space.

Okay. With this, I'm mindful of time and that we have used the time that was available. So thank you all for your participation and for the questions that we are being able to answer. Thank you very much. Have a nice day. Bye. Bye-bye.

Hello. Good afternoon, good morning, and thanks for joining me today for an update about something that we have shared this morning. Together with me today, there will be also Tapio Korpeinen. I'm Massimo Reynaudo, I'm the CEO of UPM. Earlier on this morning, we have disclosed the fact we have reached agreement, agreement under the form of signing a nonbinding letter of intent with Sappi for the creation of a joint venture for a graphic paper company. The 2 parties will be owning the joint ventures in equal proportions.

And the joint venture will be including the -- within the perimeter, the UPM Communication Paper business as it is today and Sappi Graphics Paper business in Europe. UPM and Sappi have separately and independently over time, stated their long-term commitment to the graphic paper market. Through this operation, we want to some way restate our commitment and with the creation of this joint venture, basically transfer this commitment into an action, into a company that will continue this, let's say, this commitment we have made into the future.

On top and beside that, the 2 companies, UPM and Sappi share common values, have similar corporate enterprise cultures, value propositions based on quality, on reliability, on sustainability. So this represents a strong base for the success of the joint venture. But coming to some numbers and some financials. The joint venture will have at this creation an enterprise value of EUR 1.42 billion, excluding the value of the synergies it will generate.

From a UPM specific angle, this transaction will generate a financial benefit in the scale of about EUR 1.1 billion, which includes EUR 613 million of cash payments and EUR 406 million of pension liabilities that will be transferred to the joint venture. Besides that, as anticipated before, UPM will be holding a 50% share in the joint venture, which will create the possibility for further financial benefits to the distribution of dividends in the years to come. But Tapio will be coming back to the financials and providing some more color around what I was -- what I just said.

But besides what happens to the joint venture and the Communication Paper business that will be part of it, this transaction, once implemented, will bring significant benefits also to the future UPM beside or, let's say, ideally without Communication Paper. The new UPM will have or will see improved profitability, a stronger balance sheet, a lower leverage and a much more -- much stronger growth-oriented portfolio. And this is something I'll be expanding about later on.

It's fair to state that the transaction is subject to a definitive agreement between the 2 parties and the approval from merger control authorities in Europe, in the U.K. and in some other jurisdictions. Going a bit more in the detail of the joint venture from an operations standpoint, it will include within its perimeter 12 paper mills. 8 paper mills, 12 paper machines will be contributed by UPM Communication Papers. So I'm referring to 3 mills in Finland, Kymi, Kuusankoski, Jamsankoski; 3 mills in Germany, Schongau, Augsburg, Nordland; 1 mill in the U.K., Caledonian and 1 mill in the U.S. Blandin.

Sappi will be contributing 4 mills, 7 paper machines. The 4 mills are in the following country, one by country, in Austria, in Germany, in Finland, in the Netherlands. But then when we talk about the perimeter of the business from a portfolio standpoint, product portfolio standpoint, the joint venture will have products basically serving all the needs of the graphic paper industry, from newsprint grades all the way through wood-free coated paper, all what's in between and all the applications behind these different products.

From a geographical standpoint, it will be a global business. It's fair also to recognize that the center of gravity of this business will be mostly around Europe. If we refer to the revenues generated at this point in time, about 3/4 of the revenues are in Europe, the rest being more or less and equally divided between North America and the rest of the world. But basically, the joint venture, putting together, let's say, assets and resources from the 2 companies will enable a value creation through the joint venture in a level and in areas that none of the 2 companies separately will be able to tap into.

And to give you some examples of these areas, there can be synergies generated through asset optimization through allocating or reallocating volumes on to most cost competitive assets through product rationalization, there will be most likely a fair amount of duplications. There may be a number of duplications in a number of other areas, which offer opportunities for streamlining. There will be equally opportunities to capture synergies to increase efficiency in the area of sourcing or logistics.

And in the area of logistics, a wider mill ecosystem will represent also -- will offer also the possibility to serve customers potentially from different locations and ideally from locations which are closer to customers with also benefits in the area of sustainability. So we estimate that over the 3-year period after closing, the amount of this synergy on average can be in the area of EUR 100 million per annum. We believe this transaction will be positive for UPM, will be positive for Sappi, will be positive for the joint venture, but we believe also strongly it will be positive for the market.

In a market which is highly competed, which is struggling under the pressure of severe overcapacity, the joint venture represents the presence of a player beside the many other players in this market, which will be offering reliable and committed supply to the customers. Both parties separately today, UPM and Sappi have strong commitments in the area of sustainability. This commitment will just be joined and will be developed further, as I said with the example before, talking about logistics, will be enabled further and developed in areas or to levels that each part individually will be struggling or will not be in a position to deliver.

So in other terms, the joint venture will ensure long-term viability for the graphic paper market and the customers in this market because the paper may just be the substrate upon which their product travel, the product being advertising or information or other things. But the core business of our customers, therefore, a different one. But without the substrate, their product will not travel. So a viable, let's say, reliable supply of paper in the long run is critical to ensure that the graphic paper industry, meaning the customers in this industry will have a long-term solution for their business.

But having said that, as I anticipated, I will now hand over the stage to Tapio for some more depth about the numbers I've just introduced.

Okay. Thank you, Massimo. So in the next couple of slides, I will go through the material terms agreed in the letter of intent, which is nonbinding, as Massimo already pointed out. So first of all, the enterprise values based on which the agreement has been made is EUR 1.1 billion for communication papers, UPM Communication Papers and EUR 320 million for Sappi Europe business contributed to the joint venture. And as Massimo pointed out already, these values are excluding the value of synergies in the joint venture.

Then as purchase price cash proceeds of EUR 613 million will be paid by the joint venture to UPM and EUR 139 million to Sappi. And as a result, then UPM and Sappi would own 50% of the equity or shares of the joint venture. The joint venture will raise long-term funding, long-term debt independently. So there is no recourse to the shareholders. And the funds then will be partly used for the cash proceeds as part of the purchase price payable to the shareholders.

The objective of the joint venture is to independently operate the Graphic Paper business to implement the synergies and therefore, then generate value for the shareholders. And based on that, then the dividend -- the joint venture would distribute dividends to the shareholders in line with its financial performance and standing. And then there will be the optionality around exit for the shareholders of the joint venture.

So 3 years after the closing when the joint venture is expected to have completed the integration and realized significant synergies, then either shareholder may initiate divestment of their shareholding. I would say from UPM point of view or perspective, the financial merits of the transaction are quite material. That includes, again, the EUR 613 million cash payment that will be received at the time of closing to UPM. And at the same time, also pension liabilities connected to the Communication Papers business will be transferred to the joint venture.

And those pension liabilities in the UPM balance sheet today are valued at EUR 406 million. And then obviously, UPM will have the 50% share of the joint venture. So altogether, significant financial benefit realizing immediately at the time of closing from the cash payment, transfer of liabilities and then, let's say, either in the forms of dividends and eventually at the time of exit in terms of the value creation within the joint venture. This EUR 1.1 billion valuation of UPM Communication Papers that I mentioned equals multiple of 4.6x EV/EBITDA.

If you look at the last 12 months EBITDA generated by UPM Communication Papers, including third quarter of 2025. These assets are less than 10% of UPM's total assets. And then when the joint venture is up and running, UPM's ownership would be accounted for using the equity method in UPM accounts. Here, we have an illustration based on reported figures of UPM Group, first of all, for last 12 months, including the third quarter of this year, which is on the left-hand side here. Then we have the reported figures for the 12 months for Communication Papers and then basically pro forma illustration what UPM Group without Communication Papers would look like, again, based on this LTM figures.

