Mondi PLC — Call Transcript 2025

Good morning, everyone, and thank you for joining today's call at short notice. As said, I'm Andrew King, Group CEO, and with me is Mike Powell, our Group CFO. As you all have seen from our statement, the challenging market environment we spoke about at our half-year results in July has continued through the third quarter. This resulted in an underlying EBITDA of EUR 223 million for the quarter. Across the period, we saw subdued market demand impacting sales volumes in the upstream pulp and paper businesses in particular. And since we last reported results at the end of July, we've also seen further pulp and paper price declines across most grades. Our packaging converting operations delivered a stable performance when compared to the prior quarter, despite this difficult backdrop. Challenging trading conditions are expected to persist for the remainder of this year as demand-side confidence remains fragile. Furthermore, key markets remain in oversupply, and current selling prices are lower than the third-quarter averages. While we remain confident in the structural drivers underpinning through-cycle growth in our packaging solutions, we are equally cognizant of the impact of the current prolonged cyclical downturn on near-term performance. In response, we have intensified our focus on operational efficiency, cost control, and cash generation, mitigating the impact of the current softer markets while ensuring we are well-positioned to capture growth and deliver enhanced returns when favorable conditions return. In this context, in the six months since completing the acquisition of Schumacher, we have identified an additional EUR 10 million across synergies, taking the total identified synergies to EUR 32 million. As a further step to streamline our organization, facilitate cost takeout, and drive synergies across our pulp and paper businesses in particular, we are combining our uncoated fine paper business with our corrugated packaging business unit. Going forward, then, we'll be organized into two business units: the enlarged corrugated packaging and flexible packaging, which remains unchanged. All our capacity expansion projects are ramping up, and we remain confident that they are cost-competitive, deliver significant integration benefits, and once fully optimized, will deliver mid-teen, mid-cycle returns. However, near-term profitability is heavily influenced by prevailing market conditions, meaning the net incremental contribution to full-year 2025 EBITDA is now expected to be around EUR 30 million. We are ensuring that all ongoing capital expenditure is focused on stay-in-business CapEx and cost optimization opportunities. As you will know, the remaining major capacity expansion project we have been working on is the new Sack Kraft Paper Machine at our Hinton Mill in Canada. We have decided to put this project on hold, but we retain the full optionality to invest when market conditions improve. We are confident these steps will enable us to navigate current headwinds, build a stronger, more efficient operating platform, and drive free cash flow. This will protect value today and enhance returns when market conditions improve. With that short introduction, I'm happy to take questions. Mike and I are both here to take questions, so we'll hand back to the operator. Thank you. Thank you. Just a reminder, our audience, please, if you wish to ask a question, use the raise hand function, invite it, unmute, and ask your question for live. Our first question for you comes from Charlie Muir-Sands. Charlie, please unmute and go ahead and ask your question. Good morning, guys. Can you hear me okay? We can. Thank you, Charlie. Great. Yeah, thank you very much for taking my questions, so I had two, please. Firstly, you talk about increased focus on cost and actions in that regard. I just wondered at this stage whether you had any particular program in mind and whether there was going to be any specific quantum of additional cost savings that you would be aiming to target and if there would be any kind of one-time charges in order to implement those changes, and then the second question relates to the weakness of demand. I think you said demand in your packaging operations was stable, so it sounds like it's weakness in, you obviously mentioned pulp and paper, but also sort of packaging materials, packaging papers themselves. So do you get the sense that there was an element of destocking amongst your customer base going on, or are they exposed to end markets which are different to your own converting operations and therefore there's sort of uneven weakness out there? Thank you. Thanks, Charlie. On the first question, so clearly we have a philosophy around continuous improvement. That being said, clearly at times like this one looks to accelerate wherever possible around, call it the cost takeout initiatives. We are working through a number of programs, some of which are very much, call it shop floor-led. Part of the rationale, and we'll talk about it around the reorganization of our business units, is about driving very much a shop floor efficiency and productivity excellence initiative, and simply put, it's easier to run those sort of things out under one umbrella, so