Q2 2026 Metsa Board Oyj Earnings Call

August 6, 2026

Speaker #1: Good afternoon, everyone, and thanks for joining us for Metsä Board's half-year results. My name is Katri Sundström. I'm responsible for Metsä Board's investor relations.

Katri Sundström: Good afternoon, everyone, and thanks for joining us for Metsä Board's H1 results. My name is Katri Sundström. I am responsible for Metsä Board's investor relations. With me, I have Esa Kaikkonen, our CEO, and Anssi Tammilehto, our CFO, who will be presenting the results today. At the very end, we open the lines for you for your questions. Remember that you can also send questions via the chat function, which I will then present to Esa and Anssi in here. Before we get into the results, a quick reminder that today's presentation includes forward-looking statements and the usual disclaimer applies. With that, I hand over to Esa.

Speaker #1: With me, I have Esa Kaikkonen, our CEO, and Anssi Tammilehto, our CFO, who will be presenting the results today. At the very end, we will open the lines for your questions.

Speaker #1: Remember that you can also send questions via the chat function, which I will then present to Esa and Anssi in here. Before we get into the results, a quick reminder that today's presentation includes forward-looking statements, and the usual disclaimer applies.

Speaker #1: With that, I hand over to Esa.

Speaker #2: Thanks, Kati. And good afternoon, everyone. Let me first give you the headlines. We are improving. We are getting sharper about where we focus. On the areas where we can really add value— that's what our strategy, Lead the Pack, is all about.

Esa Kaikkonen: Thanks, Katri. Good afternoon, everyone. Let me first give you the headlines. We are improving. We are getting sharper about where we focus on the areas where we can really add value. That is what our strategy, Lead the Pack, is all about. We believe that the best way to strengthen our competitive position is through service, innovation, and customer proximity. Profitability improved during the period, although further improvement and the Husum turnaround remain the key priorities for us. I am also pleased to see that our market share in European folding boxboard increased, giving us a positive momentum, and we move into the H2 of the year. What actually happened in the quarter? In short, stronger volumes and better profitability. Our comparable operating results swung back into the black, reaching EUR 3 million.

Speaker #2: We believe that the best way to strengthen our competitive position is through service innovation and customer proximity. Profitability improved during the period, although further improvement and the Husum turnaround remain key priorities for us.

Speaker #2: I'm also pleased to see that our market share in European folding boxboard increased, giving us positive momentum as we move into the second half of the year.

Speaker #2: So what actually happened in the quarter? In short, stronger volumes and better profitability. I'll comparable operating results swung back into the black reaching 3 million perspective, we lost 23 million euros this time last year, and 11 million euros in the first quarter.

Esa Kaikkonen: To put that into perspective, we lost EUR 23 million this time last year and EUR 11 million in the Q1. That is a quiet turnaround. We saw the same positive trend in the EBITDA. Paperboard deliveries increased from the Q1, and pricing started to move in the right direction towards the end of the period. The transformation program also continued to deliver as we have now reached an EBITDA run rate of EUR 135 million. Together with the positive cash flow, that is a good sign that the work we are doing is having a real impact. There were still challenges, of course. Husum remained loss-making, pulp markets stayed weak, and then the Iran conflict added pressure to logistics costs. All in all, the direction is clearly the right one, and that is encouraging for the whole Metsä team.

Speaker #2: So, that's a quiet turnaround. We saw the same positive trend in the euros, EBITDA, and paperboard deliveries. To put that into context, these increased from the first quarter, and pricing started to move in the right direction towards the end of the period.

Speaker #2: The transformation program also continued to deliver, as we have now reached an EBITDA run rate of €135 million. Together with the positive cash flow, that's a good sign that what we are doing is having a real impact.

Speaker #2: We're still challenges, of course. Husum remained loss-making bulk market stayed weak and then the Iran conflict added pressure to logistics costs. But all in all, the direction is clearly the right one and that's encouraging for the whole Metsa team.

Speaker #2: Let me then take you through the businesses, starting with the consumer packaging, our largest business area that amounted to 54% of the whole business of Metsa Board.

Esa Kaikkonen: Let me take you through the businesses, starting with the Consumer Packaging, our largest business area that amounted to 54% of the whole business of Metsä Board. Here, we saw demand continue to improve in the Q2. Deliveries increased from Q1, particularly in Europe, and our market share in European folding boxboard also increased as we have been trying to increase it. Year on year, volumes were still lower, mainly due to the softer demand in Americas, but order inflow strengthened and pricing improved towards the end of the Q2. The Retail Packaging, which accounts for around one-third of the sales. Volumes were up 8% year on year, driven by strong demand in Europe, particularly during the Q2. We also saw order inflow strengthening and pricing start to move in the right direction towards the end of the period.

Speaker #2: Here we saw demand continue to improve in the second quarter, deliveries increased from Q1, particularly in Europe, and our market share in European folding box board also increased.

Speaker #2: Increased as we have been trying to increase it. Year on year, volumes were still lower, mainly due to the softer demand in Americas, but order inflow strengthened and pricing improved towards the end of the quarter.

Speaker #2: Then the retail packaging, which accounts for around one-third of the sales. Volumes were up 8% year on year, driven by strong demand in Europe, particularly during the second quarter.

Speaker #2: We also saw order inflow strengthening and pricing start to move in the right direction towards the end of the period. So overall, white graph liner, the continued to perform well and provided a good support for our results during the quarter.

Esa Kaikkonen: Overall, White Kraftliner continued to perform well and provided a good support for our results during the Q2. Pulp was the tough one, accounting 12% of the whole turnover. Demand in both Europe and China remained soft, and Metsä Fibre's Joutseno mill remained shut throughout the Q2. At the same time, producers across Europe have been taking a lot of downtime and curtailing production. We'll have to see if that's enough to improve market condition later this year. As a result, our own, as well as Metsä Fibre's pulp delivery volumes remained below last year's levels. Now Anssi is going to take you into the numbers a bit more in detail. Anssi, over to you.

Speaker #2: But what was the tough one? Accounting 12% of the whole turnover. Demand in both Europe and China remained soft and Metsa fibers remained shut throughout the quarter.

Speaker #2: At the same time, producers across Europe have been taking a lot of downtime and curtailing production. We'll have to see is that enough to improve market condition later this year.

Speaker #2: a result, our own as well as Metsa fibers bulk delivery volumes remains below last year's levels. But now, Anssi is going to take you into the As numbers a bit more in detail.

Speaker #2: Anssi, over to you.

Speaker #3: Thank you. Good afternoon also from my behalf. So let's take a closer look at the first half sales and profitability. So as mentioned in sales, we were down from 25 levels when the market environment really started to change.

Anssi Tammilehto: Thank you. Good afternoon also from my behalf. Let's take a closer look at the H1 sales and profitability. As mentioned in sales, we were down from 2025 levels when the market environment really started to change, and the decrease has mainly come from sales volumes, but also from prices and foreign exchange rate. Seasonally, Q2 is typically stronger, but we also witnessed a strengthening order book towards the end of the Q2 or already in the Q2, and also the price increases started to show in the late Q2. We were able to push the comparable operating profit to the positive territory in the Q2, and this really underlines the successful execution of the transformation program. This is really a key ingredient in this whole turnaround. Of course, the commercial operations and actions around that play an important role in this turnaround.

Speaker #3: And the decrease has mainly come from sales volumes, but also from prices and foreign exchange rate. Seasonally, Q2 is typically stronger, but we also witnessed a strengthening order book towards the end of the quarter or already in the second quarter.

Speaker #3: And also the price increase started to show in the late Q2. We were able to push the comparable operating profit to the positive territory.

Speaker #3: In the second quarter, and this really underlines the successful execution of the transformation program. So this is really a key ingredient in this whole turnaround.

Speaker #3: Of course, the commercial operations and actions around that play an important role in this turnaround. And please remember that this was all done despite the increased cost pressure due to the war in the Middle East and this had an impact on Q2 numbers as expected.