So as you can see in the middle column here, Communication Papers during this 12-month period generated EBITDA EUR 241 million, about 9.3% of sales. EBIT, EUR 180 million, 6.9% of sales. So lower margin business than UPM Group as a whole. But then as you can see, 16.9% comparable return on capital employed. So in a declining market, in a kind of a capital-light business, it's possible to generate good returns. Then on the other hand, if you look at the UPM figures, excluding Communication Papers, margins are higher. EBITDA 14.3% EBIT 10.3%. So basically, the remaining of the rest of UPM then focus on higher-margin businesses in growing markets.

And shortly, Massimo will tell about that more. But then before that, about the indicative time line or the next steps. So during the first half of 2026, we expect to complete the negotiations of definitive agreements between Sappi and UPM for the joint venture. And also, we would expect during that time to complete negotiations or agreement for external financing for the joint venture. And then we would expect to be able to close the transaction by the end of next year, subject to conditions and regulatory approvals, most notable amongst which is the approval by the merger control authorities.

But now, I'll hand it over to Massimo to talk about UPM's focus going forward.

Thank you, Tapio. Actually, now let's look at the other half of the sky. So how would UPM in the assumption of a positive transaction that will lead to the constitution of this joint venture? How would UPM look like? It will be smaller for sure. But it will have a strong growth profile. As Tapio has illustrated earlier on, we'll have stronger margins, we'll have a strengthened balance sheet and we'll have no longer exposure to declining market and specifically the declining graphic paper market.

But talking about the portfolio, what is or how would the future UPM look like? Well, first of all, this portfolio will be insisting on 3 segments: Renewable Fibres, Advanced Materials and Decarbonization Solutions. Each of these segments encompasses different businesses. So from the Renewable Fibres, it's our pulp-making units, both in the Finnish or North platform as well as in the South or Uruguay platform.

In Advanced Materials, pending the outcome of the strategic review about the plywood business, there are Adhesive Materials and Specialty Papers. In the Decarbonization Solutions, there is Energy. Our energy business and our biorefining business encompassing under this definition, both our biofuel and now the biochemical business we are creating. I said that -- or I talked about a growth-oriented profile. And when saying this, I'm not just kind of portraying an ambition for the future. In the graph you see on the screen on your left, you see what has happened in the last 10 years.

So if we take this portfolio of businesses, which I've just described, and we simply look at the top line growth during that period of time, we see that, that is contributed or -- sorry, combining into a 4.4% CAGR. This is well above the GDP growth during the same period of time. So we have demonstrated or this portfolio has already demonstrated the ability to grow ahead of the market in the past. But now at the same time in this series, the series of numbers you see in 2024. Let me remind you that if we talk about large investments of the recent past, that's not including Paso de los Toros at full potential. That's not including, for example, anything of Leuna.

These, and these are just examples, are all elements that are going to be building on this trend of growth you have seen in the past. Now we shift and move the attention to the right part of the screen. You also see the global profile of this portfolio. Revenues referring to 2024 are -- more than half of them are outside Europe with significant presence in Asia and North America and of course, in the rest of the world.

You may recall from previous meetings that we have indicated our willingness, and we are aligning our plans behind our ambitions to grow in Europe, but then to grow more than proportionally in the other parts of the world because in these businesses, in this portfolio we have described, there are besides Europe, significant growth opportunities in other parts of the world. So we will continue to build a global resilient and performing business.

Now let me just give you some more color about each of these businesses and how we look at them. I'd like to start in this slide from the bottom. You see on the very right, a sign plus. That is a figurative characterization of the growth -- the future growth in this market segment. So the Fibres market going forward is expected to grow, give or take, and across cycles at GDP growth level. In this market, as said before, we are now at the point of capturing fully the value coming from the investment done in Paso de los Toros and in Uruguay in general. 2025 has been the year where we have been running first year full year at full capacity.

But as communicated in other occasions, we do see the possibility to push capacity and production well above our current levels through debottlenecking, which means in a CapEx-light and CapEx-efficient way. So this will be contributing to generating more top line growth. I would say this irrespective from the market. But equally, you may recall from previous call, we have indicated the confidence in the next couple of years to extract still significant cost improvement in Uruguay, and this will be contributing to a bottom line growth in this business.

So this business at the end of this significant investment cycle in it will be a strong cash generator. And with this cash, we will be supporting and fostering our growth ambition in this space as well as in other segments of our portfolio. If we talk about Advanced Materials, we have characterized the growth in this segment always figuratively with a couple of plus. This is to indicate that these businesses in system segments that typically and across cycles grow at more than GDP pace.

We put a lot of focus and effort in recent times to improve and expand the competitiveness of this business. But we also put investment to capture further opportunities. If you remember on the left part of the circle that I presented before and outside Europe. I'm referring here to investments we have announced for adhesive materials in the U.S., in Malaysia, in Vietnam. Investments in this area are CapEx light.

And in this area, through the rightsizing activities we have performed or we are performing so far, we do consider to have enough capacity to support the organic growth for the years to come without the need of any substantial new capital injection. In this area, we also stay open to consider acquisitions if and when the right conditions will materialize in the future to accelerate the growth in this segment.

Last, absolutely not least, Decarbonization Solutions, which sometimes -- some ways, sorry, represent the newest businesses in the UPM portfolio. It is businesses that insist on, let's say, markets, which have, in a number of cases, exponential growth opportunities. This is what, again, figuratively, we have characterized with some world-class signs. Let me be more specific about that. If we look at energy, for example, in Finland, the demand of CO2-free energy is not -- will not just be growing, is already growing.

It's all indications point toward a significant growth in that -- in the space of the demand in that space, supported by the electrification of the economy, supported by data centers, future projects, but current projects being in a construction phase, potentially amplified by large scale, I would say, industrial project based on energy intense and needing CO2-free energy. So energy is a business whose fundamentals are set to create further, let's say, revenue profit and value going forward.

Bio-refining, well, that is including biofuels. I think we can say we have turned the business around from the tough last couple of years when the business due to market circumstances as being loss-making, but commented in our quarterly call about the performance of the business and an outlook for the market as a whole that is definitely more positive than it was until some time ago. And here, I'm referring to the fact that sustainable aviation fuel will be driving an increase on the demand in the years to come.

And despite the sustainability may not be making the headlines on the news the same way it was some time ago, the sustainability industry is still today on a global base for the amount of investment it attracts the second after the ICT industry. And the proof of that is, for example, that in the COP Summit in Brazil, 23 countries have committed to quadruple their consumption of, let's say, biofuels or e-fuels by 2035. So it's a business which is insisting in an area which -- where demand will be growing, and we are well positioned -- competitively positioned today to capture those benefits while we keep on working to potential future investment to expand our presence there.

And biorefining, well, it's about Leuna. We are continuing to execute in a disciplined way our operational and commercial ramp-up of the facility. We'll be sharing more during our next call, but this is an entry into a new market. It's a market that today is not supported by mandate or any regulation poorly demand. Still, we are confident we can build a valuable business there because of the strength of our valuable proposition and because of the scale of the opportunity pipeline we have ahead.

But also in this space, 2 weeks ago, Europe has issued the bioeconomy directive that talks about creating really mandates, for example, certain quantity of bioplastic to be from renewable sources and so on. Would this come, it would be a further catalyst and amplifier of what we are doing. So -- and to recap, we have businesses with different growth profile with different, I would say, CapEx intensity when it's about investing to capture further opportunity, but also it is businesses where we have concrete growth opportunities in the, let's say, next couple of years or so without the need of any significant further capital investment just on the back of what has been invested that now we are working to capture as a value.

So -- and to finish, this is a slide you may have seen a number of times in our presentations. It indicates the priorities. These are consistent priorities within our organization. Improving competitiveness is the foundation of everything we do. And this is what we are working actively upon to perform in a market like it has been 2025 so far, which proved to be pretty volatile and challenging. But moreover, the work we are doing now will ensure that we are going to be capturing our fair share or more than our fair share of the growth that will come when the economic cycle will turn.