we are doing those sort of programs, which of course are somewhat longer term in nature, but we are very confident will continue to take us to the next level of operational efficiency. I think we are good at it, and we can get even better. It doesn't per se mean any one-off costs associated with that. Clearly, to the extent we look at any further cost takeout opportunities, there might be some one-off costs involved, but those are difficult to quantify at this stage, and we are working through those programs at the moment. On your question on the demand side softness, I think it can't all be ascribed to destocking. So you're right in that the converting business has held up pretty well from a profitability perspective. But undoubtedly, there's a fight for share in those markets where demand, it's not, as I say, it's not falling off a cliff or anything like that. It's just been grinding along in a very subdued manner. And that has caused intense competition, and of course, that has impacts on margins. But volumes are okay, but certainly not in any kind of rebound phase at this stage on the demand side at the underlying converting level. Where we are seeing softness, of course, is that translates across the value chain and up into the paper businesses. So we have been taking some downtime in our paper businesses, which of course has big profit implications because you're carrying a big fixed cost base. But that is a necessary response to what remains a very subdued demand-side environment and clearly coupled in certain cases by oversupply problems with big capacity expansions, particularly the recycled container space, as everyone is well aware. So it's really that combination, but I wouldn't put it down to a destocking effect. I think it is a general market softness throughout the value chain. Thank you. Our next question is from Lars Kjellberg at Stifel. Lars, please unmute and go ahead and ask your question. Yeah, thank you for taking my question. I just want to come back a bit just to understand what you said about demand. Did you see a sequential weakening market in the third quarter versus Q2? Second question is about the maintenance shuts you talked about extending them, but can you give us a sense of, call it the maintenance costs in the quarter and what you expect to have on the balance of the year? Also, FX, does that play a role here? There's been some significant movements, of course, and the dollar has been particularly weak. Does that play a role? And the final question is about the restructuring that you're talking about of merging the fine paper business with the sort of corrugated packaging business. I guess there is some overlap at Ružomberok and Richards Bay, but from the outside, of course, that reduces the visibility in your earnings space. So what are the real benefits from bringing those two businesses together? Thanks, Lars. Let me start with your second and third question on maintenance and FX. So on maintenance, we have extended the shuts due to the subdued demand situation. At the half-year, I guided there would be about EUR 40 million in Q3 and EUR 40 million in Q4. We took about EUR 50 million in Q3, and I'd expect the same roughly number in Q4. So maintenance shuts up 10 in both quarters. In terms of FX, yeah, the dollar continues, as you say. It's probably, again, in the round, probably EUR 5 million. It's always a difficult number because we sell in a number of currencies that are sort of dollar-pegged. So the bigger issue is the wider economic impact of the dollar and the economic policies behind it. But in the quarter, it's probably a EUR 5 million impact. As I say, it's quite a difficult number to really pin down, but it's of that order, Lars. Yeah, and I'll just add on the currency story, Lars. I mean, clearly it has a bigger impact in a softer demand environment because invariably what happens is to the extent your core home markets are softer, that invariably means you typically export a bit more. And of course, exporting into a weaker dollar pricing has negative mix effects. So it is an important driver in that context, probably more so than the straight transactional exposures that Mike referred to. Just in terms of your first question on the demand-side weakness, how much does it look sequentially? I mean, firstly, very clearly, as you could imagine, it's only just the beginning of October. We don't have all the industry numbers, so it's always dangerous to just quote our numbers in isolation because, of course, we don't know how the market shares and the like have been moving over this period. I don't suggest it's got materially worse, particularly in the packaging side. It just hasn't got better, and I think July was a relatively weak month for the industry. If you look at the industry stats, as I said, I don't think we've got August and September yet. They haven't been published, so simply put, we don't know exactly what the industry numbers look like, but I would just suggest that there's been this continued weakness on the corrugated side, which hasn't got worse, just hasn't got better. Fine paper, clearly, I think you saw a sharp decline in demand over the first half. That certainly hasn't recovered into the second half. And frankly, there's an intense