Anssi Tammilehto: Please remember that this was all done despite the increased cost pressure due to the war in Middle East, and this had an impact on Q2 numbers as expected. To the result bridge H1 year over year. If we take a first look at the volume, slight decrease in that one, but also related to the market, the price and FX, that was in a way significant in this sense. We already saw that the FBB volumes were down by 61 KT and kraftliner volumes up then again by 20 KT. Market pulp then again down, and the net impact is there. Really the three first columns are a sign of the market. When it comes to our own performance, we were able to squeeze on the variable costs.

Speaker #3: Then to the result bridge first half year over year, if we then take a first look at the volume, slight decrease in that one.

Speaker #3: In that one, but also related to the market, the price and effects that was the, in a way, significant in this sense. We already saw that the FPB volumes were down by 61 KT and liner board volumes up, then again by 20 KT, market bulk, then again down.

Speaker #3: And the net impact is there, but really the three first columns are a sign of the market. Then when it comes to our own performance, we were able to squeeze on the variable costs, this is a very good achievement by the whole team.

Anssi Tammilehto: This is a very good achievement by the whole team and visible now in the results. We have clearly been able to find more efficient ways how to operate the mills, how to basically operate the supply chain. The second column, the fixed costs bar, that's a substantial one. This comes from various sources, personnel costs, less services being spent, less spend overall. Also good to note that the impact of Tako closure is also there in the H1 comparison. Last but not least, Metsä Fibre, our share of that had a negative impact, and we land at minus EUR 8 million for the H1. Looking at Q2 versus Q2 last year, we can see that especially production volumes play a big role in this one.

Speaker #3: And visible now in the results. So we have clearly been able to find more efficient ways how to operate the mills, how to basically operate the supply chain.

Speaker #3: And the second column, the fixed costs bar, that's a substantial one. And this comes from various sources, personnel costs, less services being spent, less spend overall, but also good to note that the impact of taco closure is also there in the first half.

Speaker #3: Comparison. And then last but not least, Metsa fiber, our share of that had a negative impact of 8, sorry, negative impact and then we land at minus 8 million euros for the first at Q2 versus Q2 last year, we can see that especially production volumes play a big role in this one.

Speaker #3: We were able to increase the production rates which then has an impact on us absorbing more costs into the inventory, which is then visible in that bar.

Anssi Tammilehto: We were able to increase the production rates, which has an impact on us absorbing more costs into the inventory, which is visible in that bar. As mentioned, price and FX had a negative impact, also in this comparison, you can see clearly the variable costs and fixed costs playing a big role. Taking a quarter-to-quarter comparison, I think the picture is interesting in that sense that we were able to increase our sales volumes, and as mentioned seasonally, Q2 is typically stronger, but also a stronger order book plays a big role in that one. Price impact flat from Q1, FX flat. Variable cost, once again, more savings, seasonally fixed costs typically are higher in Q2. Now we had maintenance activities and also, for example, summer workers are visible there.

Speaker #3: Then as mentioned, price and effects had a negative impact, but then also in this comparison you can see clearly the variable costs and fixed costs playing a big role.

Speaker #3: If we then take a quarter-to-quarter comparison, I think the picture is interesting in the sense that we were able to increase our sales volumes. And as mentioned, seasonally Q2 is typically stronger, but also a stronger order book plays a big role in that one.

Speaker #3: Price impact flat from Q1, effects flat, variable cost once again more savings. But then seasonally fixed costs typically are higher in Q2 and now we had maintenance activities and also for example, summer workers are visible there.

Speaker #3: And then we landed in the plus 3.1 million euros. So happy to see us back into the black and of course work continues. And a bit on that, how do we continue?

Anssi Tammilehto: We landed in the plus EUR 3.1 million. Happy to see us back into the black and, of course, work continues. A bit on that, how do we continue? The transformation program is actually going very well. It's going as planned. Maybe highlighting still the first row, taking into account the cash release. We were able to have a positive cash flow in Q2, a sign of good turnaround, both in EBITDA but also strict capital discipline in our net working capital side of things. We can be more efficient, and I think there's more to come. We continue to focus on our procurement, the mill productivity, and the commercial actions, including also the growth in the preferred segments where we want to grow.

Speaker #3: The transformation program is actually going very well. It's going as planned. Maybe highlighting still the first row taking into account the cash release. So we were able to have a positive cash flow in the second quarter and that is of course a sign of good turnaround both in EBITDA but also strict capital discipline in our working capital side of things.

Speaker #3: So we can be more efficient and I think there's more to come. Of course, we then continue to focus on our procurement. The mill productivity and then of course the commercial actions including also the growth in the preferred segments where we want to grow.

Speaker #3: And this is also a key ingredient in the strategy of Metsa board. So as I mentioned, 135 million run rate improvement by end of Q2.

Anssi Tammilehto: This is also a key ingredient in the strategy of Metsä Board. As I mentioned, EUR 135 million run rate improvement by end of Q2. Here in this slide, you can see the trajectory. Happy to say that, of course, after four quarters out of 10, this is already a good achievement, we need to pay attention to the upcoming quarters so that we really meet the targets, and I don't doubt it at all. Already EUR 45 million cumulative impact in the P&L, which I think is a good achievement. Very good work in that sense and strong progress. Cash flow, also very pleased to see that returning back into the black. This is of course supported, as I mentioned, by the improved EBITDA level, also managing the net working capital tightly.

Speaker #3: And here in this slide you can see the trajectory. And happy to say that of course after four quarters out of 10, this is already a good achievement.

Speaker #3: But we need to pay attention to the upcoming quarters so that we really meet the targets and I don't doubt it at all. Already 45 million cumulative impact in the P&L.

Speaker #3: Which I think is a good achievement. So very good work in that sense and strong progress. Cash flow. Also very pleased to see that returning back into the black.

Speaker #3: And this is of course supported as I mentioned by the improved EBITDA level, but also managing the working capital tightly. And as you can see from the history, this is not something that we have seen that much.

Anssi Tammilehto: As you can see from the history, this is not something that we have seen that much. I think it is very good that we now have been able to squeeze ourselves into the positive territory also in cash flow, including free cash flow, which was at EUR +5 due to quite low investment levels. Esa will talk a bit later on the investments in general. Capital discipline remains a high priority for the company also going forward, and I think this is something that the whole company understands. What does this mean from our balance sheet point of view? If we look at the financial position after Q2, the liquidity remains strong at EUR 547 million. The noteworthy topic in this slide is that we were able to secure a refinancing of the EUR 250 million bond that was maturing in 2027.

Speaker #3: So I think it's very good that we now have been able to squeeze ourselves into the positive territory also in cash flow including free cash flow which was at positive 5 due to quite low investments levels.

Speaker #3: And as I will talk a bit later on the investments in general. Capital discipline remains a high priority for the company. Also going forward.

Speaker #3: And I think this is something that the whole company understands. What does this then mean from our balance sheet point of view? If we look at the financial position after the second quarter, the liquidity remains strong at 547 million euros.

Speaker #3: The noteworthy topic in this slide is that we were able to secure a refinancing of the 250 million euro bond that was maturing in 2027.

Speaker #3: So we took the bridge facility in 2027 and this is something that gives us flexibility in our financing needs also going forward. And we are then able to enjoy a good margin level still through the bond maturity.

Anssi Tammilehto: We took the bridge facility in 2027, and this is something that gives us flexibility in our financing needs also going forward. We are then able to enjoy a good margin level still through the bond maturity. That is a good achievement in Q2. The net debt stood at EUR 341, same level as end of Q1. Leverage elevated still to the weak last 12 months EBITDA. No change in the investment grade rating by the agencies Moody's and S&P. With these words, handing back to Esa, please.

Speaker #3: So that's a good achievement in second quarter. The net debt to that 341. So same level as end of Q1. Leverage elevated still to the week last 12 months EBITDA.

Speaker #3: And no change in the investment grade rating by the agency's Moody's and Essen B. With these words, handing back to Esa, please.

Speaker #2: Thanks, Hansi. A quick word on investments, because this is a real shift for us. The big spending phase is now behind us, as we have been pointing out earlier as well.

