Half Year 2026 Holmen AB Earnings Call

August 20, 2026

Speaker #1: Good morning, and welcome to the interim report presentation for the Holmen Group. It's me, Henrik Sjölund, and Stefan Lorehn. We will go through the presentation, and as we usually do, we'll take all the questions you have after the presentation.

Henrik Sjölund: Good morning and welcome to the interim report presentation for the Holmen Group. It is me, Henrik Sjölund, and Stefan Loréhn. We will go through the presentation, and as we usually do, we take all the questions you have after the presentation. Well, in the second quarter, first of all, the result, we were able to produce a really good result, at least a solid result, quite similar to the previous quarters. If you look at the years, though, we can see quite big changes between last year and this year. Especially in the beginning of this year, we had a really good contribution from our energy division. In the second quarter, we also see good deliveries from wood and paper.

Speaker #1: So let's start. Well, in the second quarter, first of all, the result: we were able to produce a really good result, at least a solid result, quite similar to the previous quarters.

Speaker #1: If you look at the years, though, we can see quite big changes between last year and this year, especially in the beginning of this year.

Speaker #1: We had a really good contribution from our energy division, and now, in the second quarter, we also see good deliveries from board and paper.

Speaker #1: Our financial position is strong, and during the first half of the year we've also distributed roughly SEK 2.5 billion to our shareholders through dividends and buybacks.

Henrik Sjölund: Our financial position is strong, and during the H1 of the year, we have also distributed roughly SEK 2.5 billion to our shareholders through dividend and buybacks. Let's start with our forest division, or let's say the wood market and the situation right now. It's clearly so that we have lower wood prices, and if you compare the peak towards what we buy at currently, it's roughly 10%. You should remember that we have discussed it a number of times, that we also have a backpack with wood we have bought at higher prices before, and it takes time to consume that. As things are today, we also had a storm in the beginning of the year. In our case, that means that in total, first of all, it was roughly 10 million cubic meters.

Speaker #1: Let's start with our forest division, or let's say the wood market, and the situation right now. It’s clear that we have lower wood prices, and if you compare the peak to what we buy at currently, it's roughly 10% lower.

Speaker #1: But then you should remember that we have discussed it a number of times, that we also have a backlog with wood we have bought at higher prices before, and it takes time to consume that.

Speaker #1: As things are today, we also had a storm in the beginning of the year. In our case, that means that in total, first of all, it was roughly 10 million cubic meters.

Speaker #1: In our area, roughly half a million cubic meters, which is roughly half a year's harvesting. And in this area, of course, prices are lower than the normal market, so to say, and we have consumed a bit of storm-felled timber and pulpwood already in the second quarter, and there will be some more in the third quarter.

Henrik Sjölund: In our area, roughly half a million, which is roughly half a year's harvesting. In this area, of course, prices are lower than the normal market, so to say. We have consumed a bit of storm-felled timber and pulpwood already in Q2, and there will be some more in Q3. It's of course also a temporary effect, which prolongs the. It takes longer also to consume what we had in the backpack because now we are more occupied with the storm-felled timber and pulpwood. Stefan, is there any extra cost for this when it comes to our own forest?

Speaker #1: But it’s, of course, also a temporary effect, which prolongs the— it takes longer also to consume what we had in the backpack because now we are more occupied with the storm-felled timber and pulpwood.

Speaker #1: Stefan, is there any extra cost for this when it comes to our own forest?

Speaker #3: Yes, it is. As we communicated earlier, we will have increased harvesting costs due to the storm, and that's also what we see in the results for the second quarter.

Stefan Loréhn: Yes, it is. As we communicated earlier, we will have increased harvesting costs due to the storm, and that's also what we see in the results for Q2, approximately SEK 10 to 15 million higher in Q2 than normal. That partly explains the decrease in results from the forest division. Also, prices came down for this division, of course, as prices are going down both for pulpwood and for saw logs. Finally, the storm has made us relocate part of our harvesting resources from the northern part of Sweden to the storm region. There we take care of storm fellings, of course, on our own land, as Henrik described, but also on other people's land that has been affected by the storm. That makes our own harvesting a bit lower than normal, and that level will maintain throughout the year, I would say.

Speaker #3: Approximately 10 to 15 million kronor higher in the second quarter than normal. That partly explains the decrease in results from the forest division. Also, prices came down for this division, of course, as prices are going down, both for pulpwood and for sawlogs.

Speaker #3: And finally, the storm has made us relocate part of our harvesting resources from the northern part of Sweden to the storm region, and there we take care of storm fellings, of course, on our own land, as Henrik described, but also on other people's land that has been affected by the storm.

Speaker #3: And that makes our own harvesting a bit lower than normal, and that level will be maintained throughout the year, I would say.

Speaker #1: Thank you. Changing to something totally different—renewable energy. You know that we have had, during the last year and some time before as well, quite a difficult situation when it comes to, or let's say, very different price levels when it comes to the northern parts of Sweden, southern parts of Sweden, and not the least versus Germany.

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

Speaker #1: We should remember, though, that last year, if you look at the Nordic system, there was roughly 20 terawatt-hours more water in the system than what we normally have.

Speaker #1: And if you look at the situation this year, it's the opposite. It's roughly 20 terawatt-hours of water less in the Nordic system—not so much less water in Sweden, actually more in Norway.

Speaker #1: In the first quarter, as you can see, when we had really cold weather for a couple of months in most of Europe, prices moved together, and there was hardly any difference between Germany and the different parts of Sweden.

Henrik Sjölund: In the first quarter, as you can see, when we had really cold weather for a couple of months in most of Europe, prices went together and there was hardly any difference between Germany and the different parts in Sweden. In the second quarter, still prices are on a more reasonable level, more normal level, roughly SEK 400 per megawatt hour. But of course, the system is still sensitive to the hydrological balance and the kind of weather we have, and we are lacking a bit of transmission capacity to make sure that the electrons can be used wherever they are needed, especially within Sweden. If you look at what we have earned over the years, yes, the market is volatile, but as an average, we have made a cash flow of roughly SEK 330 per megawatt hour over the years. Will this stay in the same way?

Speaker #1: In the second quarter, still, prices are at a more reasonable level, a more normal level—roughly 400 SEK per megawatt-hour. But of course, the system is still sensitive to the hydrological balance and the kind of weather we have, and we are lacking a bit of transmission capacity to make sure that the electrons can be used wherever they are needed, especially within Sweden.

Speaker #1: If you look at what we have earned over the years, yes, the market is volatile, but on average, we have made a cash flow of roughly SEK 330 per megawatt-hour over the years.

Speaker #1: Will this stay in the same way? Well, I don't think so. It might take some time. Time, and we have discussed it before, but over time, there is, especially in the northern parts in Sweden and Norway, where you have access to not only electricity but also green electricity, which is needed for Europe.