We have been talking about focused growth. I trust you will see through what we have presented before, also through the evolution of our portfolio, how we are setting the base for the UPM of the future to grow top and bottom line consistently and profitably. We have always talked about our businesses or the ambition for our businesses to be world-class businesses, meaning that UPM should provide the best condition for every business being the best in the industry or at least at par with the best. This is what we are working upon. Every one of our businesses is working upon.

But also whether it is the joint venture that we have talked about now or whether it is the strategic review of plywood, we continue to assess the opportunities that, let's say, the market or the economy can offer for creating value for the businesses through it shareholder value. I would say this concludes my presentation.

I would be happy to invite Tapio to join me here. And together, we'll be happy to take your questions.

[Operator Instructions] The next question comes from Reinhardt van der Walt from Bank of America.

Congratulations on the agreement. I just want to see what your thinking is now around capital allocation because it sounds like your view is that the portfolio is in a good place that you've got the right kind of assets that are sort of future-proof. But we've got a decent amount of potential cash proceeds coming in. Is the focus here on maybe looking at more strategic investment opportunities? Or is it on shareholder returns? Or should we think about this as maybe a natural de-gearing of the balance sheet?

Okay. Reinhardt, well, look, here, we're talking about a nonbinding agreement. So we are initiating a journey today that we trust through the work we will be doing over the next months will lead us to a positive transaction at the end of next year. Let me also put beside that, that we are doing this strategic review about plywood that I talked about. So there are over the next months, a pretty different number of situations that can materialize.

But at this point in time, I mean, our focus at least as a management is not about where to allocate the money or how to spend money. We do not have yet our focuses completely on, let's say, a positive value-accretive conclusion of these 2 strategic initiatives, which means that this will be a more, let's say, relevant question further ahead in time. And surely, a robust balance sheet remains an option.

Understood. Very helpful. And maybe just one follow-up, the pension transfer. Can you just give us a sense of what the pension transfer approval process looks like, where you need to get approvals and the key stakeholders that are going to be involved? Obviously, just conscious that from the pension holders' point of view, the counterparty obviously changes quite a fair bit now.

Yes. Maybe if I'll take that. So again, let's say, figures, first of all, that I've mentioned then referred to the balance sheet value in the end of June this year. And then the kind of details of transferring the pensions to the joint venture still to be worked upon. Principle, of course, is that pension sort of liability that pertains to the business of Communication Papers, it does transfer by law to the joint venture, that receives those businesses. But then, let's say, the details of that and approvals needed for that, that is still under those more detailed negotiations that will happen between now and the definitive agreements.

Understood. Helpful.

The next question comes from Ioannis Masvoulas from Morgan Stanley.

Well done on the proposed transaction. My first question is on antitrust aspects of the proposed JV. As the business will have significant market shares across both coated wood-free and coated mechanical paper, could that suggests potential for significant remedies to overcome any antitrust considerations? Could that involve asset sales or a more accelerated closure of mills? And do you have a sense on what sort of EBITDA impact we could expect from that relative to the pro forma numbers you've articulated?

Great. I'd like to bring 2 angles here into the answer to your question. Thanks for it, by the way. First one is that market share as well as capacity share in our view, has a limited, how can I say, value and reference because market share, for example, it changes very much depending on by country, changes very much by product grade. And by the way, within the industry, there is a fair amount of substitution between grades possible. It changes over time, for example. So talking about market share within a certain geographical profile, it has a very limited value, at least in our view.

Besides that, let's not forget that this is a heavily oversupplied industry, which scrambled quite a few of the traditional logics here with significant or anyway material imports from other parts of Europe -- of the world and into Europe. So our view is that there are many more aspects to be taken into consideration beside and beyond market share. So this is in one side. On the other side, we do see this transaction as coming at the intersection of different things. One is competitiveness. The other one is resilience. The third one is sustainability.

These 3 and some more, let's say, elements are indicated as key pillars in the Draghi report. And the Draghi report has inspired directions that have been taken by European Commission in a number of different areas. So with this, we do not anticipate decisions from the commission. We will be working openly with the commission, sharing all the information that is required, working with them, explaining the situation. But equally, today, we stay positive about the outcome, even though we do not anticipate that. And surely, we don't anticipate or speculate on mitigations, not at this point in time definitely.

Okay. That's very clear. And the second question around the balance sheet of the JV. So my understanding is that there will be debt raised at the JV level of EUR 750 million to pay the 2 partners. And based on the pro forma EBITDA, that's around 2.5x leverage pre-synergies. Do you feel that's the right level of leverage for the new entity given the structural decline in overcapacity in the graphic paper market? And then around the EUR 750 million, is that first tranche of debt recourse to the JV partners or not?

Maybe if I'll comment on that, well, maybe to start from the end. So there -- as I said, there will be no recourse to the shareholders from the joint venture. So it will raise its financing independently. We have, I would say, good confidence based on discussions that we have had with banks to date that the credit of the joint venture will sort of facilitate this level of financing, may land, like you mentioned, to that sort of territory, 2.5x EBITDA at the time of closing when the joint venture is initiated.

I would say that the joint venture's intention would be to keep a strong balance sheet then going forward. So likely then also kind of that ratio improving over time as the synergies are implemented, and there will be some significant positive cash flow coming from that.

The next question comes from Lars Kjellberg from Stifel.

Coming back a bit to the synergies that you spoke to and you're talking to sustained higher capacity utilization rates. So the question really being, how much of these synergies will be generated from you taking out capacity to enable you to run your machines? And the second question I really have is about there are some lines of Jamsankoski and Nordland that are not included in this. So how do we -- how should we think about that potential dissynergies that these mills now broadly speaking will be folded into the JV out of your control?

Yes. I mean about the first question and the operating rate, I believe this is one of the things that the joint venture can enable at a point or in a scale that none of the 2 companies separately can enable through our restructuring. I believe the joint venture having a larger asset portfolio will have much more flexibility in terms, as I said, allocating volumes, allocating -- optimizing product ranges and so on. So increasing operating rate at levels to support business efficiency and competitiveness is exactly a key pillar of this plan.

Then when it comes to the second question, you mentioned Jamsankoski. I would even open up there is another couple of sites if we want where we have, let's say, the presence in the same area of different business areas. But the reality is that within the UPM business, we have been operating -- it's key in our operating model with businesses which are almost completely independent. So even if in a number of areas, there are a number of, let's say, presence from different businesses, they are pretty independent already.

Of course, there are adjacencies and there are some dependencies, and this is exactly part of the work that we will be doing starting today to get to a proper separation of the 2 businesses to ensure what was mentioned before that the joint venture will be able to act in a completely independent way. Of course, the separation can imply some separation cost or carve-out cost, but it's way too soon to speculate on that. I would just restart and restate that we are not building a new architecture. It's potentially pushing a bit further an operating model that we have right now based on the -- this business is operating almost independently.

And like I said, there is basically in the next phase, a kind of stage where the more detailed agreements on those shared sites will be negotiated and based on that, the site synergies can be shared. We have experienced that from the past as well already how that can be done.

And just one more question, if I may. On your pulp exposure will the cost increase as you exit this. Will you have any sort of contractual agreements to supply pulp into these assets, which would potentially enable you to have a regular customer base outside China in a better way, including a Southeast short position in Europe?

Well, again, those are the, let's say, arrangements that are now then to be negotiated. And again, from the joint ventures point of view in a sense to find a competitive arrangement going forward.

The next question comes from Cole Hathorn from Jefferies.