Esa Kaikkonen: Thanks, Anssi. A quick word on investments, because this is a real shift for us. The big spending phase is now behind us, as we have been pointing out earlier as well. Investments were just EUR 25 million in H1. Looking ahead, we expect annual CapEx to stay clearly below EUR 100 million, with around half of that being maintenance CapEx. That frees up cash in the future as well. We have been showing this slide also earlier, this is a Husum special slide in that sense, saying that Husum profitability is currently being weighted down by a challenging operating environment, while the mill remains highly sensitive to market movements. At the same time, Husum is a key focus area within our transformation program. We see a clear potential to improve both cost competitiveness and performance over time.

Speaker #2: Investment were just 25 million euros in the first half and looking ahead, we expect annual capex to stay clearly below 100 million euros. With around half of that being maintenance capex.

Speaker #2: That frees up a cash in the future as well. Then we have been showing this slide also earlier. And this is an Husum's special slide in that sense.

Speaker #2: And saying that Husum's profitability is currently being weighted down by a challenging operating environment while the mill remains highly sensitive to market movements. At the same time, Husum is a key focus area within our transformation program, which is a clear potential to improve both cost competitiveness and performance over time.

Speaker #2: That's why Husum remains one of those most important drivers of future profitability improvement and focus areas for the management as well. We have stated clearly that windshot and investment and acquisition that we did in the Netherlands was one of those elements that we were launching this year.

Esa Kaikkonen: That is why Husum remains one of those most important drivers of future profitability improvement and focus areas for the management as well. We have stated clearly that the Windschoten investment and acquisition that we did in the Netherlands was one of those elements that we were launching this year. Looking ahead, near-term outlook. I would say that overall picture is improving, but operating environment remains still mixed. In paperboard, we are seeing encouraging signs, as we stated earlier as well by Anssi and myself. Demand and pricing improved towards the end of H1, which should support the market environment in H2 as well. Pulp remains a different story, though. Demand is still soft in both Europe and China.

Speaker #2: Then looking ahead, near-term outlook. I'd say that overall picture is improving, but operating environment remains still mixed. In a paper board, we are seeing encouraging signs as we stated earlier as well by Hansi and myself.

Speaker #2: Demand and pricing improved towards the end of the first half, which should support the market environment in NH2 as well. Pulp remains a different story though.

Speaker #2: Demand is still soft in both Europe and China. And while a lot of capacity has been taken out from the market throughout curtailments, and downtime earlier this year and last year, it is still too early to say whether that will be an enough to improve the market balance going forward in the latter part, in the latter part of this year.

Esa Kaikkonen: While a lot of capacity has been taken out from the market through curtailments and downtime earlier this year and last year, it is still too early to say whether that will be enough to improve the market balance going forward in the latter part of this year. Iran conflict continues to drive volatility also in the logistics, energy, and raw material costs, although commercial actions have helped offset part of that impact already in the last quarter. For Metsä Board, cash generation remains a key priority, as we have explained earlier as well. We expect paperboard deliveries to remain broadly stable while the transformation program continues to improve our cost competitiveness and support profitability.

Speaker #2: And then the Iran conflict continues to drive volatility, also in logistics, energy, and raw material costs. Although commercial actions have helped offset part of that impact already in the last quarter.

Speaker #2: For Metsa board, gas generation remains a key priority as we have explained earlier as well. We expect paper board deliveries to remain broadly stable while the transformation program continues to improve our cost competitiveness support profitability.

Speaker #2: That said, Q3 will be significantly affected by the long Husum shutdown. In addition, Metsä Fibre’s result is negative due to the extensive maintenance activity and continued low pulp production utilization rates, due to the weak pulp market.

Esa Kaikkonen: That said, Q3 will be significantly affected by the long Husum shutdown, and in addition, Metsä Fibre's result contribution expected to remain negative due to the extensive maintenance activity and continued low pulp production utilization rates due to the weak pulp market. This is important to understand. Moving on the strategy as well a bit, I'd like to spend a moment on this slide. Strategy only matters if the progress can be measured, and these KPIs, as we have been doing this on the quarterly reports as well, are how we'll track the progress going forward. They cover our four pillars of the strategy: safe, shift, scale, and streamline. Some of these metrics move slowly, others much faster. Together, they give us a clear picture whether we are heading in the right direction. I'm particularly encouraged by this progress we are seeing in streamline.

Speaker #2: So this is important to understand. And then moving on the strategy as well a bit, I'd like to spend a moment on this slide.

Speaker #2: Strategy only matters if the progress can be measured. And these KPIs, as we have been putting these on the quarterly reports as well, are how we'll track the progress going forward.

Speaker #2: They cover our four pillars of the strategy. Safe shift scale and streamline. Some of these metrics move slowly. Others much faster. But together they give us a clear picture whether we are heading in the right direction.

Speaker #2: What I'm particularly encouraged by this progress, we are seeing in streamline, the transformation program has already reached an EBITDA run rate of 130 million euros as was explained by Hansi.

Esa Kaikkonen: The transformation program has already reached an EBITDA run rate of EUR 130 million, as was explained by Anssi. We also made good progress in working capital management and cash generation. These metrics help us stay focused, but just as importantly, they help our stakeholders assess whether Lead the Pack is delivering the results we set out to achieve. One of the key ideas behind the strategy is that we don't compete on volume alone. We compete through service, innovation, and close customer collaboration. Investments such as in Windschoten that I was explaining earlier, the extra sheeting capacity that we have been acquiring, and our Milan design studio strengthen our customer offering and help building long-term growth in our core markets, Europe and North America. I'm pleased to see that this is translating into the results as well.

Speaker #2: And we've also made a good progress in working capital management and gas generation. These metrics help us stay focused and but just as importantly, they help us help our stakeholders assess whether lead the pack is delivering the results we set out to achieve.

Speaker #2: So one of the key ideas behind the strategy is that we don't compete on volume alone. We compete through service innovation and close customer collaboration.

Speaker #2: Investments such as an windshot tend that I was explaining earlier, this seating capacity, extra seating capacity that we have been acquiring, and our Milan design studio strengthen our customer offering and help building long-term growth in our core markets.

Speaker #2: Europe and North America. I'm pleased to see that this is translating into the results as well. During the first half of the year, we gained market share in the European folding box board while pricing also started to improve.

Esa Kaikkonen: During H1, we gained market share in the European folding boxboard, while pricing also started to improve. Clear evidence of strategy working as well. If I leave you with the three messages today, first, improving market conditions translated into higher volumes and better profitability. Good sign. Second, our transformation program is delivering tangible results that everything in there is in our own hands. Third, while we are moving in the right direction, the work is far from done, so we will be continuing this. This will be a continuous journey, continuous improvement. Our priorities forward remain clear: cash flow, improving Husum's performance, and disciplined execution of our strategy. That's the picture from us today. Thanks for listening, and with that, we are very happy to take your questions. Thank you very much.

Speaker #2: So, clear evidence as well. So, if I leave you with three messages today: first, improving market conditions translated into higher volumes and better profitability.

Speaker #2: Good sign. Second, our transformation program is delivering tangible results that everything in there is in our own hands. And third, while we are moving in the right direction, the work is far from done.

Speaker #2: So we will be continuing this. This will be a continuous journey—continuous improvement. Our priorities going forward remain clear: cash flow, improving Husum's performance, and disciplined execution of our strategy.

Speaker #2: That's the picture from us today. Thanks for listening and with that, we are very happy to take your questions. Thank you very much.

Speaker #1: If you wish to ask a question, please dial Pound Key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial Pound Key 6 on your telephone keypad.

Operator 2: If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Linus Larsson from SEB. Please go ahead.

Operator: If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Linus Larsson from SEB. Please go ahead.

Speaker #1: The next question comes from Linus Larson from SEB. Please go ahead.

Speaker #3: Good day, Jen. Many thanks for taking my question. I'm encouraged to hear you talking about improving market conditions. However, just in the very short term, coming back to Husum and how to think around that particularly in the third quarter, Husum is loss making as is and now we are going to see a maintenance shutdown and in addition to that, if I understand you're right, additional market related downtime.