Henrik Sjölund: Well, I don't think so. It might take some time, and we have discussed it before, but over time, there is, especially the northern parts of Sweden and Norway, where you have access to not only electricity, but also green electricity, which is needed for Europe. When we look at what is about to happen, it's new industries, but it's also AI data centers, et cetera, which we see coming, but it's not coming tomorrow. It takes some time. We are also active ourselves, especially in helping companies to make sure that they can produce, for example, an AI center up in the northern parts of Sweden, also in other parts, to be honest. Stefan, that means that we did a fairly good result.

Speaker #1: And when we look at what is about to happen, it's new industries, but it's also AI, data centers, etcetera. Which we see coming, but it's not coming tomorrow.

Speaker #1: It takes some time. We are also active ourselves, especially in helping companies to make sure that they can produce, for example, an AI center up in the northern parts of Sweden.

Speaker #1: Also in other parts, to be honest. Stefan, does that mean that we achieved a fairly good result?

Speaker #3: Yes, considering it being the second quarter of the year, we maintained quite a good profit level. As Henrik said, prices came down substantially in the second quarter from the very high levels that we saw earlier this year.

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

Speaker #3: But prices were at a decent level, and we had a quite good second quarter. The result would have been even better, actually, Henrik, if it wasn't for maintenance that was conducted on the national grid.

Speaker #3: In Q2, that made us curtail part of our hydropower production. Fortunately, we could save that energy in our water reservoirs, so it can be produced later on this year.

Speaker #1: Thank you. Moving on to wood products. Well, not so much has happened. Demand is still a bit weak, both in the US and in Europe.

Henrik Sjölund: Thank you. Moving on to wood products. Well, not so much has happened. Demand is still a bit weak, both in the US and in Europe. But it's not only demand that is a bit weak, supply has also been restricted. If you look at Canada especially, you can see that western parts of Canada, supply is coming down or production is coming down. Germany, same after bark beetle infestation, now volumes are coming down. If you compare demand and supply, I think on the supply side it's more structural, on the demand side it's more the business cycle that is a bit weak. For the first time also for some time, we see that lately, also production levels in Sweden at saw mills in Sweden actually have come down.

Speaker #1: But it's not only demand that is a bit weak; supply has also been restricted. And if you look at Canada especially, you can see that in the western parts of Canada, supply is coming down—or production is coming down.

Speaker #1: Germany—same situation. After the bark beetle infestation, volumes are now coming down. And if you compare demand and supply, I think on the supply side, it's more structural.

Speaker #1: On the demand side, it's more the business cycle that is a bit weak. For the first time in some time, we see that lately, also, production levels in Sweden—that's sawmills in Sweden—actually have come down.

Speaker #1: Mainly because it's simply too expensive to buy the wood, and the market prices do not support the price for wood in the forest. On the price side, well, normally in the springtime you have a bit of a price increase and a little bit better demand.

Henrik Sjölund: Mainly because it is simply too expensive to buy the wood, and the market prices do not support the price for wood in the forest. On the price side, well, normally in the springtime you have a bit of a price increase and a little bit better demand. That happened also this year, a bit weaker than normal, but 2% to 3% roughly prices went up in export prices for us in Sweden. In the US, prices are fairly volatile and hovering around the same level, but some weeks up, some weeks a bit down. No big difference. To summarize that, Stefan.

Speaker #1: That happened also this year. A bit weaker than normal, but roughly 2 to 3 percent—prices went up in export prices for us in Sweden.

Speaker #1: In the US, prices are fairly volatile and hovering around the same level—some weeks up, some weeks a bit down, but no big difference.

Speaker #1: So to summarize that, Stefan?

Speaker #2: Yes, of course, we're

Stefan Loréhn: Yes, of course, we are still not happy with the financial performance from the wood product division, of course. But it was at least a small step in the right direction in the second quarter as the loss decreased from a level of about SEK 100 million per quarter to SEK 50. As Henrik said, we had somewhat higher selling prices in Q2, but also we had a stronger product mix, which is normal also for the second quarter. Finally, wood cost is coming down, and that also gave some tailwind to the result for the wood product division.

Speaker #3: Not still not happy with the financial performance from the Wood Product division, of course. But it was at least a small step in the right direction in the second quarter.

Speaker #3: As the loss decreased from a level of about SEK 100 million per quarter to SEK 50 million. As Henrik said, we had somewhat higher selling prices in Q2, but we also had a stronger product mix, which is normal for the second quarter.

Speaker #3: Finally, wood cost is coming down, and that also gave some tailwind to the results for the Wood Products division.

Speaker #1: Then, board and paper. Starting with board: well, demand for folding box board, or consumer packaging, is going more or less sideways. I think the underlying economy is not bad, but for different reasons, it's not really taking off at the moment.

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

Speaker #1: But also, prices are more or less sideways—unchanged prices for most of our business—and no big drama at all. When it comes to paper, it's roughly the same situation, even though we have a continuously declining demand in the market; that's quite clear.

Speaker #1: Here, it's more the cost that keeps the prices level. I'll also keep the price at the same level as the last quarter. Costs are simply quite high, and also, for most players it means that you can't run full, and then, of course, the cost is also pushed up a little bit.

Speaker #1: In our case, both for board and for paper, the order books are fairly okay—actually, quite good. But as you know, July is always a slower month when it comes to taking some downtime, et cetera.

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

Speaker #1: But where we are right now, the order books are not bad, and we're doing a bit better than the market, both in board and in paper.

Speaker #1: All in all, Stefan.

Speaker #3: Yes, it was quite a strong performance from board and paper in the second quarter, mainly driven by high deliveries in Q2, both from paper but also especially, I would say, from the board part of the business, which gave tailwind to the result.

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

Speaker #3: Also here, we see that wood cost is coming down a bit, which also supports the profit in the division in Q2.

Speaker #1: Thank you, that's all. Then let's listen to good questions, as we normally get. Welcome.

Henrik Sjölund: Thank you. That is all. Then let us listen to good questions as we normally get. Welcome.

Speaker #2: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue.

Operator: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their telephone. You will hear a tune to confirm that you have entered in the queue. If you wish to remove yourself from the question queue, you may press star and 2. Questioner on the phone, a request to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and 1 at this time. The first question comes from the line of Larson Linus from SEB. Please go ahead.

Speaker #2: If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable loudspeaker mode while asking a question.

Speaker #2: Anyone who has a question may press star and one at this time. The first question comes from the line of Larson Linus from SEB.

Speaker #2: Please go ahead.

Speaker #4: Good morning, gents. Maybe starting off where you ended on the volume side within board and paper, and it sounds like the volume pickup that you did see in the second quarter.

Linus Larson: Good morning, gents. Maybe starting off where you ended on the volume side within board and paper, it sounds like the volume pickup that you did see in Q2, 5% year-on-year, also up sequentially, was mainly relating to board, if I heard you right. What drove that? What products, regions? You sound rather cautious, but in fact you did record a pretty healthy volume development. If you could just shed some light on that, please.