I'd just like to follow up on the free cash flow. I mean, strategically, the JV and the synergies and how you're going to run it makes a lot of sense. I'd just like to understand the implications for the free cash flow of UPM going forward. Can you give any color on how much free cash flow your Communication Paper division is generating or how much CapEx you spend in that division?

And the reason I ask is because there will be a chunk of debt allocated to the new JV and you're going to be trying to understand how much dividend you're going to get back every single year versus free cash flow you're losing by giving up the Communication Paper division now. So I'm just trying to understand what the impact on the free cash flow is going to be.

Well, let's say, obviously, early to comment on any numbers in a sense, looking at the joint venture as such. But we have obviously kept the CapEx level quite low in the communication papers going -- looking backwards in history, given that we have been sort of consolidating the business around the best assets, and that will continue, obviously be one sort of source of free cash flow for the joint venture as well.

And again, of course, let's say, looking at the joint venture point of view in a sense or the merit of the joint venture, given that now we have a larger portfolio of mills to work with, then obviously, we should be and are aiming to sort of improve the free cash flow of that portfolio when it's combined in the joint venture. Then eventually, how it's shared with the shareholders, then that, as said, also will be the function of kind of the financial standing going forward. But that's, in a sense, where more cash flow will be generated is through the synergies from the larger portfolio of graphic paper mills and machines.

Maybe if I just follow up on that. I mean, you're pulling out cash by raising debt in that JV initially to help yourselves pay down debt in the UPM entity, and there will be questions of what you do with that 600 million cash that you're getting out. But in the JV, has there been any discussion of how the initial dividends will come back to UPM and Sappi?

Will it be a couple of years of that JV actually focusing on the debt paydown and reducing the pension liabilities and then kind of starting dividends to UPM so that you get some cash flow from the JV in kind of year 2, 3? Or will you get it year 1 already? I'm just wondering if there's been any discussions there?

Well, I'd say without going too much into details, yet to be sort of determined. But the principle is, of course, in the beginning, there is going to be some upfront cost in terms of setting up the joint venture, starting, let's say, the actions to implement the synergies. But let's say, with the payback of those, then the sort of financial standing will improve. And then from that, also the capacity to distribute cash to the shareholders will sort of start to kick in.

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

Just following up on the last answer to start with. You mentioned some initial restructuring costs. I just wondered if you could give us any kind of indication about how much you'd anticipate the JV incurring there? Secondly, you said you'd have some initial discussions with banks regarding that leverage. I just wondered if you could confirm that you think you'll be able to -- if the JV will be able to borrow at an investment-grade interest rate?

And then finally, I just wondered if you had considered any other kind of deal structures before you settled on this 50-50 JV and whether those were particularly ruled out because they didn't have the merits of this deal in any particular shape or form?

Maybe if I'll start with the first couple of points. So again, early days to comment any figures or expectations on that front. And I would say also as far as financing is concerned, then we will have more to say or tell about that when we have, let's say, completed the discussions and agreements with the banks at the time of the definitive agreements. But as said, let's say, we think that -- and our, let's say, partners on that side think that, let's say, the financing capacity of the joint venture, as we see it now is quite good.

And on the deal part, I mean -- I believe Sappi was for what I said at the beginning, the ideal partner in this deal. So this is why we have been working together. And when it comes to the construction 50-50, this is what we felt was the best solution considering a number of different elements from what every party was contributing to a number of other metrics. So this is the best deal we could imagine or the deal that will create more value through the synergies that it will be able to unlock. We did not see the similar potential through other deals, neither we seek it.

The next question comes from Pallav Mittal from Barclays.

So a follow-up on the dividend. Is there a minimum payout ratio or a time line for when regular dividends are expected? Just trying to understand it given the initial target leverage of 2.5x. And also, will the JV have any covenants or restrictions that could impact these dividend payments to UPM and Sappi?

Well, again, those details are sort of early to comment on. I think there is kind of a shared view in a sense that if the sort of initial leverage would land in that sort of 2.5 area, which, let's say, we are looking at now, then over time, we would want to keep the sort of balance sheet in a good shape, have strengthened the balance sheet going forward for the joint venture to sort of secure financing in the future years as well. So that obviously will be one key sort of consideration in thinking about then the level and timing of eventual distribution of dividends.

Sure. And if I can just ask one more. So you have mentioned that either shareholder can initiate a divestment 3 years after closing. So what are the likely scenarios for this exit? And how would this process be managed to protect value for both parties?

Well, again, early perhaps to speculate what the sort of options available or alternatives available at that time. There are still several years sort of ahead of us. But again, there are several alternatives, either party can sort of initiate the process. The other party can follow or stay and both in a sense, can choose to stay. So in that sense, the alternatives are there to then to sort of decide what is the best way to create value.

The next question comes from Saul Casadio from M.

Just a couple of clarification. Going back to the funding question, do you already have a sense in which market you're going to fund the newco? Is it going to be the banking market, the bond market?

Let's say, all options are on the table. So obviously, that planning is in the works at the moment. And as said by the time we are ready with the final agreements, then we will be ready with the financing plans and agreements as well. So then we'll have more to tell.

Okay. Okay. And just one clarification on the numbers. The assets that are going to be contributed in LTM numbers are generating what you call a comparable EBIT of EUR 180 million, but an operating profit of EUR 30 million. What is the delta between these 2 numbers?

Well, EUR 180 million is the comparable EBIT. Then if you are looking at, let's say, IFRS operating profit, then there are the sort of items impacting comparability in between, which have to do with the restructurings in the business.

Sorry, the operating profit is the kind of the LTM EBIT and the comparable is a pro forma for the new structure. To be honest, I'm not clear about the delta between these 2 numbers. It's quite a big delta. So I just want you to clarify that.

So here, you have EUR 180 million comparable EBIT LTM for Communication Papers and then basically, that comparable number does not include the items affecting comparability, which would then include any sort of restructuring costs or write-offs related to restructuring that have happened during that time.

Okay. Okay. And I understand that. And sorry, I think I have another couple of questions. In the liabilities, the pension liabilities of EUR 406 million that you're transferring, that's the net pension liability or is the gross number?

That is our liability in the UPM balance sheet.

Okay. Will you also transfer some pension assets? So I'm just trying to get to the net number, net liability.

Well, the liabilities, I mean that is including any assets that we have, sort of the -- sort of IFRS value and sort of pension liability and any sort of assets that there may be, they transfer with the business that they pertain to.

Okay. So that's the net -- effectively the net number, the EUR 406 million.

Yes.

Okay. And in terms of synergies, that EUR 100 million is a big number. Can you just really roughly explain the main sources for those synergies?

Sorry, can you repeat the question, please?

I mean the EUR 100 million of synergies is a big number. I just wanted to have a sense of what are the main sources where are they going to come from?

It's -- again, we can go back a little bit, but we have indicated the main items contributing to these synergies are at the bottom of this slide here, asset optimization, product range rationalization, eliminating duplications, optimization across a number of different areas. It's a significant numbers. It's also type of activities, which are not new to this business, which has been I would say, in some form of reshaping, resizing or restructuring now for almost 20 years. So there's a well defined and familiar toolbox in these cases. So that's through these actions and they become numbers.

I thank you all for your presence and for your questions. I'm mindful of time and that we are a bit over time. So once again, thank you for your participation. If there are questions which have been unanswered due to time, I invite you to reach our Investor Relations team that will provide the answer to the best of our capabilities. Thank you again. Have a nice day.

Hello, everyone. Welcome to UPM Quarter 3 2025 Results Webcast. I'm Massimo Reynaudo. I'm the CEO of UPM. And here with me today is Tapio Korpeinen, the CFO. The third quarter brought some temporary clarity to the terms of the international trade, but significant uncertainty remained, and the consumer demand stayed subdued.