Linus Larsson: Good day, Jens. Many thanks for taking my question. I am encouraged to hear you talking about improving market conditions. However, just in the very short term, coming back to Husum and how to think around that, particularly in Q3, Husum is loss-making, as is, and now we are going to see a maintenance shutdown and in addition to that, if I understand you right, additional market-related downtime. How severe will that be in terms of a P&L impact in Q3, and to what extent can that be balanced by other factors, please?

Speaker #3: So, how severe will that be in terms of P&L impact in the third quarter, and to what extent can that be balanced by other factors?

Speaker #3: Please.

Speaker #2: Well, that's a good question, Linus. Thank you for the question. We are not disclosing numbers on each of our assets, but of course, there are two things.

Esa Kaikkonen: Well, that is a good question, Linus. Thank you for the question. We are not disclosing numbers on each of our assets, but of course, there are two things. First of all, the pulp and then the FBB side as well, which is impacted by the US situation and the fact is that it is a nominated capacity, has been nominated capacity predominantly to the US market. Having said that will have a negative impact, which is then described in details in our report. I will not go more on the details, but that is an excellent question. As I said, it remains to be the biggest opportunity as well for us.

Speaker #2: First of all, the pulp and then the FBB side as well, which is impacted by the US situation and the fact is that it's a nominated capacity has been nominated capacity predominantly to the US market.

Speaker #2: So that having said that, that will have a negative impact, which is then described in details in our report. I will not go to the more on the details, but that's an excellent question and as I said, it remains to be the biggest opportunity as well for us.

Speaker #3: Because one can read it differently, of course. Because as said, it already is loss-making. So does that mean that the downtime isn't as impactful as we normally would have assumed?

Linus Larsson: One can read it differently, of course, because as said, it already is loss-making, does that mean that the downtime is not as impactful as we normally would have assumed?

Speaker #2: Well, of course, giving the magnitude on that, it depends on the sales activity also in the Q3, how the how we are releasing the operative networking capital as well and the what is the situation with our sales activity generally speaking.

Esa Kaikkonen: Well, of course, giving the magnitude on that, it depends on the sales activity also in Q3, how we are releasing the operative net working capital as well and what is the situation with our sales activity, generally speaking, and how well we are able to ramp up the mill. There are so many different elements related to Husum during the quarter, so it is really difficult to give any specifics. If we could, we would have given those.

Speaker #2: And then how well we are able to ramp up the meal. So there are so many different elements in related to Husum during the quarter.

Speaker #2: So it's really difficult to give any specifics. If we could, we would have given those.

Linus Larsson: Fair enough. If I may, I will shoot one market-related question, maybe on the theme of improving market conditions, as you mentioned. There have been quite a bit of movement in the markets now in containerboard, and we have seen strength in the brown segments now for some time, price initiatives, capacity closures in North America, et cetera. It seems to me that is now spreading into the white grades as well within some price announcements in the US especially. Could you please describe what you are seeing if you are taking part in this price initiative that we are seeing in the US and also possibly in Europe?

Speaker #3: Fair enough. And then if I may, I'll shoot one market related question maybe on the theme of improving market conditions as you mentioned and there have been quite a bit of movement in the markets now in container board and we've seen strength in the brown segments now for some time.

Speaker #3: Price initiatives capacity closures in North America, et cetera. And it seems to me that that is now spreading into the white grades as well.

Speaker #3: We've seen some price announcements in the US, especially could you please describe what you are seeing if you are taking part in this in this price initiative that we're seeing in the US and also possibly in the Europe?

Speaker #2: Yeah, the market logic is that we see, of course, from the statistics as well that in both FBB and WKL, the prices have turned upwards slightly during the quarter during this quarter.

Esa Kaikkonen: The market logic is that we see, of course, from the statistics as well that in both FBB and WKL, the prices have turned upwards slightly during this quarter. On this white top kraftliner, which is the product that we are selling in the US, there is always a time lag a bit when the prices are starting to move. That is a niche product in the market, and there is kind of a time lag before these prices are moving upwards. We are seeing a positive momentum in the US as well. It happened already in Europe in Q2. Q3 onwards, we are positive on the prices in US on the white top kraftliner, as we have been explaining that earlier as well.

Speaker #2: And on this white top craft liner, which is the product that we are selling in the US, there is always a time lack a bit when the prices are starting to move that's a niche product in the market and there is a kind of a time lack before these prices are moving upwards.

Speaker #2: But we are seeing a positive momentum in the US as well. It happened already in Europe in Q2, but then Q3 onwards, we are positive on the prices in US on the white top craft liner as we have been explaining that earlier as well.

Speaker #2: But we don't it is such a niche product in the container board market that we would be following the market trends in that sense and clearly there is always a time lack.

Esa Kaikkonen: It is such a new product in the containerboard market that we will be following the market trends in that sense, and clearly there is always a time lag.

Speaker #3: Sounds good. Many thanks.

Linus Larsson: Sounds good. Many thanks.

Speaker #1: The next question comes from Joni Sandvall from Nordea. Please go ahead.

Operator 2: The next question comes from Joni Sandvall from Nordea. Please go ahead.

Operator: The next question comes from Joni Sandvall from Nordea. Please go ahead.

Speaker #4: Yeah, thanks. Thanks, Jen, for the presentation. Maybe starting with still with the demand situation in US, especially for the folding box board. Have you seen any improvement on that side or any early signs of improving demand?

Joni Sandvall: Yeah, thanks, Jens, for the presentation. Maybe starting still with the demand situation in US, especially for the folding boxboard. Have you seen any improvement on that side or any early signs of improving demand?

Speaker #2: Well, in FBB market in the US, we are the biggest player in that market and competing against the local SBS. And I think that we have seen some positive signs in the whole folded market in the US.

Esa Kaikkonen: Well, in FBB market in the US, we are the biggest player in that market and competing against the global SBS. I think that we have seen some positive signs in the whole folded market in the US, and that's where we are encouraged as well to say that we see big signs of a positive development on the FBB side at the same time there, that we could start to climb back on the growth path in the US market with FBB as well. As we've been stating as well, that it will be remaining our focus area to get back on the growth track, and we have growing customers there, and we have a competitive edge against the other folded products. I believe that at the end of the day, we'll be seeing substantial growth as well, and we are focused to deliver.

Speaker #2: And that's where we are encouraged to see encouraged as well to say that we see weak signs of a positive development on the FBB side at the same time.

Speaker #2: There that we could start to climb back on the growth path in the US market with the FBB as well as we've been stating as well that it will be remaining our focus area to get back on the growth track.

Speaker #2: And we have a growing customers there. And we have a competitive edge against the other folded products. So I believe that at the end of the day we'll be seeing substantial growth as well.

Speaker #2: And we are focused to deliver.

Speaker #4: Okay. Okay. That's clear. Then maybe coming back still Husum. It's still loss making, but given the improving trend in Europe and you taking market shares here in Europe, could you give any expectations where you when should we expect break even levels in Husum in the current market environment?

Joni Sandvall: Okay. That's clear. Maybe coming back still, Husum, it's still loss-making, but given the improving trends in Europe and you taking market shares here in Europe, could you give any expectations when should we expect breakeven levels in Husum in the current market environment?

Speaker #2: As soon as possible, of course, but having said that, it is really difficult to say that how these actions are then moving onwards and it depends quite a bit on the annual contracts that we are starting to negotiate during the autumn as well.

Esa Kaikkonen: As soon as possible, of course. Having said that, it is really difficult to say that how these actions are then moving onwards, and it depends quite a bit on the annual contracts that we are starting to negotiate during the autumn as well. The important fact that we have been earlier delivering is that we are aiming back to the growth track in the US market with FBB, Husum, and also in Europe to grow Husum's market share in the European market. Because of the fact that it is a new product in the market, it will not be a walk in the park. In that sense, it really requires a lot of technical fine-tuning and sales activity, but we are committed to deliver higher volumes in European market also for Husum.