Linus Larsson: Good morning, gents. Maybe starting off where you ended on the volume side within board and paper, it sounds like the volume pickup that you did see in Q2, 5% year-on-year, also up sequentially, was mainly relating to board, if I heard you right. What drove that? What products, regions? You sound rather cautious, but in fact you did record a pretty healthy volume development. If you could just shed some light on that, please.

Speaker #4: Five percent year on year, also up sequentially. It was mainly relating to board, if I heard you right. What drove that? What products, regions—and you sound rather cautious.

Speaker #4: But in fact, you did record a pretty healthy volume development. So if you could just shed some light on that, please?

Stefan Loréhn: I can start with this bit of the increase. It is quite evenly split, Linus, between the paper and the board business. As Henrik said, the order book looks quite good, to be honest, looking forward, but it was high deliveries in Q2, partly due to a bit lower volumes than normal in the first quarter. So it shifts a bit from quarter to quarter. But again, order books looks quite healthy, but Q3 is generally a bit slower than the second quarter, I would say, from a delivery point of view. At the annual market, Linus, as you know, its operating rates are not very high. They are on the low side, to be honest, but given that, we feel that we are running fairly full when it comes to our machines and our mills. Mm-hmm.

Speaker #3: I can start with the split of the increase. It's quite evenly split, Linus, between the paper and the board business. As Henrik said, the order books look quite good.

Speaker #3: To be honest, looking forward. But it was high deliveries in Q2, partly due to a bit lower volumes than normal in the first quarter.

Speaker #3: So it shifts a bit from quarter to quarter. But again, order books look quite healthy. The third quarter is generally a bit slower than the second quarter, I would say, from a delivery point of view.

Speaker #1: As for the general market, Linus, as you know, operating rates are not very high—they are on the low side, to be honest. But given that, we feel that we are running fairly full when it comes to our machines and our mills.

Speaker #4: And your remarks about sideways development—is that like on an absolute level for board and paper on aggregate? Is that type sideways in the third quarter, or is it more like what you just said, that Q3 might be somewhat weaker on the volumes?

Stefan Loréhn: Your remarks about sideways development, is that on an absolute level for board and paper on aggregate? Is that sideways in Q3, or is it more like what you just said, that Q3 might be somewhat weaker on the volumes? I can only comment on the second quarter. It was a strong quarter. Then we will see if we can repeat exactly the same numbers in Q3. We need to come back on that. But it is, as Henrik said, no major drama in the order book that changed the things dramatically on either the upside or the downside. Cool. On the wood costs, lower log prices were not visible in the P&L for the wood products business. I reckon there were other costs maybe increasing.

Linus Larsson: Your remarks about sideways development, is that on an absolute level for board and paper on aggregate? Is that sideways in Q3, or is it more like what you just said, that Q3 might be somewhat weaker on the volumes?

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

Speaker #3: I can only comment on the second quarter. It was a strong quarter. Then we'll see if we can repeat exactly the same numbers in Q3.

Speaker #3: We need to come back on that. But it's, as Henrik said, no major drama in the order book that changed anything dramatically either.

Speaker #3: The upside or the downside.

Speaker #4: Cool. And then on the wood costs, lower log prices weren't visible in the P&L for the wood products business. I reckon there were other costs, maybe, increasing.

Linus Larsson: Cool. On the wood costs, lower log prices were not visible in the P&L for the wood products business. I reckon there were other costs maybe increasing. In Q3, should we start to see what is the trajectory on unit costs Q3 on Q2 in wood products, and board and paper for that matter?

Speaker #4: In the third quarter, should we start to see—I mean, what's the trajectory on unit costs Q3 on Q2 in wood products, and board and paper for that matter?

Stefan Loréhn: In Q3, should we start to see what is the trajectory on unit costs Q3 on Q2 in wood products, and board and paper for that matter? It is hard to comment on exact numbers. We saw that the prices for both sawlogs and pulpwood were decreasing in the second quarter, partly due to us consuming quite a lot of storm fellings in the quarter. As Henrik mentioned, we have this backpack with harvesting rights that we bought at higher prices. What price we will see in Q3 is quite a lot dependent on the mix between storm fellings, what we bought recently, and what we bought earlier. But the trend is that it is decreasing both on pulpwood side and sawlog side. But it is very tricky to give you an exact number, Linus. Single-digit figures, of course, low single digits, I would say, in Q3.

Speaker #3: It's hard to comment on exact numbers. We saw that prices for both Solox and pulpwood were decreasing in the second quarter, partly due to us consuming quite a lot of storm fellings in the quarter.

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

Speaker #3: As Henrik mentioned, we have this backpack with harvesting rights that we bought at higher prices. And what price we will see in Q3 is quite a lot dependent on the mix between storm fellings, what we bought recently, and what we bought earlier.

Speaker #3: But the trend is that it is decreasing, both on the Pulpwood side and the Solox side. But it's very tricky to give you an exact number, Linus.

Speaker #3: Single-digit figures, of course—low single digits, I would say—in Q3.

Speaker #1: We are consuming the storm-felled wood in Q2. We did some, and in Q3 we will consume more, of course. But it will prolong what we have in the backpack to be able to consume that as well.

Stefan Loréhn: We are consuming the storm felled wood in Q2. We did some, and in Q3 we will consume more, of course, but it will prolong what we have in the backpack, so we will be able to consume that as well. Yeah. Partly what I am getting at is, are there other sources of potential cost inflation with regards to Iran and oil and logistics, chemicals, et cetera? Are you seeing that as an accelerating potential problem in the second half, or have you dealt with that? Are we past that? Chemicals is still coming. It is going to be a bit more expensive into Q3. Logistic cost, I would say that we are on the level as they are for the moment in the second quarter, so we do not see any increase there. But the chemicals to some extent, but it is not major numbers we talk about.

Henrik Sjölund: We are consuming the storm felled wood in Q2. We did some, and in Q3 we will consume more, of course, but it will prolong what we have in the backpack, so we will be able to consume that as well.

Speaker #4: Yeah, yeah. Partly what I'm getting at is other sources of potential cost inflation, with regards to Iran and oil and logistics, chemicals, et cetera.

Linus Larsson: Yeah. Partly what I am getting at is, are there other sources of potential cost inflation with regards to Iran and oil and logistics, chemicals, et cetera? Are you seeing that as an accelerating potential problem in the second half, or have you dealt with that? Are we past that?

Speaker #4: Are you seeing that as an accelerating potential problem in the second half, or have you kind of dealt with that? Are we past that?

Speaker #3: I would say chemicals coming in are still going to be a bit more expensive in Q3. Logistics costs, I would say, are at the same level as they are at the moment in the second quarter.

Stefan Loréhn: Chemicals is still coming. It is going to be a bit more expensive into Q3. Logistic cost, I would say that we are on the level as they are for the moment in the second quarter, so we do not see any increase there. But the chemicals to some extent, but it is not major numbers we talk about.

Speaker #3: So, we don't see any increase there. But chemicals, to some extent. But it's not major numbers we're talking about. But we have not seen the full effect.

Stefan Loréhn: But we have not seen the full effect in Q2. Okay. Understood. Thank you very much. Thank you, Linus.