Our businesses in Advanced Materials and in the Decarbonization Solutions segment improved their third quarter performance compared to the previous year. On the other hand, the Renewable Fibres, and Communication Paper businesses were impacted by the unusual volatility in their operating environment. In quarter 3, comparable EBIT was EUR 153 million, up 21% compared to the previous quarter, but down 47% compared to the last year's corresponding period. The EBIT margin was 6.7%.

During the quarter, we continued to take decisive actions to further strengthen our competitiveness. Our focus has been and is on improving performance, cash flow generation and the strength of our balance sheet. I will come back and tell you more about these actions during the presentation.

But first, let's look at the macroeconomic environment we operated in quarter 3. And let's look at Renewable Fibres to start with. As you may remember, the pulp market prices decreased during the peak of the trade uncertainty in quarter 2 and starting from China. In quarter 3, pulp sales prices remained low, impacting our quarter 3 earnings. As a positive sign though, during the quarter, the pulp demand normalized in China and hardwood pulp prices increased somewhat from the bottom.

In Finland, wood costs reached their highest level in quarter 3 when then wood market prices started eventually to show the first signs of decline. Communication Paper markets remained weak in Europe and in North America. The demand in Europe in quarter 3 was 7% lower compared to 1 year before. In the U.S., the new import tariff levels were finally set during the quarter, bringing some clarity and allowing the customers to properly plan their needs again and for us, restoring the possibility to properly plan and optimize production and shipments. Having said that, the general uncertainty continued to weigh on the business sentiment and ultimately, on the level of the demand.

Turning the page. In the advanced materials segment, the demand of labeling materials remained relatively resilient. In the adhesive materials, specifically, the demand was seasonally low, lower than quarter 2. But when we look at the full year base, the market continued to grow, even though some signs of a slowdown were visible in the U.S. The demand for plywood was stable, and I will tell you some more about this business shortly.

In Decarbonization Solutions, the market situation in general improved. When it comes to the energy business, in fact, the electricity consumption in Finland continued to be robust, and the electricity prices increased from the comparison quarters. In the same way, the prices of renewable fuels continue to recover, supported also by an improving demand.

At this point, I will hand it over to Tapio for some more analysis on our results.

Thank you, Massimo. So let's start here with our results by the business area. Fibres and Communication Papers were the business areas that reported a lower EBIT compared to last year, whereas Adhesive Materials, Specialty Papers, Plywood, Energy and Biofuels, all improved their EBIT year-on-year.

First, on Fibres. As Massimo said, pulp prices were very low in the third quarter, decreasing 11% sequentially from the second quarter or 23% from last year's third quarter. Price development resulted in a significantly lower EBIT than last year, and slightly lower EBIT compared to the second quarter.

At the cycle low prices, Fibres South, the competitive pulp platform of ours in Uruguay, reported an EBIT of EUR 80 million, which is equal to an EBIT margin of 22%. Fibres North, that is the pulp and timber operations in Finland, reported an EBIT loss of EUR 37 million in the third quarter, during which the Kaukas pulp mill was down for maintenance and for extended production curtailment and the impact of this was approximately EUR 30 million on the quarter. This means that at cycle low pulp prices and peak level of wood costs, UPM Fibres North was slightly negative in EBIT and positive in EBITDA, excluding the Kaukas shutdown.

Communication Papers deliveries were stable from the second quarter, but 13% lower than last year in the third quarter. The average paper price in euros decreased by 1% compared to the second quarter and 6% year-on-year. Fixed costs decreased in Communication Papers. EBIT decreased from last year, but improved slightly from the second quarter sequentially.

Adhesive Materials and Specialty Papers achieved increased deliveries and lower costs compared to last year. Both increased their EBIT year-on-year and showed resilient performance from the previous quarter. Plywood reported solid results with normal production now and increased deliveries. Energy had a good quarter, benefiting from increased electricity market prices and from successful production optimization in the volatile electricity market. Our average sales price for electricity increased 17% from last year or 12% from the second quarter.

And on this page, then you see our EBIT development by earnings driver. And as you can see here, the main headwind in the third quarter were the sales prices. On the left-hand side, lower sales prices impacted the third quarter results by about EUR 190 million compared with last year. Sales prices decreased most notably in Fibres and Communication Papers. Lower variable costs had a significantly smaller positive impact.

Changes in delivery volumes were neutral on group level, while deliveries increased for Pulp, Adhesive Materials, Specialty Papers, Plywood and Biofuels, there was a decrease in deliveries in Communication Papers. Fixed costs increased mainly due to the maintenance shutdown at the Kaukas mill.

On the right-hand side, sales prices had a negative impact also compared with the second quarter, mainly due to the low pulp prices. Variable costs decreased for most categories compared to the second quarter, but wood costs still increased, however, following the earlier wood market price development with the usual lag. Fixed costs decreased from the second quarter due to lower maintenance activity and also due to seasonal factors.

Then our operating cash flow was EUR 218 million in the third quarter, and our net debt decreased by EUR 92 million from the second quarter and was EUR 3.218 billion in total at the end of the quarter. Net debt-to-EBITDA ratio was 2.36x. While we see our financial standing as solid, this is somewhat above our policy limit of 2x net debt to EBITDA. And therefore, obviously, we aim to bring the net debt-to-EBITDA back to below 2x level in a timely manner. Massimo will shortly discuss the various actions we are taking to improve our profitability. In addition, we are pursuing working capital release and improving our cash conversion, working capital efficiencies to support our cash flow.

Our outlook is unchanged from the previous quarter. We expect our second half 2025 comparable EBIT to land in the range of EUR 425 million to EUR 650 million. Our fourth quarter performance is supported by the timing of the annual Energy refunds. In Communication Papers, the amount of refunds is likely to be similar or slightly smaller than last year. It is also likely that there would be a forest fair value increase in the fourth quarter, which could be of a similar magnitude or smaller than what we had last year.

Fibres performance in the short term continues to be impacted by pulp prices. In the fourth quarter, we have actually already completed in the month of October, the planned maintenance shutdown at our Fray Bentos mill in Uruguay, which will have an impact on the quarter result of similar magnitude or scale as was the case in Kaukas, about EUR 30 million. In Advanced Materials businesses and Energy, we expect resilient performance to continue.

And now I'll hand back over to Massimo for some comments on our actions and direction from here.

Good. Thank you, Tapio. Well, we continue to take decisive actions to improve our competitiveness and performance, as I said earlier. Most of our businesses have a significant organic growth potential that can be captured with targeted limited and CapEx-efficient investments. That's what we will be looking into. But finally, or in parallel, we continue to develop a portfolio of world-class businesses.

Let me illustrate now the most characterizing initiatives we are implementing segment by segment, and let's start with Communication Paper. In this business, efficient capacity utilization is critical. And in a weaker market, we plan to close down paper production at the Kaukas mill in Finland and at the Ettringen mill in Germany by the end of the year. Together, these two closures will reduce our paper capacity by 570,000 tonnes or 13% of our current capacity. This initiative will lead to a combined reduction in annual fixed cost of EUR 70 million. With these measures, we will maintain our competitiveness and the future performance. In October, we also sold the earlier closed down Plattling paper mill site in Germany, and this will contribute to Communication Paper cash flow in quarter 4.

Let's move to UPM Fibres now. Tapio has anticipated it, but given the significance of the UPM Fibres business and the distinct characteristic of the business in Finland and in Uruguay, we have decided to provide some additional transparency here. So we introduce today the notion of Fibres South to refer to our Fibres platform in South America, and Fibres North, to refer to the Fibres platform in the Nordics. As a first step, today, we indicated the EBIT level for the two parts.

Next, we will start providing additional financial information for the two parts on a regular basis starting in quarter 1 next year. But meanwhile, when it comes to Fibres South, 2025 is the first full year of production at nominal capacity for the Paso de los Toros pulp mill, and also the first full year of operating at full capacity for the supporting logistics network.