Speaker #2: But the important fact that we have been earlier delivering is that we are aiming back to the growth track on in the US market with FBB, Husum and then also in Europe to grow Husum's market share in the European market.

Speaker #2: And because of the fact that it is a new product in the market, it will not be a walk in the park. So in that sense, it really requires a lot of technical fine tuning and sales activity.

Speaker #2: But we are committed to deliver higher volumes in the European market also for Husum.

Speaker #4: If I may add, I think it's good to note also that a large share of the transformation program is also steered towards Husum. So of course we are also taking cost measures in Husum to stay competitive.

Anssi Tammilehto: If I may add, I think it's good to note also that a large share of the transformation program is also steered towards Husum. Of course, we are doing also cost measures in Husum to stay competitive. As mentioned, it takes time to build up the sales ramp-up, and this is something we focus on quite heavily at the moment.

Speaker #4: But as mentioned, it takes time to build up the sales ramp up and this is something we focus on quite heavily at the moment.

Speaker #2: Thanks, Nancy for.

Esa Kaikkonen: Thanks, Anssi, for-

Speaker #4: Okay. Yes. That's clear. Hey, then coming back, are we going your actions with the transformation program? But what about the Taco and Cura profit improvement measures?

Joni Sandvall: Okay. Yeah, that's clear. Hey, coming back, Rikan, your actions with the transformation program, what about the Tako and Kyrö profit improvement measures, what have been taken? Obviously, Tako is closed and fixed costs have been taken down, how about this Kyrö program? How has that evolved, and have you reached your targets with Kyrö?

Speaker #4: What have been taken? Obviously Taco is closed and they are fixed cost have been taken down, but how about this Cura program? How has that evolved and have you reached your targets with Cura?

Speaker #2: Yes, if I recall correctly—and I will be rounding up some of the numbers—we said that the overall program initiated approximately €30 million of EBITDA improvement, and we are seeing about 75% of that executed.

Esa Kaikkonen: Yeah, if I recall it correctly, and I will be rounding up some of the numbers. We said that the overall program initiated EUR 30 million EBITDA improvement, roughly, and we are seeing some 75% of-

Joni Sandvall: Yeah

Esa Kaikkonen: of that executed. That's, Anssi is nodding his head.

Speaker #2: So that's nodding his head. So yeah.

Speaker #4: Exactly. This makes sense. And as mentioned, it's also visible in the results, but 75% is a good proxy for that. Okay. And the last question from my side, are you actually expecting any tariff refunds from US in the during 26?

Anssi Tammilehto: Yeah, exactly. This makes sense, and as mentioned, it's also visible in the results, but 75% is a good proxy for that.

Joni Sandvall: Okay. The last question from my side, are you actually expecting any tariff refunds from US during 2026?

Speaker #2: Yes, absolutely. We are expecting those, but those are the things that will need to then, of course, be discussed with the customers as well. That will require some extra discussions during the autumn about what will be the final impact, because there are new tariffs as well that are now in force at the level of 10%.

Esa Kaikkonen: Yes, absolutely we are expecting those are the things that we'll need to then, of course, discuss with the customers as well that we'll have really extra discussions during the autumn that what will be the final impact, because there are new tariffs as well that are now in force in the level of 10%. That will be something that we will be discussing and taking to the table with the customers and seeing that how then these potential refunds will be then distributed.

Speaker #2: So that will be something that we will be discussing and taking to the table with the customers and seeing that how then these potential refunds will be then distributed.

Speaker #4: Okay. Thanks. That's all from me.

Joni Sandvall: Okay, thanks. That's all from me.

Operator 2: The next question comes from Andrew Jones from UBS. Please go ahead.

Operator: The next question comes from Andrew Jones from UBS. Please go ahead.

Speaker #1: The next question comes from Andrew Jones from UBS. Please go ahead.

Speaker #4: Hi Jen. A couple of questions. Just first of all on that US market situation. I mean, clearly the SBS price have gone up, I guess, like 40 to 60 dollars in the last print.

Andrew Jones: Hi, Jens. A couple of questions. First of all, on that US market situation. Clearly the SBS prices have gone up, I guess like $40 to $60 in the last print. We've had, obviously, inflation in the freight costs. Don't know what perhaps gone up in dollar per ton terms, but curious on that. Obviously, your cost base has inflated with the recent round of Iran issues. Net net, has profitability on spot sales into the US actually meaningfully improved or margins kind of where they were? I have a second question, but I'll let you answer that first.

Speaker #4: But we've had obviously inflation in the freight costs. I don't know what that's gone up in dollar per ton terms, but curious on that.

Speaker #4: And obviously your cost base has inflated with the recent round of Iran issues. I mean, net net, I mean, has profitability on spot sales into the US actually meaningfully improved or margins kind of where they were?

Speaker #4: And I have a second question, but I'll let you answer that first.

Esa Kaikkonen: Maybe I will hand over to Anssi this one.

Speaker #2: Maybe I will over to answer this one.

Speaker #4: Yeah, thank you. So we did see a positive trend towards the end of the second half in the pricing and I think it's too early to tell yet how the net impact will go.

Anssi Tammilehto: Thank you. We did see a positive trend towards the end of H2 in the pricing, and I think it's too early to tell yet how the net impact will go. It, of course, depends a lot on the Brent price level and what's the logistics cost impact and also the variable cost, as we say, that's going to happen in Q2. We expect a similar type of impact in Q3. Difficult to still say what's the net impact. Of course, we are following also how the market is situated and making the most value out of that. Difficult to say the net impact because the Iran situation is changing quite rapidly, often.

Speaker #4: It of course depends a lot on the rent price level and what the logistics cost impact is. And also, the variable cost that we said is going to happen in Q2—we expect a similar type of impact in Q3.

Speaker #4: So difficult to still say what's the net impact, but of course we are following also how the market is situated and making the most value out of that.

Speaker #4: So, it's a bit difficult to say the net impact because the Iran situation is changing quite rapidly and often.

Speaker #2: Yes. Okay. That's

Andrew Jones: Okay. That's clear. On the big picture, obviously, pricing seems to have caught a bit of an uptrend across multiple grades in European paper. We've seen SCA out with another big kraftliner hike today. I would guess that probably helps your white top volumes. My question would be, what has really changed in the last couple of months to prompt such large increases? I get that there's cost push. I wouldn't imagine it's that much a ton compared to some of these hikes that are being pushed. Given the market is broadly still in pretty significant oversupply, why would customers be prepared to pay anywhere close to that? Do you see much hope for some of these price hikes on the kraftliner side? Has something changed? What are we missing in terms of the evolving supply and demand situation in Europe?

Speaker #4: clear. And on the big picture, I mean, obviously pricing seems to have caught a bit of an uptrend. Across multiple grades in European paper or something.

Speaker #4: We've seen SEA out with another big craft liner hike today. I would guess that probably helps your wide top volumes. But I mean, my big question, my question would be what has really changed in the last couple of months to prompt such large increases?

Speaker #4: Like I get that there's cost push. I wouldn't imagine it's that much per ton compared to some of these hikes that are being pushed.

Speaker #4: And given the market is broadly still in pretty significant oversupply, why would customers be prepared to pay anywhere close to that? I mean, do you see much hope for some of these price hikes on craft line aside?

Speaker #4: Has something changed? What are we missing in terms of the evolving supply and demand situation in Europe?

Esa Kaikkonen: Maybe I start with the containerboard side. I understand that there the overall operating rates have been improving lately and the demand also picking up. I see there a movement for healthier supply and demand balance in the latter part of last quarter and onwards as well. FBB side, of course, we have seen some of these curtailments because of financial difficulties of some of our competitors as well in FBB side, signaling clearly that the level of the prices are not healthy and sustainable and the capacity has been curtailed due to that fact, and that has been positively impacting the supply and demand balance and also to our order books.

Speaker #2: Maybe I'll start with the containerboard side. I understand that overall operating rates have been improving lately, and demand is also picking up.