fight for share in a shrinking market that's taking place at the moment, exacerbated by the weak pulp price because, of course, the weak pulp price flattens out the cost curve, gives more oxygen to the higher cost unintegrated producers. And that is now translating into margin pressures with both pulp prices having come down. We're going to be exposed directly to that with the long pulp position, but also the impact it's having on paper prices. And then in Kraft paper, again, if you look at the underlying bag demand, it's okay. Kraft paper demand in the first half was quite weak, and I think that's continued into the second half. And again, that is now putting pressure on pricing. And that probably is, call it the new news relative to what we've seen at the half-year. Sorry. And then your last point on the reorganization of the business units, I appreciate there's the external reporting issues there, but very clearly, we report as we run the business. We've run on a value chain basis, and we think that that's appropriate because that gives the necessary customer focus, the necessary speed and response of innovation and development. And we've got a lot of exciting work that we are doing in that regard and will continue to do. But at the same time, we recognize that having our pulp and paper operations in three different business units adds a degree of complexity. And the reality is the two biggest operations in uncoated fine paper are mixed-use mills. It's Ružomberok in Slovakia, which produces both containerboard and fine paper. And it's Richards Bay in South Africa, which is actually not even a fine paper mill. It's pulp and containerboard. Frankly, it makes sense to run those under one system combined with the big containerboard operations, obviously Świecie being the flagship there, Duino, Kuopio, and the others. So it really facilitates, frankly, from an operational perspective, driving best practice across our pulp and paper mills. As I say, we are implementing at the moment a shop floor operating system. And I think that exercise in itself showed up some of the additional complexities we had by having, as I say, those mills in different business units. And this simply allows us to be much more efficient in driving those processes, driving our businesses to the next level of operational excellence. So that is the motivation behind it. Obviously, that also allows some streamlining of the corporate overhead and ensuring that we really do get faster and more agile than we've been before. So it's for all of those reasons that we are combining those two businesses in this reorganization. And you've got all the history of the two businesses. Simply put, if you add those two numbers together, you get the combined business. So it's very easy to compare historic performance versus what we'll be reporting on going forward. And just to add finally to that, clearly, the direction of travel for our growth is in our packaging businesses, and that's where we invest in for growth, and that's where we'll continue to do so. So those are the reasons we did it. I appreciate that has a reporting implication, but no doubt Mike and Fiona will help you understand the respective numbers there. Thank you, Lars. Operator. Thank you. Our next raised hand is from Brian Morgan at RMB Morgan Stanley. Brian, please unmute and go ahead. Hi guys. Thanks very much for the time. Two questions, if I may. Andrew, in the past, we've spoken about Kraftliner imports coming in from the U.S., typically when the dollar's weaker. Are you seeing that this time? Yes and no. So there definitely, as you say, there typically is some Kraftliner coming from the U.S. most of the time. You would have expected maybe more with the current dollar weakness, but in a sense, I think that is not happening simply because the positive on that side is really the closures in the U.S. I think it tightened up the U.S. market. And rightly, I think most of the U.S. producers saw exports as not being where you should sort of structurally position yourself. And so I suspect a lot of the capacity reductions have targeted reducing their reliance on exports. And that's probably manifesting in the fact that despite the weaker dollar, you're not really seeing a big surge of imports that you might have expected in a different world. That's good. Thank you, Andrew. And then the question is on dividend, if I may. So quite a bad free cash flow negative situation this year, obviously with all the projects that you spent on, and I suppose they're all in the rearview mirror now. Is the dividend from last year still intact, or should we be thinking about a lower dividend year on year? No, Brian, I mean, I think you said at the half-year, we always look at the dividend at the end of the year as a board. We'll do that again. Clearly, you've seen in the release and Andrew's commented about the focus on cash, the CapEx number for FY26, at least the guidance I've given out, and you've also heard us talk about Hinton today, which clearly means that that cash that might have been penciled in for FY27 isn't going to flow out now, and clearly, the internal focus is very much around cash delivery, so I think we'll look at it in the round as we always do. We've got a good balance