Stefan Loréhn: But we have not seen the full effect in Q2.

Speaker #3: In Q2.

Speaker #4: Okay, understood. Thank you very much.

Linus Larsson: Okay. Understood. Thank you very much.

Speaker #1: Thank you, Linus.

Henrik Sjölund: Thank you, Linus.

Speaker #2: The next question comes from the line of Arthur Cole from Jefferies. Please go ahead.

Operator: The next question comes from the line of Arthur Cole from Jefferies. Please go ahead.

Speaker #5: Good morning. Thanks for taking my question. I have a couple from my side. Just a follow-up on the Forest division. I mean, you talk about limited effect on results for 2026 on site six.

Arthur Cole: Good morning. Thanks for taking my question. A couple from my side. Just to follow up on the forest division, you talk about limited effect on results for 2026 on Site 6. Is that just the fact that you are doing what you can to offset the higher harvesting costs from the felling of other forests? I am just trying to understand what the limited effect on 2026 is referring to.

Cole Hathorn: Good morning. Thanks for taking my question. A couple from my side. Just to follow up on the forest division, you talk about limited effect on results for 2026 on Site 6. Is that just the fact that you are doing what you can to offset the higher harvesting costs from the felling of other forests? I am just trying to understand what the limited effect on 2026 is referring to.

Speaker #5: Is that just the fact that you are doing what you can to offset the higher harvesting costs from the felling of other forests? I'm just trying to understand what the limited effect on 2026 is referring to.

Speaker #3: No. What we mean by the limited effect is, of course, we will have higher harvesting costs. We have said approximately SEK 30 to 40 million higher for the full year.

Stefan Loréhn: No, what we mean with the limited effect is, of course, we will have higher harvesting costs. We have said approximately 30 to 40 million SEK higher for the full year. That will take a toll on the full-year result. But the reduced volume that we see, the lower harvesting, that will not have that much of an impact on the P&L since we have the change in value forest, which partly offset that decreased harvesting. So that is what we mean with the limited effects. That is the volume part of things. We pushed some of the harvest a bit forward. That is all we do. But we have some more costs when the trees are laying down rather than standing up.

Speaker #3: That will take a toll on the full-year result. But the reduced volume that we see, the lower harvesting, will not have that much of an impact on the P&L since we have the changing value of forest, which partly offsets that decreased harvesting.

Speaker #3: So that's what we mean by the limited effects. That's the volume part of things.

Speaker #1: We pushed some of the harvest a bit forward—that's all we do. But we have some more costs when the trees are laying down rather than standing up.

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

Speaker #5: That's helpful. And then you haven't talked about—in the board and paper business, I believe Holmen's doing more kind of mechanical interliner or kraft liner on the containerboard side.

Arthur Cole: That is helpful. You have not talked about in the board and paper business, I believe Holmen is doing more mechanical interliner kraftliner on the containerboard side. Can you just give some color on the commerciality of that product? It is relatively new and niche. Is that supporting some of the volume growth of the business?

Cole Hathorn: That is helpful. You have not talked about in the board and paper business, I believe Holmen is doing more mechanical interliner kraftliner on the containerboard side. Can you just give some color on the commerciality of that product? It is relatively new and niche. Is that supporting some of the volume growth of the business?

Speaker #5: Can you just give some color on the commerciality of that product? I mean, it's relatively new and niche. And is that supporting some of the volume growth of the business?

Speaker #1: Yeah, it's a good question. I think it's a bit too early, because the volumes aren't substantial yet. There's a lot of interest in the product.

Stefan Loréhn: Yeah, it is a good question. I think it is a bit too early because the volumes are not substantial yet. There is a lot of interest for the product. We are happy with that, but we are not selling enough to give any kind of guidance or talk about volumes yet. Still to come.

Henrik Sjölund: Yeah, it is a good question. I think it is a bit too early because the volumes are not substantial yet. There is a lot of interest for the product. We are happy with that, but we are not selling enough to give any kind of guidance or talk about volumes yet. Still to come.

Speaker #1: We're happy with that, but we're not selling enough to give any kind of guidance or talk about volumes yet. Still to come.

Speaker #5: Thank you. And then, if I look at the charts that you provide from the Woodstat data, I mean, the production in Germany is off substantially, right?

Arthur Cole: Thank you. If I look at the charts that you provide from the Woodstat data, the production in Germany is off substantially, right? We have seen several players curtail, including Mercer. They are also taking economic downtime on some of their softwood pulp mills. Just some context you could provide from what you are hearing coming out of Central Eastern Europe, and when do you think we will be in a position where inventory levels for sawn wood products are in a good position?

Cole Hathorn: Thank you. If I look at the charts that you provide from the Woodstat data, the production in Germany is off substantially, right? We have seen several players curtail, including Mercer. They are also taking economic downtime on some of their softwood pulp mills. Just some context you could provide from what you are hearing coming out of Central Eastern Europe, and when do you think we will be in a position where inventory levels for sawn wood products are in a good position?

Speaker #5: I mean, we've seen several players curtail, including Mercer. They're also taking economic downtime on some of their softwood pulp mills. Just some context you could provide from what you're hearing, kind of coming out of Central and Eastern Europe.

Speaker #5: And when do you think we'll be in a position where inventory levels for sawn wood products are in a good position?

Speaker #1: I think, first of all, what you see—and what I said before—was that when it comes to the demand side, it doesn't need much to make things go our way.

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

Speaker #1: A bit better demand, a bit more activity on the construction side of the business—that’s going to happen. The question is only when it will happen.

Speaker #1: The other part, when it comes to supply—as things are in the world, or Europe, et cetera—I think it's a bit structural. It's not that easy to increase supply.

Speaker #1: So we will see what happens when things are picking up. But I would guess that you will see that supply is a bit stressed then.

Speaker #5: And then, maybe just following up on that, we've obviously seen the fires in France. I'm just wondering, do you think there is going to be any material impact to either the wood product market in the near term or the long term?

Arthur Cole: And then maybe just following up on that, we have obviously seen the fires in France. I am just wondering, do you think there is going to be any material impact to either the wood product market near term and long term? I imagine there might be an excess supply of saw logs near term, but I do not have a context of how relevant the French sawmill market is in that region.

Cole Hathorn: And then maybe just following up on that, we have obviously seen the fires in France. I am just wondering, do you think there is going to be any material impact to either the wood product market near term and long term? I imagine there might be an excess supply of saw logs near term, but I do not have a context of how relevant the French sawmill market is in that region.

Speaker #5: I imagine there might be kind of an excess supply of Solox near term, but I don't have a context for how relevant the French sawmill market is in that region.

Speaker #1: I haven't seen any exact figures on how much they estimate will need to be harvested in the short term due to fires, but normally you can take care of wood from forests that have had a fire.

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

Speaker #1: And then, of course, exactly as you say, you increase supply for a while. But I can't answer how much it will impact the total market when it comes to the French forest fires.