The pulp prices are very low, as Tapio mentioned earlier. But despite that, Fibres South reported an EBIT of EUR 80 million during the quarter and a margin of 22%, which is indicative of the competitiveness of this platform despite the weak market conditions.

For years on, improvements will continue. By 2027, the expanded plantation areas we have in Uruguay will increasingly reach harvesting maturity, enabling us to optimize the wood sourcing and the inbound logistics. Further, self-sufficiency will increase, and inbound transportation distance will decrease, therefore, reducing cost. To give it a scale, in the beginning of this year, 2025, we envisioned a cost reduction of some $25 to $30 per tonne compared to 2024 in Uruguay. We are well on track to achieve this this year. But we believe that, thanks to this further and ongoing optimization, we will be able to provide roughly a similar improvement by 2027, of course, all the rest remaining equal. Besides that, we will continue to pursue growth in a CapEx-efficient way through further debottlenecking.

When it comes to the other platform and in Finland, Fibres North was in a slightly negative EBIT territory in quarter 3, excluding the Kaukas shutdown. Wood costs reached their highest level in the summer before starting to decrease. Pulpwood market prices on average decreased some 5% in quarter 3 compared to quarter 2. In this situation, we took measures to adjust the Finnish pulp operations to the market situation. We took 2 months of downtime at the Kaukas mill during quarter 3. And we will take 2 weeks of downtime at the Pietarsaari mill in quarter 4. These measures will allow us to optimize our wood sourcing and avoid the most expensive wood. The benefits of these actions will be fully visible in the P&L when the purchased wood volumes will be consumed, which means during quarter 4 or the early part of next year.

Another significant action we implemented in this space is the long-term strategic partnership we agreed with Versowood, and that we've announced in September. Versowood is the largest private producer and processor of sawn timber in Finland. The deal is beneficial for both parties. For us, it will strengthen the supply of pulpwood and chips, and improve the cost efficiency of our wood sourcing.

Moving to another segment. In Advanced Materials, as we have characterized it before, our performance has been resilient. During 2025, Adhesive Materials has reduced fixed cost and streamlined its product portfolio significantly. Earlier, we announced the closure of the Kaltenkirchen factory in Germany and the relocation of the production to lower-cost locations. In quarter 3, we announced plans to discontinue the production in Nancy, in France, in order to increase further production efficiencies and competitiveness.

At the same time, and in line with the strategy communicated earlier on, we -- the business continues to seek focused growth in higher margin and higher growth areas. In this direction, go the investments announced in the U.S., in Malaysia and in Vietnam. In parallel, the business continues to build its positions on the graphic space following the recent acquisitions.

When it comes to Specialty Papers, there two efficiency measures have been implemented, aimed to reducing costs in China, and protecting the competitiveness in that area. From a commercial standpoint, the business continued to develop solutions being paper-based and alternative to plastics for the growing segment of flexible packaging end users.

And in Plywood, we initiated a strategic review to assess options for maximizing the long-term potential of the business. The review includes a range of alternative outcomes -- possible outcomes, including potential separation from UPM through a divestment, a partial demerger or an initial public offering. The aim is to determine the best path forward for the business and for the value creation for UPM shareholders. But let me spend a couple of minutes to tell you a bit more about this business.

First of all, Plywood is a very good business. It has a strong market position in the mid- to high-end market segments where it operates in Europe. And in the liquid natural gas segment, it holds a market-leading position globally. The business success is built on a number of specific strengths: A competitive premium offering generated through or from 4 spruce mills and 3 birch mills, the top-tier quality of the products manufactured there; a strong and reliable customer base; a strong brand, WISA, extensively recognized in the industry; and unmatched service capabilities, thanks to 6 warehouse hubs and some more. Thanks to that, the Plywood business has successfully provided good profitability and cash flow in all the different economic cycles of the past.

On the other hand -- and despite all of this and despite the fact the UPM Plywood business is the scale of a midsized company in Finland, it is the smallest of the UPM businesses. And as such, it competes for focus and resources with much larger businesses. For these reasons, we want to assess whether on a different setup, acting on a stand-alone base or being part of another entity, will enable even better results. Therefore, this is the rationale for the strategic review, and this review is expected to be conducted or concluded by the end of 2026.

Finally, we come to the Decarbonization Solutions. And here, we have unique solutions, all offering our customers ways to decarbonize their businesses. In Energy, we have 12 terawatt hours of CO2-free electricity, which make us the second biggest producer in Finland, consisting of reliable baseload of nuclear power and flexible supply of hydropower. This mix allow us to maximize the value on a highly volatile weather-dependent electricity market. On the other dimension of growth there, we have the capability to supply CO2-free electricity to a market where the demand is growing due to the electrification of the industrial production, heating moving away from biomass use and numerous data center-related projects and road transportation.

In Biofuels, our short-term focus has been on improving performance and getting it back to profit after a challenging 2024. Here, we have made good progresses this year. In terms of growth, we are planning CapEx-efficient debottlenecking at the Lappeenranta refinery. Simultaneously, we are proceeding with the qualification of process -- sorry, with the qualification of sustainable aviation fuels.

Last but not least, the start-up of our groundbreaking biochemical refinery in Leuna, in Germany, is proceeding. It's -- in the first of its three core processes, we have successfully achieved stability after having started production during the summer, and the production levels are now on an industrial scale. The sale of the first commercial products, which are industrial sugars and lignin-based products are expected to start during quarter 4, followed by glycol sales in the first half of 2026. In line with earlier indications, full production and positive EBIT is expected during 2027.

So -- and to sum up, the market environment during the third quarter has proved to be challenging. But in this environment, our differentiated business portfolio has ensured resilient performance. Our Advanced Materials and Decarbonization Solutions improved their performance compared to 1 year before. Fibres and Communication Papers were impacted by the unusual volatility in their business environment.

Most of the businesses have a growth profile and significant growth potential that can be captured with targeted investment and limited extra CapEx needs. This includes but does not limit to the entry in the new promising biochemicals business. So while we work to capture this potential, we continue to work on actions to improve profitability, cash flow and the strength of our balance sheet.

This ends the prepared part of the presentation, and we are ready for your questions.

[Operator Instructions] The next question comes from Ioannis Masvoulas from Morgan Stanley.

Two questions from my side. The first on UPM Fibres. You talked about the Nordic mills being EBIT negative in the quarter, even if we adjust for the Kaukas maintenance. Given this weak profitability and market backdrop, would you consider more drastic measures that could perhaps include permanent curtailments? Or are you looking to wait for a recovery in the cycle especially now that pulpwood costs have started to come down?

And then the second question related to the above. Can you give us an indication on the tailwind you expect from the lower pulpwood prices in Q4 this year and Q1 next year? And if you can also remind us on earnings sensitivities around wood price changes, that would be much appreciated.

Okay. Well, I'll pick the first part of your question, Ioannis, and leave the other part to Tapio. But let's say, as it was commented during the earlier part of this call, we had a negative EBIT in the quarter 3 in Finland. But there are a few elements to be considered there or three main elements. One is the impact of the maintenance shut, and then the additional shut we had on top of that. The other element is that wood prices were at their peak, and pulp prices were very low. Time will tell if it's a bottom, but they were surely very low. So there was a very specific coincidence of elements, all impacting the profitability.

As we have commented a number of occasions before, our Finnish operations have always been profit positive so far. And well, time will tell in the future, but we run very efficient assets. And the actions we have taken during the quarter, namely prolonging the stop of the -- in Kaukas to, let's say, avoid to buy more expensive wood, but also to improve wood availability into the next quarter, is definitely going to be benefiting the performance going forward.