Speaker #2: So I see there a movement for healthier supply and demand balance in a latter part of last quarter and onwards as well. And then FPP side of course we have seen some of these curtailments because of financial difficulties of some of our competitors as well in a FPP side signaling clearly that the level of the prices are not healthy and sustainable and the capacity has been curtailed due to that fact and that has been a positively impacting the supply demand balance and also to outer order books.

Speaker #4: Okay. Interesting. All right. Thank you.

Andrew Jones: Okay. Interesting. All right. Thank you.

Speaker #1: As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Cole Hawthorne from Jefferies.

Operator 2: As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from Cole Hawthorne from Jefferies. Please go ahead.

Operator: As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from Cole Hawthorne from Jefferies. Please go ahead.

Speaker #1: Please go ahead.

Speaker #4: Good afternoon. Thanks for taking my question. Just on the cost side, I'd like to ask on lower wood costs in Sweden and Finland. Just a little bit of an update of how they're feeding into your P&L.

Cole Hawthorne: Good afternoon. Thanks for taking my question. Just on the cost side, I'd like to ask on lower wood costs in Sweden and Finland, just a little bit of an update of how they're feeding into your P&L. Are you still going to get some more cost relief into Q3 and Q4? How you think about those wood costs. Secondly, on the comment that the Iran-related cost pressures persist, I think it's fair to say that everyone in the industry is aware about the gas and caustic soda for the chemical side, but one of your peers called out sulfuric acid used in the pulp process and sulfur in general. I'm just wondering, is that a particularly large cost for Metsä Board? Is there something we're missing there on the chemical side? Because I always kind of focused on caustic soda.

Cole Hathorn: Good afternoon. Thanks for taking my question. Just on the cost side, I'd like to ask on lower wood costs in Sweden and Finland, just a little bit of an update of how they're feeding into your P&L. Are you still going to get some more cost relief into Q3 and Q4? How you think about those wood costs. Secondly, on the comment that the Iran-related cost pressures persist, I think it's fair to say that everyone in the industry is aware about the gas and caustic soda for the chemical side, but one of your peers called out sulfuric acid used in the pulp process and sulfur in general. I'm just wondering, is that a particularly large cost for Metsä Board? Is there something we're missing there on the chemical side? Because I always kind of focused on caustic soda. I'll have a follow-up after that.

Speaker #4: Are you still going to get some more cost relief into third and fourth quarter and how you think about those wood costs? And then secondly, on the comment that the Iran-related cost pressures persist, I think it's fair to say that everyone in the industry is aware about the gas and cost exodus for the chemical side, but one of your peers called out sulfuric acid on used in the pulp process and sulfur in general.

Speaker #4: I'm just wondering is that a particularly large cost for Metsa Board? Is there something we're missing there on the chemical side? Because I always kind of focused on cost exodus.

Speaker #4: And then I'll have a follow-up after that.

Cole Hawthorne: I'll have a follow-up after that.

Speaker #2: Okay. Good. Maybe I will take this the wood market first and then maybe some of these general comments and remarks on the raw materials and then answer will take this details if there are something missing from my part.

Esa Kaikkonen: Okay, good. Maybe I will take this, the wood market first, some of these general comments and remarks on the raw materials, Anssi will take these details if there are something missing from my part. Looking at the wood market, there is a statistic on this one, I'm referring to the Finland, Swedish statistics in here and seeing that from 2021 to mid 2025, the price increases went from the level of Stammliches prices, EUR 30 per cubic meter up to almost 50, 55 or 100% up almost to EUR 60 on Stammliches. It has declined rather significantly, but it still stays and has been stagnated at the level of a bit more than EUR 40 per cubic meter. It has been coming down more than one-third, maybe something somewhere around that.

Speaker #2: But I'm looking at the wood market and there is a statistic on this one and I'm referring to the Finland-Swedish statistics in here and seeing that from 21 to 25, mid-25, the price increases went from the level of 30 stumpage prices 30 euros per cubic meter up to almost 55 or 100% up almost to 60 euros on stampage.

Speaker #2: And then it has declined rather significantly, but it's still stays and has been stagnated at the level of a bit more than 40 euros per cubic meter.

Speaker #2: So it has been coming down more than one third maybe something somewhere around that. And then if you're comparing the Q2, 25 to Q2, 26, the delta is in Finland minus 24% and in Sweden 12%.

Esa Kaikkonen: If you're comparing the Q2 2025 to Q2 2026, the delta is in Finland -24% and in Sweden 12%. In that sense, it's lowering. You see that from the recent statistics that the fiber cost in Finland, Sweden has been flattening now to this level that is higher than 2021 before the Ukrainian crisis. That's still burdening our cost base in the pulp and also in our own pulping and in our sister companies, Metsä Fibre's pulping. Regarding these raw material costs related to the oil and gas, I would say that still this quarter it has been relatively mild, the impact. Most of the impact has gone to the logistics cost, actually, that has been the negative consequence of this.

Speaker #2: So in that sense, it's lowering. But you see that from the recent statistics that the fiber cost in Finland, Sweden has been flattening now to this level that is higher than 21 when the before the Ukrainian crisis.

Speaker #2: So that's still burning our cost base in the pulp and also in our own pulping and in our sister companies Metsa Fibers pulping. And then regarding this raw material costs, related to the oil and oil and gas I would say that still this quarter the it has been relatively mild the impact the most of the impact has gone to the logistics cost actually.

Speaker #2: And that has been the negative consequence of this, and then, of course, cost exodus is one of those elements that we have in pulp production.

Esa Kaikkonen: Of course, caustic soda, one of those elements that we have in the pulp production, that is something that is having an impact on the Metsä Fibre's production even more significantly than to our own activities in Metsä Board. Maybe Mark can take it from there.

Speaker #2: That is something that is having an impact on the Metsa Fibers production. Even more significantly to than to our own activities in Metsa Board.

Speaker #2: But maybe I can take it.

Anssi Tammilehto: Yeah, exactly. Of course, when we track at the different impacts per different variable cost categories, these are the main topics as I've just described. I think it's more of a pulp topic for us than carton board. We of course take a look at that as well. Good point.

Speaker #4: Yeah. Exactly. And of course when we track at the different impacts per different variable cost categories, these are the main topics as I just described.

Speaker #4: So I think it's more of a pulp topic for us than cotton board. But we will of course take a look at that as well.

Speaker #4: So good point. Thank you. And then maybe just focusing back on the folding box board market. And I'd like to look at the US and Europe separately, but in the US you obviously got SAPI ramping up capacity.

Cole Hawthorne: Thank you. Then maybe just focusing back on the folding boxboard market, I'd like to look at the US and Europe separately. In the US, you've obviously got Sappi ramping up capacity. We've had people shifting from CRB into SBS because the price levels are slightly different and the market seems tighter and people are pushing price. I'm just wondering on the US market, how are you positioning yourselves so that you're able to still get people to switch from SBS into FBB? Does the price increase, if it's achieved, help you want to get more volumes back into the US market? Thoughts on the US and how you kind of take share in FBB and grow that market. Then looking at Europe, where you are redirecting some Husum volumes, ultimately, we still need capacity rationalization. China's coming in with more volumes.

Cole Hathorn: Thank you. Then maybe just focusing back on the folding boxboard market, I'd like to look at the US and Europe separately. In the US, you've obviously got Sappi ramping up capacity. We've had people shifting from CRB into SBS because the price levels are slightly different and the market seems tighter and people are pushing price. I'm just wondering on the US market, how are you positioning yourselves so that you're able to still get people to switch from SBS into FBB? Does the price increase, if it's achieved, help you want to get more volumes back into the US market? Thoughts on the US and how you kind of take share in FBB and grow that market. Then looking at Europe, where you are redirecting some Husum volumes, ultimately, we still need capacity rationalization. China's coming in with more volumes.

Speaker #4: We've had people shifting from CRB into SBS because the price levels are slightly different and the market seems tighter and people are pushing price I'm just wondering on the US market, how are you positioning yourselves so that you're able to still get people to switch from SBS into FBB?

Speaker #4: Does the price increase if it's achieved, help you want to get more volumes back into the US market? So thoughts on the US and how are you kind of take share in FBB and grow that market?