Speaker #5: Thank you, that's helpful. And then, last one and I'll hand across—but Stefan, is there anything that you're calling out, quarter on quarter into the third quarter, that we need to be aware of?

Arthur Cole: Thank you. That is helpful. And then last one, and I will hand across, but Stefan, is there anything that you are calling out quarter on quarter into Q3 that we need to be aware of? You talked about slightly lower delivery volumes in board and paper, but also maintenance. Anything else that you are calling out that we should be aware of into Q3?

Cole Hathorn: Thank you. That is helpful. And then last one, and I will hand across, but Stefan, is there anything that you are calling out quarter on quarter into Q3 that we need to be aware of? You talked about slightly lower delivery volumes in board and paper, but also maintenance. Anything else that you are calling out that we should be aware of into Q3?

Speaker #5: You mentioned slightly lower delivery volumes in board and paper, as well as maintenance. Is there anything else you are highlighting that we should be aware of going into Q3?

Speaker #3: No. As you know, the maintenance shaft will take a toll on the result of SEK 150 million in Q3, which is quite a normal level for that kind of shutdown.

Stefan Loréhn: No. As you know, the maintenance shut will take a toll on the result of 150 million SEK in Q3, which is quite a normal level for that kind of shutdown. Then we need to come back to the delivery side of things, when we publish the Q3 report to see if we were able to maintain this good level or not.

Speaker #3: Then we need to come back to the delivery side of things when we publish the Q3 report, and see if we were able to maintain this good level or not.

Speaker #5: Thank you.

Arthur Cole: Thank you.

Cole Hathorn: Thank you.

Speaker #1: Thank you.

Henrik Sjölund: Thank you.

Speaker #2: The next question comes from the line of Mittal Pallav from Barclays. Please go ahead.

Operator: The next question comes from the line of Pallav Mittal from Barclays. Please go ahead.

Speaker #6: Hi, good morning. Thanks for taking my question. Just to follow up on the board and paper segment: over the last couple of quarters, you have mentioned more pressure from imports.

Pallav Mittal: Hi. Good morning. Thanks for taking my questions. Just to follow up on the board and paper segment, over the last couple of quarters, you have mentioned more pressure from imports, especially from Asia. Can you just talk a bit about that dynamic? Are you seeing any changes because of the situation in the Middle East? Is that also having an impact on your deliveries in Q2 and maybe potentially in Q3 as well? That is the first one.

Speaker #6: Especially from Asia. Can you just talk a bit about that dynamic? Are you seeing any changes because of the situation in the Middle East?

Speaker #6: And is that also having an impact on your deliveries in Q2 and maybe potentially in Q3 as well? So that's the first one.

Speaker #1: I think for us, to begin with, we haven't really said that we experience a lot of competition from Asia in Europe. It's more deliveries to Asia where we could see some more competition, especially if you look at marginal business.

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

Speaker #1: But for contractual business, also in Asia, we don't really see that as a big problem right now. And we know that Asian producers have increased capacity and need to export.

Speaker #1: For example, also to Europe. But so far there are no large volumes coming into Europe—not in our segment.

Speaker #6: Got it. And then if I could just ask, in terms of the benefit from volatility in energy prices that you've experienced over the last few quarters, can you quantify or directionally help us understand how it has helped the Board and Paper segment in Q2 versus Q1, and maybe the last year when you were having SEK 200–300 million benefit per quarter?

Pallav Mittal: Got it. If I could just ask, in terms of the benefit from volatility in energy prices that you have experienced over the last few quarters, can you quantify or directionally help us understand how it has helped the board and paper segment in Q2 versus Q1 and maybe the last year when you were having 200, 300 million SEK benefit per quarter?

Speaker #3: I would say that we are back to a normal energy situation in Q2, so there's no major impact from that volatility we saw last year.

Stefan Loréhn: I would say that we are back on a normal energy situation in Q2, so there's no major impact from that volatility that we saw last year. More or less normal energy cost in that division.

Speaker #3: So, more or less normal energy cost in that division.

Speaker #6: Okay. Thank you.

Pallav Mittal: Okay. Thank you.

Speaker #1: Thank you.

Henrik Sjölund: Thank you.

Speaker #2: The next question comes from the line of Lindström Oskar from Danske Bank. Please go ahead.

Operator: The next question comes from the line of Lindstrom Oskar from Danske Bank. Please go ahead.

Speaker #7: Yes, I've got two questions left. The first one is on board and paper, where you talk about fairly full and quite okay order books.

Oskar Lindstrom: Yes. I have got two questions left. The first one is on board and paper where you talk about fairly full and quite okay order books. Is this an improvement over what you saw at the beginning of the year? That is my first question.

Oskar Lindström: Yes. I have got two questions left. The first one is on board and paper where you talk about fairly full and quite okay order books. Is this an improvement over what you saw at the beginning of the year? That is my first question.

Speaker #7: Is this an improvement over what you saw at the beginning of the year? That's my first question.

Speaker #1: A bit. Perhaps a bit better than what we expected. But as you know, it's a tough market. It's clearly overcapacity. But right now, our order books are—they are okay.

Henrik Sjölund: A bit. Perhaps a bit better than what we expected. But as you know, it is a tough market. It is clearly over capacity. But right now our order books are okay. It is not one thing, it is many small things contributing to that.

Speaker #1: It's not one thing; it's many small things contributing to that.

Speaker #7: And what are some of the main things? I'm giving you an opportunity to boast here a little bit about your products or...

Oskar Lindstrom: What are some of the main things? I am giving you an opportunity to boast here a little bit about your products or

Oskar Lindström: What are some of the main things? I am giving you an opportunity to boast here a little bit about your products or

Speaker #1: I hear that, Oskar. We have many, many customers, Oskar, and we are not the least in the luxury segment, where we do see that what we do is having some effect, but it's not easy.

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

Speaker #1: And it's not a given—not at all. But the true answer right now is that the order books are okay.

Speaker #7: All right. Good to hear. And my second and remaining question is on the energy side. You said here initially that you're helping, if I remember correctly, electricity-consuming industries to develop themselves, to establish themselves in northern, well, Sweden, or northern Nordics.

Oskar Lindstrom: All right. Good to hear. My second and remaining question is on the energy side. You said here initially that you are helping, if I remember correctly, electricity consuming industries to establish themselves in Northern Sweden or Northern Nordics. Could you say a bit more about that? You mentioned data centers.

Oskar Lindström: All right. Good to hear. My second and remaining question is on the energy side. You said here initially that you are helping, if I remember correctly, electricity consuming industries to establish themselves in Northern Sweden or Northern Nordics. Could you say a bit more about that? You mentioned data centers.

Speaker #7: Could you say a little bit more about that? You mentioned data centers.

Speaker #1: Yes, obviously, Oskar, if you're a company like us, having a lot of land and making use of the land—and also helping, so to say, the electricity system, as it takes so long for transmission capacity to be built out and to have a better balance between the different electricity areas in Sweden—I mean, it's an interesting business for us.