The same way the agreement reached with Versowood will aim to improve on another of the critical elements about wood in Finland, which is availability. So as part of the deal, we will be providing Versowood logs and sawing capacity that is what they are interested to. We're going to be receiving more pulpwood and chips, which is what we are in demand of.

So on the base of this, we are working to maintain and improve the profitability of the current platform. And the current platform has always been delivering, let's say, performance across the cycle. So on such base, any stop or discontinuation of capacity will just have a negative impact on results. So that's why that's the plan we have been working upon.

Of course, then in the future -- situation will depend by the circumstances in the future, but we are working hard on the circumstances we control through what I said.

Maybe if I'll comment on your sort of second question. So as Massimo already pointed out, we saw pulpwood prices peaking during the summer and notable drop in the market price taking place. Having said that, it's good to note that there is a certain sort of seasonality in the sort of market prices typically for wood in Finland. So it's perhaps early to directly sort of extrapolate too much from this sort of shorter-term movement here. But then again, I would say that against the backdrop of what is happening in the Nordic markets in general, it is perhaps an indication in a sense that we have seen the kind of a peak in the trend, so to speak.

There is a lag given the sort of cycle in our sourcing of wood -- the mix of wood, including pulpwood that we need for our operations in Finland. So therefore, would not expect any material impact yet of these kinds of movements in the fourth quarter, nor really yet in the first quarter of any big way yet. Typically, there is about 6 months' time period before the sort of market price changes start to materialize in the cost of wood consumed in the pulp mills in a bigger way.

That's very clear. And sorry, just to follow up, anything you could provide on sensitivities for EBIT or EBITDA on, let's say, 10% change in wood prices?

That sensitivity, we don't have.

The next question comes from Lewis Merrick from BNP Paribas.

With the Leuna project concluding, do you expect CapEx to be lower in 2026? And can you give a rough indication of what you expect at this stage? I've just got one more follow-up.

Yes, definitely, CapEx will be lower in 2026, maybe in 2027 as well. We have commented also in the past that after a big investment cycle, now it is the time to focus on extracting the value from these investments, whether it is Paso de los Toros or Leuna. So at this point in time, we do not have any other significant project that will require CapEx on a large scale for the next couple of years.

Then when it comes to the CapEx needs for next year, we have not defined them yet. But just to give you a broad indication, our, let's say, maintenance CapEx level in normal condition is in the EUR 250 million per annum level. And then you can put a few tens of millions for potentially, let's say, efficiency improvement, margin enhancement initiatives on top of that. That would be broadly speaking, the scale going forward. But for more accurate indications, you need to wait, the beginning of next year.

No, that's crystal clear. And just on bridging items into Q4 to sort of reach or surpass your H2 guidance. You mentioned the forestry rebounds similar to prior. Can you just put some numbers to that? And then similarly on the Energy refunds and any other sort of moving parts from Q3 into Q4?

Well, if I take that, so as mentioned, basically, this forest value change for assets here in Finland, primarily then last year, we had a bit more than EUR 100 million. And as I said, we obviously then we'll see the exact figure as we sort of run the numbers during the remaining months of the year, remaining quarter. But anyway, at the scale or below what we had last year would be likely outcome from that. And well, Energy refunds, again, a bit similar, let's say, comparison there that we have had this Energy refunds in the fourth quarter of the Communication Papers as we did last year as well and this year, likely to land slightly below of the level of last year.

And just any other items to call out?

Nothing else other than I pointed out that we have the maintenance shutdown that was planned and actually has been completed as planned in our Fray Bentos mill in Uruguay, and that was done in the month of October now.

The next question comes from Linus Larsson from SEB.

Maybe a follow-up on the previous question on the Q4. Q3 bridge on Fibres specifically, what's the aggregate impact of maintenance and market-related downtime in the fourth compared to the third quarter? Is that pretty much the same? Is it easing? Or is it worsening in your opinion?

Well, as I said, similar in a sense that the Fray Bentos shutdown is about, let's say, same scale, EUR 30 million as what we had from the Kaukas shutdown in the third quarter.

Sure. But if you add to that, the market-related downtime at Kaukas and [ Bentos ], respectively, is it pretty much the same, Q4 as in Q3 altogether?

Nothing to add.

Okay. And then moving on to Biofuels. I didn't see you disclosing the split of other operations. Maybe you did, and I missed it. But could you maybe help us pinpointing Biofuels EBIT in the third quarter? And maybe if you have any guidance on the fourth quarter as to where Biofuels may end up?

Well, let's say, what we did point out when commenting on the second quarter result was that we had a breakeven result. As far as Biofuels is concerned during the quarter, from our own kind of actions from the cost and efficiency volumes side and, let's say, modest support from the market, and we continued at the same level of profitability now in the third quarter, breakeven. And let's say, again, working on our own efficiencies and, let's say, as you perhaps have seen market prices recovering in the biofuels market and, let's say, short-term sort of market situation tightening. So we would expect some support from there. Obviously, then not happy at that level as such. So look to improve further into next year. And again, one factor that will impact demand, especially for the kind of advanced biofuels that we are producing is the country-level implementation of the RED III directive.

Excellent. That's very helpful. And then maybe one final question, and we touched upon it already in the call. But when it comes to Fibres operations in Finland, you made a loss of EUR 37 million. To what extent did you have support, help included in that negative EUR 37 million from positive revaluations?

There are no revaluations in the Fibres North because as perhaps you remember, the Finnish forests are included in our other segment in terms of our reporting segments.

The next question comes from Robin Santavirta from DNB Carnegie.

Two a bit more technical questions from me. First of all, in terms of the revaluation of the Finnish forest assets, which you booked in the other operations, it looks like they will be quite sizable again this year. I guess the gross impact will be more than EUR 150 million on an annual basis in 2025. And I understand there's three components here: there's interest rates, there's net growth and then the price of wood raw material. And the key point now probably is the higher wood raw material prices that is supporting materially the adjusted EBIT and the forest revaluation '25 as it did in '24.

And going into '26, a bit color would be appreciated to understand how you look at the forest revaluation of the Finnish because now we have the pricing coming down quite clearly. So could the -- should we expect the revaluation gain to be much smaller? A bit smaller? Same level? Any color on that would be appreciated.

Yes. Well, of course, let's say, time will tell. And of course, also you have to kind of remember in a sense that on one hand, the result and the value of our forest has been supported by the price increase here in Finland. But obviously, it has been a headwind for our pulp mills and sawmills here in Finland. Now if that kind of tide turns, it will work the other way around. So perhaps then the result, obviously, because everything is done in a market price basis for the forest operation, then will be impacted if market price is lower for wood, but then it's for the benefit of the sawmills and the pulp mills here in Finland. So obviously, that's how it works in our business model.

On the price impact, of course, again, it is correct to consider in a sense what is happening in the wood market in the short term when setting the price expectations in the valuation model. But then, of course, what we have in there, to begin with, is a sort of management view on kind of the longer-term trend since we are running the valuation model for multiple decades here. So in that sense, there is a kind of level change as such, but the assumption in terms of what is the direction of sort of wood price in our model then otherwise, is kind of assessed separately, meaning that if wood price goes up, it doesn't mean that we assume that it goes up from here to eternity and vice versa.

So there will be some change, obviously, then if this trend sort of starts to go to the other direction, but perhaps not as dramatic as one might think. Then as you said, the sort of other factors, the growth in the forest vis-a-vis harvest levels, interest rates will sort of play a role as well and early to sort of anticipate anything there.

Yes, the reason -- I obviously understand that what you lose there on price of wood, you gain in the industrial operations that I appreciate. It's just that it's quite sizable, more than EUR 150 million positive. And then if it would only be, say, EUR 50 million positive or EUR 25 million positive in 2026, it's a quite big delta. So -- but perhaps we get a bit more color as well when you guide then for next year.