Speaker #4: And then looking at Europe, where you are redirecting some volumes, ultimately we still need capacity rationalization. China is coming in with more volumes.

Speaker #4: It is a challenging market, but we do have Renault de Medici that have just gone through restructuring and financing on the recycled board side.

Cole Hawthorne: It is a challenging market. We do have Reno De Medici that have just gone through restructuring and financing on the recycled board side. We've got FOLBB who've also gone through some insolvencies, and let's see what capacity closes. What's got to give on the continental European production capacity in your view? Who are you targeting with the Husum volumes? What is the kind of market strategy on those Husum volumes in Europe? Thank you.

Cole Hathorn: It is a challenging market. We do have Reno De Medici that have just gone through restructuring and financing on the recycled board side. We've got FOLBB who've also gone through some insolvencies, and let's see what capacity closes. What's got to give on the continental European production capacity in your view? Who are you targeting with the Husum volumes? What is the kind of market strategy on those Husum volumes in Europe? Thank you.

Speaker #4: We've got FOLB who've also gone through some insolvencies and let's see what capacity closes. But what is what's got to give on the kind of the continental European production capacity in your view?

Speaker #4: Who are you targeting with the who's in volumes? What is the kind of market strategy on those who's in volumes in Europe? Thank you.

Speaker #2: Thanks, Gal. Really specific questions regarding the, let's say, how we are going to the market. And I'll not go into the details, but in a general level, I will be commenting on this US first of all.

Esa Kaikkonen: Thanks, Cal. Really specific questions regarding, let's say, how we are going to the market, and I'll not go into the details, but in a general level, I will be commenting on this. US, first of all, I think that if you look at the strategy there, we are a premium carton board, folding boxboard supplier to the premium brands, and I think that our yield advantage against the SBS is, depending on the application, is somewhere around 10% to 30%, up to 30%. We believe that we can still, in this level, be competitive there against the SBS. It's been the earlier as the case has been, and we have been able to actually grow earlier as well, and this is something that I believe that we can get back to the growth track as well.

Speaker #2: I think that if you look at the strategy there, it's a premium we are a premium carton board folded box board supplier to the premium brands.

Speaker #2: And I think that our yield advantage against the SBS is depending on the application is somewhere around 10 to 30% up to the 30%.

Speaker #2: So we believe that we can still in this level be competitive there against the SBS. It's been the earliest the case has been and we have been able to actually grow earlier as well.

Speaker #2: And this is something that I believe that we can get back to the growth track as well. And the fact is that we have been there even when the US dollar has been weaker, much weaker actually.

Esa Kaikkonen: The fact is that we have been there even when the US dollar has been weaker, much weaker, actually, we still have been growing. I don't believe that the 10% tariff is not an issue in the longer term for us. It's an import also, actually, our import prices are exposed by that, not the whole sales price. That's also one thing that we'll have to take into account when we are seeing our competitiveness on the price levels. The most important thing is that we have our service offering, innovation, the quality, and then capability to deliver the also proof points on this sustainability that we have. The premium brands are actually appreciating that quite a lot in the US still.

Speaker #2: And we still have been growing. So I don't believe that the 10% tariff is not an issue in a longer term. For us. And it's an import also actually our import prices are exposed by that, not the whole sales price.

Speaker #2: So that's also one thing that we'll have to take into account when we are seeing our competitiveness on the price levels. But the most important thing is that we have our service offering innovation, the quality and then capability to deliver also proof points on these sustainability that we have and a premium brands are actually appreciating that quite a lot in the US still.

Speaker #2: But having said this, it is a bit more difficult than it was earlier and we'll have to make an best effort to get back to the growth track as soon as possible.

Esa Kaikkonen: Having said this, it is a bit more difficult than it was earlier, and we'll have to make an best effort to get back to the growth track as soon as possible. EU, the capacity issue, as said, we have had a capacity, first of all, curtailment earlier because it has been oversupplied, some of the headwinds on the market earlier last year. Thereafter, I think that we have seen the prices stabilizing now even going gradually upwards as of last quarter, better part of that, seeing that some of these capacities have been curtailed because of the financial constraints of some of the competitors.

Speaker #2: Then, in the EU, the capacity issue, as said, we have had capacity—first of all, curtailments earlier because it has been oversupplied, and then some of the headwinds in the market earlier last year.

Speaker #2: But then thereafter, I think that we have seen prices stabilizing now even going gradually upwards last as of last quarter. That are part of that and then seeing that some of this capacities have been curtailed because of the financial constraints of some of the competitors.

Speaker #2: So I see that that is a good example that the capacity is adjusting also in the European market based on the financial capabilities of each of the companies to deliver to the market services and products that are anticipated by the customers.

Esa Kaikkonen: I see that is a good example that the capacity is adjusting also in the European market based on the financial capabilities of each of the companies to deliver to the market services and products that are anticipated by the customers. You were mentioning some of the competitors, I will not go into the details that who we are targeting. I think that in generally speaking, you would be targeting to the key customers of yours and try to grow your market share in the key customers and seeing that you will be close to your customers and seeing that what they are in need of having from us, we will be delivering the services and the product that they are in need.

Speaker #2: And you were mentioning some of the competitors, but I will not go into the details of who we are targeting. But I think that, generally speaking, you would be targeting your key customers and trying to grow your market share with those key customers.

Speaker #2: And seeing that you will be close to your customers and seeing that what they are in need of having from us and we will be delivering the services and the product that they are in need.

Speaker #4: Thank you. I understand not being able to comment on that. Maybe just last one is, do you think that the folding box board market in Europe needs to do what's happening in graphic paper effectively see a bit more consolidation even though it's a very consolidated market because it's easier to close capacity when you've got more mills, right?

Cole Hawthorne: Thank you. I understand not being able to comment on that. Maybe just last one is, do you think that the folding boxboard market in Europe needs to do what's happening in graphic paper, effectively see a bit more consolidation even though it's a very consolidated market? Because it's easier to close capacity when you've got more mills, right? It's easier to reallocate volumes across your footprint. Do you think that the industry, we need to see some form of consolidation, either downstream into converting or across the mills to accelerate those closure plans? I'd just like your thoughts on that one. Like we're seeing with UPM and Sappi.

Cole Hathorn: Thank you. I understand not being able to comment on that. Maybe just last one is, do you think that the folding boxboard market in Europe needs to do what's happening in graphic paper, effectively see a bit more consolidation even though it's a very consolidated market? Because it's easier to close capacity when you've got more mills, right? It's easier to reallocate volumes across your footprint. Do you think that the industry, we need to see some form of consolidation, either downstream into converting or across the mills to accelerate those closure plans? I'd just like your thoughts on that one. Like we're seeing with UPM and Sappi.

Speaker #4: It's easier to reallocate volumes across your footprint. Do you think that the industry we need to see some form of consolidation either downstream into converting or across the mills to accelerate that those closure plans?

Speaker #4: I just like your thoughts on that one. Like we're seeing with UPM and SAPI?

Speaker #2: Yeah. Thanks for the question as well. Regarding this capacity, adjustments, and the consolidation, we have said clearly that our strategy is to grow in the consumer packaging business.

Esa Kaikkonen: Yeah. Thanks for the question as well in regarding of this capacity adjustments and the consolidation. We have said clearly that our strategy is to grow in the consumer packaging business, that might need also or mean also acquisitions. Of course, through that, we would be then enabling further industrial footprint optimization also. That goes without saying that it is in the toolbox of Metsä Board as well, going forward. The capacity adjustments in Europe has been traditionally very slow. The capacity adjustments, and all of these mills that we have, they're quite specialized to each of these, let's say, end use categories that they have been traditionally delivering products to. That's why they have a role in the packaging infrastructure that is existing in European market.

Speaker #2: And that might need also or mean also acquisitions and of course through that we would be then enabling further industrial footprint optimization also. So that goes without saying that it is in the toolbox of Metsa board as well.