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

Speaker #1: We are not fully there yet, but we will tell you when we have done our first part of the business. Access to power, access to land in a part of Europe where also the electricity is fossil-free—it's a good start.

Speaker #1: And an interesting business over time.

Speaker #7: And if I may just ask a follow-up on this—and I realize you haven't announced anything, so that’s going to limit what you can say—but do you foresee a model where you're, sort of, leasing land and supplying energy?

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

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

Speaker #7: Or would you also be owners in these types of businesses? Again, I'm thinking a little bit of the analogy to wind power, where you start off leasing and then you move into owning and—

Speaker #1: The base case is the seller bit of land, for a totally different price than if you grow trees.

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

Speaker #7: Great. Thank you. Those were my questions for today.

Oskar Lindstrom: Great. Thank you. Those were my questions today.

Oskar Lindström: Great. Thank you. Those were my questions today.

Speaker #1: Thank you.

Henrik Sjölund: Thank you.

Speaker #2: The next question comes from the line of Melbye Martin from ABG. Please go ahead.

Operator: The next question comes from the line of Melby Martin from ABG Sundal Collier. Please go ahead.

Speaker #1: Yes, good morning. You hint about this expensive backlog you have of felled rights. Could you give some indication where the average price in SEK per cubic meter is on that portfolio compared to the current market prices?

Martin Melby: Yes, good morning. You hint about this expensive backpack you have of the felling rights. Could you give some indications where the average price in SEK per cubic meter is on that portfolio compared to the current market prices?

Martin Melbye: Yes, good morning. You hint about this expensive backpack you have of the felling rights. Could you give some indications where the average price in SEK per cubic meter is on that portfolio compared to the current market prices?

Henrik Sjölund: Yeah.

Stefan Loréhn: Yeah. Well, we don't display that, Martin. It's higher than the current market price, and it will take time to consume it, but it will be a mix of what we've purchased a year ago, what we purchased last quarter, and also the storm fellings. We don't have any numbers on it.

Speaker #3: No, it's—we don't display that, Martin. It's higher than the current market price, and it will take time to consume it, but it will be a mix of what we've purchased a year ago, what we purchased last quarter, and also the storm fellings.

Stefan Loréhn: Well, we don't display that, Martin. It's higher than the current market price, and it will take time to consume it, but it will be a mix of what we've purchased a year ago, what we purchased last quarter, and also the storm fellings. We don't have any numbers on it.

Speaker #3: So, we don't have any numbers on it.

Speaker #1: Is it significant?

Martin Melby: Is it significant?

Martin Melbye: Is it significant?

Speaker #3: It depends on what you compare to. The wood market is quite complicated at the moment, with the storm in the middle part of Sweden, where we see substantially lower prices than in other parts of Sweden.

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

Speaker #3: So it depends on what you compare it with. Wood cost would have been cheaper if we did not have the backpack.

Speaker #1: It takes time to come down to the level at which we buy wood for today, but it's going to happen. It's just a question of how much time it takes.

Henrik Sjölund: Takes time to come down to the level at what we buy wood for today. But it is going to happen. It is just a question of how much time it takes. It takes a bit longer with the storm, but on the other hand, we buy a bit cheaper now.

Speaker #1: And it takes a little longer with the storm. But on the other hand, we buy a bit cheaper now. Okay. And do you care to give any comments about prices for Q3?

Martin Melby: Okay. Do you care to give any comments about prices for Q3? We have seen the list prices going slightly up on carton board, paper. Do you agree on that? What about lumber?

Martin Melbye: Okay. Do you care to give any comments about prices for Q3? We have seen the list prices going slightly up on carton board, paper. Do you agree on that? What about lumber?

Speaker #1: We've seen the list prices going slightly up on cartonboard and paper. Do you agree with that? And what about lumber?

Speaker #3: As you know, our paperboard business, especially, is quite sticky when it comes to prices. They hardly move, to be honest, if you compare to market prices.

Stefan Loréhn: As you know, our paperboard business, especially, is quite sticky when it comes to prices. They hardly move, to be honest, if you compare to market prices. So that part of the business is stable. As Henrik said, on wood products and also on paper, it is quite flattish prices as we see it today.

Speaker #3: So that part of the business is stable. As Henrik said, on wood products and also on paper, it's quite flattish prices as we see it today.

Speaker #1: But you're right. The announcements we've seen are mainly for kraftliner and testliner.

Henrik Sjölund: But you are right. The announcements we have seen is mainly kraftliner and testliner.

Speaker #3: Which we don't produce.

Stefan Loréhn: Which we do not produce.

Speaker #1: We don't produce that. Okay, last question. You flagged lower harvesting in 2027 based on the storm, but the storm seems pretty modest for you.

Henrik Sjölund: We do not produce it.

Martin Melby: Okay, last question. You flag lower harvesting in 2027 based on the storm, but the storm seems pretty modest for you. And we should model any EBIT effect, is that what you are saying? Also for 2027?

Martin Melbye: Okay, last question. You flag lower harvesting in 2027 based on the storm, but the storm seems pretty modest for you. And we should model any EBIT effect, is that what you are saying? Also for 2027?

Speaker #1: Is that—and we shouldn't model any EBIT effect? Is that what you're saying? Also for '27?

Speaker #3: More or less so. It's not the effect on our own land that is actually causing us to decrease our own harvesting. It's that we make use of our harvesting resources to take care of storm fellings on other people's land.

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

Speaker #3: And the amount of harvesting resources out there is limited. So then, we need to take a step back on our own harvesting and prioritize other people's land, and use the wood from that in our own industry.

Speaker #1: I see. Thank you. Thank you.

Martin Melby: I see. Thank you.

Martin Melbye: I see. Thank you.

Henrik Sjölund: Thank you.

Speaker #2: The next question comes from the line of Maspula Yannis from Morgan Stanley. Please go ahead.

Operator: The next question comes from the line of Maspoula Yannis from Morgan Stanley. Please go ahead.

Speaker #6: Hello, thank you for the presentation. Just a few questions left from my side. The first is to follow up on this discussion before the Forest volume side of things.

Yannis Maspoula: Hello. Thank you for the presentation. Just a few questions left on my side. The first is to follow up on this discussion before the forest volume side of things and the fact that you have indicated that H1 own harvest volumes were 15% below plan, and you expect that weakness to persist next year. Can you give us an indication of what sort of volumes you are modeling for 2027, and whether we are going to see any increase year over year, and related to that, whether extra harvest cost will be similar to what we saw in 2026? That is the first one.

Ioannis Masvoulas: Hello. Thank you for the presentation. Just a few questions left on my side. The first is to follow up on this discussion before the forest volume side of things and the fact that you have indicated that H1 own harvest volumes were 15% below plan, and you expect that weakness to persist next year. Can you give us an indication of what sort of volumes you are modeling for 2027, and whether we are going to see any increase year over year, and related to that, whether extra harvest cost will be similar to what we saw in 2026? That is the first one.