And the other question I have is related to Leuna. And again, a technical question. So I'm just -- I keep pushing on the depreciation estimate because it's still EUR 1 billion investment, so quite sizable depreciation. I can only see in the other segments, low depreciations, even lower than last year. So is this something that we should expect now as of Q4? Or is it as of next year? And any color on the size of those?

Well, basically, when we start -- I mean, whether it's this plant or pulp or otherwise, when we have finished an investment project, we start commissioning and eventually, when we start to have deliveries to customers, then the depreciation starts. So not meaningful this year yet, but we will then start in the beginning of next year when -- now the customer deliveries are starting to take place.

Tapio, can I just try? Is it EUR 40 million a year or something in lines of that -- the line depreciation?

In that scale, yes.

The next question comes from Andreas Castanos Möller from Berenberg.

My first question is on the strategic partnership with Versowood. It sounds very promising because you're putting together the largest pulpwood consumer with one of the largest solo consumers. So financially, what do you expect to get in terms of synergies? What do you think is a reasonable assumption here? And then also operationally, can you help me visualize how and why the synergies are generated?

Well, I risk here to repeat myself a little bit. But when it comes to the financials, we don't disclose them. But when it comes to how the benefits will materialize, is in this exchange of things which, one is in excess, and the other is in need of. It's what I was saying before, thanks to this deal, which, by the way, is subject to merger control authorities and still needs approval just to line things properly down.

But should that happen, we will be having access to more wood chips and pulpwood. And to remember the importance of that, we have quoted it a number of times, the situation in Finland to be made challenging for pulp making. Because of wood prices, but also prices don't solve the problem of insufficient wood available. So through this deal, we will have more access to something which is key and critical for our operations. So that is the value that comes from this deal. Yes. So beyond the numbers, I don't know if I have answered your question.

It is helpful. Can I ask a couple of more clarifications, please? Did you say that the time for the end of the review -- strategic review for plywood was '26, end of '26. Did I get that right? And also...

Yes.

Okay, clear. And then the other one is for Leuna, right? You mentioned industrial sugars. And I was wondering if industrial sugars is a product that you would aim to sell in the future? Or this is something that you're just selling temporarily as you are not finalized the whole process to generate [ alcohols ]?

Yes. It's a very good question, and it's a very good observation as well. This is most of an intermediate product that we are getting, which has some market value. But the full value capture, imagine in the business case, will come when the plant will be in full operation, and these intermediate products will be turned into [ Finnish ] products being either functional fillers or glycols or products in this family. So there is some value in this, but the full value capture -- and we'll start to capture it, to be clear, by the end of this year, but the full value capture will start with the plant in full operation.

The next question comes from Cole Hathorn from Jefferies.

I'd just like to start with Communication Paper and Specialty Paper. I'd just like to understand the key deltas into 2026. If you were to talk about what could be the positives into 2026, could you talk me through the moving parts of how you see it? If I think about Communication Papers, it's the EUR 70 million fixed cost savings from capacity closures. In Specialty Paper, I'm just wondering how you see that market considering Asia fine paper is quite challenging. And the release liner and labels businesses, there seems to be some smaller players out there are challenging. So I'm just wondering what are the moving parts into 2026 that you see?

Okay. Well, let me try to answer the question, but let me separate it in two because the two businesses are pretty different profiles. So if we start with Communication Paper first. Well, one element is represented by the market. And we don't know what will be the level of the market demand next year. Nobody knows it. But in this market demand has declined for the last 20 years. So we can expect the decline continuing next year. That, as a negative, if you want.

At the same time, the market this year or in the first part of this year has been heavily disrupted by the uncertainty that came as a consequence of the trade war. Let's not forget, there's been significant uncertainty, for example, in the U.S. around whether there were tariffs, who was hit by the tariffs, the amount of the tariffs, when they would apply and so on. That has made extremely difficult for the players there to proper plan ahead and that had impact across the entire value chain.

And last but not least, again, in quarter 2, the demand of certain type of grades in the U.S. dropped down significantly during the period of the strongest sanctions between U.S. and China because imports from China were basically stopped and catalogs were not printed and so on and so forth.

So what I'm just trying to say is that if we want to compare 2026 to 2025, which I believe is what you are kind of trying to get some color about, it's probably fair to assume a demand decline, but it's also probably fair to assume, at least if things stay as they are right now, some stabilization of the flow of the products, which will allow the industry to operate in a better way because operational efficiency here is important. This is about talking about the market.

When we talk about ourselves, yes, you pointed it up. The actions we are taking and reducing capacity significantly, 13% of our capacity will deliver direct fixed cost, saving improvement, but also indirect benefit from improved operating rate. So -- so yes, those are some elements to consider for Com Paper.

When it comes to Specialty Paper, yes, the situation in China is -- I wouldn't know how to characterize it, but surely, the demand for those products not being as strong leads to some pressure. As for how this will play into next year, it is way too soon to try to extrapolate. A lot will depend by the downstream of businesses and ultimately, how consumer demand will evolve. It has been pretty muted during quarter 3, as we have indicated. But let's see and maybe let's also see in quarter 4, which is typically a seasonality quarter for that business that will give us a better sense and feel about the trend we will enter into next year with.

And then just on the Specialty, kind of the release liners and the label side, there have been some smaller players that have been under pressure. I'm just wondering how your business is positioned into 2026 as a larger producer.

Well, I think I commented on the fact of the muted demand during quarter 3, and that clearly create a pressure, then the rest depends on your competitiveness. We run large assets, well maintained. And I would say that also through the results that you can see, we have been performing pretty well in a challenging market. So then 2026, we will see later on. But in the current situation, I think we are holding up pretty well with the pressure.

And then just one final clarification. You mentioned some reduction in the Uruguay platform on the cost as you continue to ramp up the efficiencies. I think you gave a number. I just misheard that earlier. I wonder if you could just repeat that.

Sure, sure. I'll give you the precise number, but basically, the scale I gave for the savings is still to be captured. Let's say, directionally in the next couple of years, is probably USD 25 million to USD 30 million -- sorry, sorry, USD 25 to USD 30 per tonne. Okay. USD 25 to USD 30 per tonne, which is the same scale of the savings we are capturing this year, 2025 versus 2024.

The next question comes from Joni Sandvall from Nordea.

A couple of quick questions. Tapio, you mentioned the working capital release, or you are aiming to release working capital. So what should we expect in Q4? And does Leuna ramp-up has any impact here?

Well, yes, of course, the ramp-up of new production does have some impact or has had some impact, I would say, already during the year as we have been preparing. But still, let's say, typically, we do release cash from working capital at the end of the year. Don't have a number to give guidance on that, but I would expect that we will see that this year kind of seasonally as well. And on top of that, we are obviously looking to improve our efficiencies otherwise.

Okay. And second question relates to Biofuels. It has been some while when you put the SAF application in. So can you give any update on that when you are expecting to receive the approval for the SAF?

Well, actually, it's a long process, and it's not under our control. That is what makes difficult to make a prediction about that. But we filed it last year. So let's see what happens next year. I wouldn't go any further than that because of what I said, it's outside our control.

Okay. Okay. But your product has been tested, so any early indications of those?

Absolutely, absolutely. It has been tested, has been even utilized in a pilot case, not blended, but pure. So we have all the confidence that the product will go through the process. But then there are a number of, I don't know what to call them, administrative steps that need to go through before that the process is concluded.

But we -- you can imagine this is a priority for us. This will open up beside the biofuel or fuel for ground transportation will open up the sustainable aviation market, which is not only getting bigger in the future, but will give further opportunity to diversify and maximize profitability. So it's surely something which we treat with the highest priority.

Okay. Very good. We have also used the time planned for this call. So I take the opportunity again to thank everybody for your participation and in the case for your questions. And see you sometime during the next quarterly call, if not before. Cheers, have a nice day.