Speaker #2: Going forward, but the capacity adjustments in Europe has been traditionally very, very slow. The capacity adjustments and all of these meals that we have they're quite specialized to each of these let's say end use categories that they have been traditionally delivering products to and that's why they have a role in the packaging infrastructure that is existing in European markets.

Speaker #2: So it's European market is much a bit more fragmented and a bit more localized in that sense that difficult to say that what kind of a capacity utilization is available there.

Esa Kaikkonen: European market is a bit more fragmented and bit more localized in that sense that difficult to say that what kind of a capacity utilization is available there. We'll be following that very closely. Thank you for the question.

Speaker #2: But we’ll be following that very closely. Thank you for the question.

Speaker #4: Thank you.

Cole Hawthorne: Thank you.

Cole Hathorn: Thank you.

Speaker #1: There are no more questions at this time. So I hand the conference back to the speakers.

Operator 2: There are no more questions at this time, I hand the conference back to the speakers.

Speaker #3: Okay. We have a couple of questions here on line two. And if I start with Esa, still if you could wrap the second half demand picture both Kraftliner and folding box board.

Katri Sundström: Okay. We have a couple of questions here online, too. If I start with Esa, still if you could wrap the H2 demand picture, both white kraftliner and folding boxboard, how do you see that? How is demand developing?

Speaker #3: How do you see that? How's demand developing?

Speaker #2: Yeah, if we are taking year-on-year, the development is really growing by double-digit numbers with the WKL, and also by high single-digit numbers with the FPB, and having a strong order inflow as well.

Esa Kaikkonen: Yeah. If we are taking year-on-year, the development, really growing double-digit numbers with the WKL and also high single-digit number with the FBB, and having a strong order inflow as well, especially in the Finnish mills and Husum partly also. That's maybe the outlook as well, that we believe that there's nothing in the market that would change that. That's partially because of our own actions as well in the market, that we have been really close to the customers, been very active in having a better grip on the market, and that has been paying off as well so

Speaker #2: In our—especially in the Finnish mills, and partly also elsewhere. So that's maybe the outlook as well, that we believe that there's nothing in the market that would change that.

Speaker #2: And that's partially because of our own actions as well in the market, that we have been really close to the customers, been very active in having a better grip on the market, and that has been paying off as well.

Speaker #2: So good.

Katri Sundström: Good. Then about the gained market share in folding boxboard, do you see that you have won market share from Asian imports or from local competition? What do you see as main drivers for the improved market share?

Speaker #3: And then about the gained market share in folding box board, do you see that you have more market share from Asian imports or from local competition?

Speaker #3: And what do you see as a main drivers for the improved market share?

Speaker #2: Well, in there, I see still if I'm looking at the statistics that the Asian importers are at the same level roughly on the imported volumes than they were earlier last year.

Esa Kaikkonen: Well, in there, I see still, if I'm looking at the statistics, that the Asian importers are at the same level roughly on the imported volumes than they were earlier last year. There we haven't seen much of a movement towards us. At the same time, the activity has not been growing in that, let's say, speed that it was earlier on Asians. They have had some, of course, issues there. Therefore, the Europeans have been keeping their position, and this is based on the Pro Carton numbers that we have been using. All the major players are involved in those statistics. It means that from the other players, European players, we have been winning the market share. The actions behind that, as I said, our services, we have been improving our service capabilities. We have been buying Windschoten.

Speaker #2: So there we haven't seen much of a movement towards us. So but at the same time, the activity has not been growing in that let's say speed that it was earlier on our Asians.

Speaker #2: So they have had some of course issues there and therefore the Europeans have been keeping their position. And this is based on the pro cartons numbers that we have been using.

Speaker #2: So all the players in or the major players are involved in those statistics. So it means that from the other players European players we have been winning the market share.

Speaker #2: And the actions behind that, as I said, our services, we have been improving our service capabilities. We have been buying windshot and we have been actually looking at our the capabilities, how we serve our customers and understanding their customer needs better.

Esa Kaikkonen: We have been actually looking at the capabilities, how we serve our customers and understanding their customer needs better, and then being better also in our quality and the whole supply chain. All of these things have been then, of course, giving us a better competitive edge in the market.

Speaker #2: And then being better also in our quality and the whole supply chain. So all of these things have been then of course giving us a better competitive edge in the market.

Speaker #3: Yes. Then, on credit ratings, I will hand this over to Ansi. Metsa Board now has a Baa3 negative outlook from Moody's and a BBB- negative outlook from S&P.

Katri Sundström: Yes. On credit ratings, I will hand over this to Anssi. Metsä Board has now Baa3 negative from Moody's and BBB- negative from S&P. How do you see the evolution of these ratings? Will you be able to recover sufficiently to change the watch ratings to stable?

Speaker #3: How do you see the evolution of these ratings? Will you be able to recover sufficiently to change the watch ratings to stable? Or is a high yield status a real prospect now?

Katri Sundström: Is a high-yield status a real prospect now?

Speaker #5: Well, it's a good question, and we have a regular update with the rating agencies. And, of course, we just announced our strategy on the 19th of March this year.

Anssi Tammilehto: Well, it's a good question, and we have regular updates with the rating agencies. Of course, we just announced our strategy on 19 March this year, and I think we are now executing that strategy. Of course, the market will fluctuate, and there are ups and downs in the market as we have now witnessed a uptick towards the end of Q2. I think we have a good dialogue, and I think all the actions we are doing are the right ones. The sales help in the cost side, the updated growth path, and the commercial actions that we are taking, and also the capital discipline. Both CapEx and net working capital, those remain very important. We are, of course, in a constant dialogue with the agencies from these points of views as well.

Speaker #5: And I think we are now executing that strategy. And of course the market will fluctuate and there are ups and downs in the market as we have now witnessed a uptick in the towards the second towards the end of the second quarter.

Speaker #5: But I think we have a good dialogue and I think all the actions we are doing are the right ones. So the self-help in the cost side the updated growth path and the commercial actions that we are taking and also the capital discipline.

Speaker #5: So both Capex and networking capital those remain very important. And we are of course in a constant dialogue with the agencies from these points of views as well.

Speaker #5: So, I think we have a good strategy, and we are now in the execution phase. I think we have all the bits and pieces of the puzzle—I think we have them.

Anssi Tammilehto: I think we have a good strategy, and we are now in the execution phase.

Katri Sundström: True.

Anssi Tammilehto: I think all the bits and pieces of the puzzle, I think we have them.

Speaker #3: Good. And then still one more an update of Joutseno pulp mill I believe this is referring to Metsa fibers when will the market related downtime end?

Katri Sundström: Good. Then still one more, an update of Joutseno pulp mill. I believe this is referring to Metsä Fibres. When will the market-related downtime end?

Speaker #2: That is depending on the wood and pulp market, I would say. So that's—I keep that very short, the answer, because it depends when it will be competitive in the market and there will be a need for that pulp, and the pulp wood market is at that level that we can do this and supply competitively.

Anssi Tammilehto: That is depending on the wood and pulp market, I would say. I keep that very short, the answer, because it depends when it will be competitive in the market, and there will be a need of that pulp, and the pulp wood market is in that level that we can do this and supply competitively.

Esa Kaikkonen: That is depending on the wood and pulp market, I would say. I keep that very short, the answer, because it depends when it will be competitive in the market, and there will be a need of that pulp, and the pulp wood market is in that level that we can do this and supply competitively.

Speaker #3: Great. That was all. And thank you Esa and Ansi. Thank you everybody for joining us today. If you would have any follow-up questions, our investor relations will be happy to help you.

Katri Sundström: Great. That was all. Thank you, Esa and Anssi. Thank you everybody for joining us today. If you would have any follow-up questions, our investor relations will be happy to help you. You will find all the materials on our website. Our next Q3 results will be published on 29 October. I wish you a very good continuation of the week and rest of the summer. Thank you and bye.

Speaker #3: You will find all the materials on our website, and our next Q3 results will be published on 29th October. I wish you a very good continuation of the week and the rest of the summer.

Speaker #3: Thank you and bye.

Anssi Tammilehto: Thank you.

Esa Kaikkonen: Thank you.

Anssi Tammilehto: Thank you.

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