Speaker #6: And the fact that you've indicated that H1 own harvest volumes were 15% below plan, and you expect that weakness to persist next year. Can you give us an indication of what sort of volumes you are modeling for '27 and whether we're going to see any increase year over year?

Speaker #6: And related to that, whether extra harvest costs will be similar to what we saw in 2026? That's the first one.

Speaker #3: Yeah, yeah. What we've said about 2026 is, we start with that one, is that we will probably harvest some 300,000 to 400,000 cubic meters less on our own land.

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

Speaker #3: Then we need to see how it will affect 2027, because we will not have finished the storm felling operations during this year.

Speaker #3: So it will roll over to 2027, where harvesting levels also will be lower—maybe not to the same extent as what we've seen for 2026—but we need to come back to that during the autumn, when we see how these storm fellings play out during the coming quarter.

Speaker #6: Okay, thank you for that. Second question, on board and paper: you talked a lot about volume development in order books. Could you give us a sense of operating rates across the two segments in the second quarter?

Yannis Maspoula: Okay. Thank you for that. Second question on board and paper, you talked a lot about volume development and order books. Could you give us a sense of operating rates across the two segments in Q2?

Ioannis Masvoulas: Okay. Thank you for that. Second question on board and paper, you talked a lot about volume development and order books. Could you give us a sense of operating rates across the two segments in Q2?

Speaker #3: We operate better than the market, of course, Henrik.

Stefan Loréhn: We operate better than market, of course, Henrik.

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

Speaker #1: You know that the operating rate in the market is maybe 75%—not better than that. But we are on a much higher level at the moment.

Speaker #3: Not running at full, but still at a much better level.

Stefan Loréhn: Not running full, but still much better level.

Speaker #1: Very good. Paper is more difficult. It's also different because on paper, nobody is running full, I think, today. We are aiming at 85–90%.

Henrik Sjölund: Very good. Paper is more difficult. It is also different because, on paper, nobody is running full, I think today. We are aiming at 85% and 90%.

Speaker #6: So, just to elaborate a bit on that, could you talk about the operating rates in board and in paper? I just want to get a sense of where the two segments are running at the moment.

Yannis Maspoula: Just to elaborate a bit on that, could you talk about the operating rates in board and in paper? Just want to get a sense on where the two segments are running at the moment.

Ioannis Masvoulas: Just to elaborate a bit on that, could you talk about the operating rates in board and in paper? Just want to get a sense on where the two segments are running at the moment.

Speaker #1: In general, if you look at the statistics, then it's a theoretical figure based on what is being consumed in Europe from European suppliers, and also what is being shipped outside Europe.

Henrik Sjölund: In general, if you look at the statistics, then it's a theoretical figure based on what is being consumed in Europe from European suppliers and also what is being shipped outside Europe. Then the operating rate for European paperboard producers are roughly 75% on average. Our aim is a lot higher than that. As we said, with the order book we have right now, we are running fairly full, not 100%, but fairly full. On paper, it's roughly the same or even a little bit lower, depending on which grade you look at. There, nobody is running full. We are aiming, I would say, at 85%, 90%. We've been there for a long time and also there, the order book is okay. So that's roughly where we are. Then it must be quite big differences between different mills and different suppliers, et cetera.

Speaker #1: The operating rate for European paperboard producers is roughly 75% on average. Our aim is a lot higher than that. And as we said, with the order book we have right now, we are running fairly full.

Speaker #1: Not 100%, but fairly full. On paper, it's roughly the same, or even a little bit lower depending on which grade you look at. And there, nobody is running full.

Speaker #1: We are running—we are aiming, I would say, at 85 to 90%. We've been there for a long time. And also, there, the order book—it's okay.

Speaker #1: So that's roughly where we are. And then, there must be quite a big difference between different mills and different suppliers, etc.

Speaker #6: Very clear. Thank you very much. And just a last question—you talked about this new sort of kraftliner product that you are rolling out.

Yannis Maspoula: Very clear. Thank you very much. Just a last question on, you talked about this new sort of kraftliner product that you are rolling out. Clearly low volume at this stage, but could you talk about the main end markets that you're focusing on today, and what's the plan on a 1 to 2 year view as you start producing more and selling more into the market?

Ioannis Masvoulas: Very clear. Thank you very much. Just a last question on, you talked about this new sort of kraftliner product that you are rolling out. Clearly low volume at this stage, but could you talk about the main end markets that you're focusing on today, and what's the plan on a 1 to 2 year view as you start producing more and selling more into the market?

Speaker #6: Clearly, low volume at this stage, but could you talk about the mainland markets that you're focusing on today, and what's the plan on a one- to two-year view as you start producing more and selling more into the market?

Speaker #1: Europe is the main market, for sure. But I don't want to comment on the volumes. I think we need to prove that we can sell and supply a bit bigger volumes before we talk about the potential.

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

Speaker #1: Of course, we have an idea, but it's too early to talk about it.

Speaker #6: Thank you very much. All the best.

Yannis Maspoula: Thank you very much. All the best.

Ioannis Masvoulas: Thank you very much. All the best.

Speaker #1: Thank you. You too.

Henrik Sjölund: Thank you. You too.

Henrik Sjölund: Thank you.

Ioannis Masvoulas: You too.

Speaker #2: The next question comes from the line of Groenzeling Jannis from SB1 Markets. Please go ahead.

Operator: The next question comes from the line of Grunsell Jonas from SEB. Please go ahead.

Speaker #3: Yes. Hi, Stefan and Henrik. Two questions from me here. The first one is on capex. If you can update us on how we should think about capex, not only for '26 but also for '27 and '28—if it's only maintenance capex, or what you see—and if you can give us some numbers there, please.

Jonas Grunsell: Yes. Hi, Stefan and Henrik. Two questions from me here. The first one is on CapEx. If you can update us on how we should think about CapEx, not only for 2026 but also for 2027, 2028, if it is only maintenance CapEx or what you see, and if you can give us some numbers there, please.

Johannes Grunselius: Yes. Hi, Stefan and Henrik. Two questions from me here. The first one is on CapEx. If you can update us on how we should think about CapEx, not only for 2026 but also for 2027, 2028, if it is only maintenance CapEx or what you see, and if you can give us some numbers there, please.

Speaker #1: Well, we have indicated for this full year a bit more than SEK 1 billion. I would say that we don't have any major plans for the next year either.

Stefan Loréhn: Well, we have indicated for this full year a bit more than SEK 1 billion. I would say that we do not have any major plans for the next year either. I think you can use that figure for 2027 as well.

Speaker #1: So I think you can use that figure for 2027 as well.

Speaker #3: Okay, that's good to know. The other question I have is more on—yeah, if you can help us understand what happened with the net working capital in the second quarter.

Jonas Grunsell: Okay. That is good to know. The other question I have is more on, if you can help us understanding what happened with the net working capital in Q2. It was a big buildup of capital, and if you foresee that to sort of revert in Q3.

Johannes Grunselius: Okay. That is good to know. The other question I have is more on, if you can help us understanding what happened with the net working capital in Q2. It was a big buildup of capital, and if you foresee that to sort of revert in Q3.

Speaker #3: It was a big build-up of capital. And if you foresee that to sort of revert in the third quarter.

Speaker #1: The reason is mainly due to very good deliveries at the end of the quarter, which increased our customer receivables. So it's just an effect from higher sales volume.

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

Speaker #1: Hopefully, that will be maintained, because that means that we are selling more product. But if we come down in volume, it will be partly reversed.

Speaker #3: Okay, that's good to know. Okay, that's all. Thank you.

Jonas Grunsell: Okay. That is good to know. Okay. That is all. Thank you.

Johannes Grunselius: Okay. That is good to know. Okay. That is all. Thank you.

Speaker #1: Thank you.

Henrik Sjölund: Thank you.

Speaker #2: As a reminder, if you wish to register for a question, please press star one on your telephone. The next question is a follow-up question from the line of Aton Cole from Jefferies.

Operator: As a reminder, if you wish to register for a question, please press star and 1 on your telephone. The next question is a follow-up question from the line of Arthur Cole from Jefferies. Please go ahead.

Speaker #2: Please go ahead.

Speaker #4: Good morning. Thanks for taking my follow-up. This is a bit of a difficult question, but I'm hoping you can give me some context on it. One thing I feel people haven't asked about for a long time is the Russian pulp, paper, and sawmill industry.

Arthur Cole: Morning. Thanks for taking my follow-up. This is a bit of a difficult question, but I am hoping you can give me some context on it. The one thing I feel people have not asked on for a long time is around the Russian pulp, paper, and sawmill industry. I am not asking on wood potentially coming into the Nordics. I am asking on, what is the tail risk of potentially some of their sawmills or pulp mills ultimately having production issues or downtime because they are not being maintained, staff issues, or potentially not having the harvesting equipment to actually get the lumber to their sawmills or pulp mills? Do you have any kind of context, or is that something that Holmen thinks about? I am thinking more on the sawmill and global lumber side.

Cole Hathorn: Morning. Thanks for taking my follow-up. This is a bit of a difficult question, but I am hoping you can give me some context on it. The one thing I feel people have not asked on for a long time is around the Russian pulp, paper, and sawmill industry. I am not asking on wood potentially coming into the Nordics. I am asking on, what is the tail risk of potentially some of their sawmills or pulp mills ultimately having production issues or downtime because they are not being maintained, staff issues, or potentially not having the harvesting equipment to actually get the lumber to their sawmills or pulp mills? Do you have any kind of context, or is that something that Holmen thinks about? I am thinking more on the sawmill and global lumber side.

Speaker #4: And I'm not asking on, kind of, wood potentially coming into the Nordics. I'm asking about what is the tail risk of potentially some of their sawmills or pulp mills ultimately having production issues or downtime because they are not being maintained, staff issues, or potentially not having the harvesting equipment to actually get the lumber to their sawmills or pulp mills.

Speaker #4: Do you have any kind of context, or is that something that Holmen thinks about? And I'm thinking more on the sawmill and global lumber side.

Speaker #4: Maybe you could just give some context on how many harvesters you produce a year, where that figure comes from, and any additional context you can provide on that.

Arthur Cole: Maybe you could just give some context of how many harvesters you produce a year, where you get that from. Any context you can give on that. I know it is a very difficult question, but any help would be useful.

Cole Hathorn: Maybe you could just give some context of how many harvesters you produce a year, where you get that from. Any context you can give on that. I know it is a very difficult question, but any help would be useful.

Speaker #4: I know it's a very difficult question, but any help would be useful.

Speaker #1: I think it's a very good question. We think about exactly the same issues ourselves. What we do see—and we don't have all the statistics—but what we can see is absolutely that Russia has not stopped producing wood products, absolutely not.

Henrik Sjölund: I think it is a very good question. We think about exactly the same issues ourselves. What we do see, and we do not have all the statistics, but what we can see is absolutely that Russia have not stopped producing wood products. Absolutely not. A lot is going east rather than west, as it should, given the restrictions. I think you are right. It is difficult to get spare parts, et cetera, so it will, of course, have an impact. As we are in this industry having overcapacity in most areas, it helps a bit now what the effect will be once there will be availability of spare parts, et cetera, again. I think there will be a bigger impact with wood coming from Russia going west again when that time comes.

Speaker #1: And a lot is going east rather than west, as it should, given the restrictions. I think you're right. It's difficult to get spare parts, etc.

Speaker #1: So it will, of course, have an impact. And as we are in this industry, having overcapacity in most areas, it helps a bit now.

Speaker #1: What effect will there be once there is availability of spare parts again? I think there will be a bigger impact with the wood coming from Russia going west again.

Speaker #1: When that time comes—even though it's mainly been saw logs, not so much pulpwood—but still, for sure, that will have some kind of impact.

Henrik Sjölund: Even though it is mainly been saw logs, not so much pulpwood, but still, for sure that will have some kind of impact.

Speaker #4: Thank you. And then maybe for a little bit of color there, for harvesters and the products that you're buying for your own forest operations, who are the main suppliers?

Arthur Cole: Thank you. Then, maybe for a little bit of color there, but for harvesters and the products that you are buying for your own forest operations, who are the main suppliers? Were there any domestic Russian suppliers, or would it all have been Europeans and effectively Japanese?

Cole Hathorn: Thank you. Then, maybe for a little bit of color there, but for harvesters and the products that you are buying for your own forest operations, who are the main suppliers? Were there any domestic Russian suppliers, or would it all have been Europeans and effectively Japanese?

Speaker #4: Were there any domestic Russian suppliers? Or would it all have been Europeans and, effectively, Japanese?

Speaker #1: I frankly don't know exactly—it's a good question. I don't know of any Russian ones; I only know about the ones we use.

Stefan Loréhn: I frankly do not know exactly what kind of

Henrik Sjölund: It is a good question. I do not know of any Russian ones. I only know about the ones we use. They are not Russian, for sure not.

Speaker #1: They are not Russian, definitely not.

Speaker #4: Perfect. Thanks for the help on the difficult question. I appreciate it.

Arthur Cole: Perfect. Thanks for the help on the difficult question. Appreciate it.

Cole Hathorn: Perfect. Thanks for the help on the difficult question. Appreciate it.

Speaker #1: Okay. I don't know if it would be much of a help, but good question. Thank you.

Henrik Sjölund: I do not know if it was much of a help, but good question. Thank you.

Speaker #5: Ladies and gentlemen, that was

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

Speaker #2: That was the last question. I would now like to turn the conference back over to Henrik Sjolund for any closing remarks.

Speaker #1: Thank you very much for taking your time and for your very good questions. I look forward to seeing you again soon. Thank you, and have a good day.

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

Speaker #2: Ladies and gentlemen, the conference is now over. Thank you for choosing Colin's call, and thank you for participating in the conference. You may now disconnect your line.

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

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Half Year 2026 Holmen AB Earnings Call

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