sheet still. Clearly, the net debt is the controllable to some extent, and the big dollar moves around, as we've seen over the last, frankly, three to four years. Our job is to, as you say, focus on that free cash and the capital allocation within it, and for the dividend, we'll have a look at it at the end of the year. It's an important part of our capital stack, but we'll clearly have a look where the economy is towards the end of middle of February, probably. Thanks, Mike. Very importantly, as Mike says on the CapEx, we in a way have the luxury of being able to pull back without mortgaging the upside that we are confident will come. But clearly, in the here and now, the focus is very much on staying in business, CapEx, cost optimization, but clearly, the capacity is in. It's now about fully utilizing it. Thanks, Andrew. Very good. Thank you. Thank you. Our next question from Cole Hathorn at Jefferies. Cole, please unmute and go ahead. Good morning. Thanks for taking the question. Can I just follow up on the major CapEx projects, the guidance now moving down to EUR 30 million contribution? Is there any color you can give on to 2026? And then similarly, I know it's early, but I'm sure you're starting to think about the 2026 year. Could you start talking about some of the positive moving parts in what will be the sequential contributors to EBITDA for 2026 from here? Thank you. Yeah. Cole, it's Mike. Just on the first one, I mean, it's pretty difficult because, of course, it relates to the second part of your question. I mean, very simply put, if you think of the projects, we're very sort of pleased to where we've got to in terms of the build and the ramp-up. Clearly, the commercial and the pricing is the issue. That's the issue across the whole of the business. And of course, those projects are probably 20% of the capital employed of the group. So they get affected just as the rest of the group does. So it'll depend on the dynamics into 2026, what that number pans out to be. Andrew, do you want to touch on thoughts around next year? Yeah. I think, Cole, I mean, we're in a world which is extremely difficult to predict at the moment. I think everyone felt that at the beginning of this year, there was some upward momentum. I mean, we were certainly seeing it in the pricing dynamic. We were seeing it in, frankly, the volume dynamic as well. What gives me confidence is we are still seeing good volume growth in our converting businesses, albeit not what we were anticipating earlier this year. And clearly, as always, packaging consumption is a function of the macroeconomic backdrop. And Europe in particular remains very muted. I think the big question is what changes in that regard. And clearly, if one started to see some consumer confidence returning, some manufacturing confidence returning, that can change things quite quickly. But that is clearly the single biggest driver in terms of relative profitability from one thing to the next. We are extremely confident that the structural growth dynamics that underpin our packaging offerings remain very much intact, and we're simply in the middle of what is a very prolonged downturn. I mean, one traces this downturn back to kind of end of 2021 into the middle of 2022 when demand side started to soften, and really, we've been in a very protracted period now of slowdown, so clearly, that is the single biggest driver behind what might impact the year-on-year profitability. We caution that going into Q4, we're not seeing anything on that front at the moment, and so hence, we have to be cautious about the short-term outlook, but again, we are very confident in the medium-term growth dynamic in the packaging businesses that we are well invested in and have exposure to the upside. In the short term, clearly, our job is to make sure we do the things we've been talking about around controlling what we can in terms of the driving cost down, driving productivity, and ensuring we are best placed because the world does recover. Clearly, in terms of the long-term bridges, it's very difficult to say at this point. But obviously, as Mike already said, on the CapEx front, it is a function of how the market develops. In addition to the self-help, which will always naturally cover as we ramp these things up, the likes of Duino in particular is very much still in ramp-up with all the costs associated with that. You get a big fixed cost base before you get the full benefits of the volumes coming through. So we still have to optimize all of those sort of investments from a ramp-up perspective. And then, of course, we also are doing all the work on the Schumacher integration. You saw the synergy and the cost synergy number. That is the primary big focus at the moment in addition to the commercial ramp-up, which is critical. And yeah, and then going forward, obviously, things like the long-term shuts, etc. As Mike's already said, we extended some of those shuts this year. Clearly, in a better market environment, you wouldn't do that. And off the top of my head, I don't think I can point to any material change in our planning around the actual technical shut component. So yeah, in short, Cole, I know it's a difficult one, but it is a function also of what one sees around the macroeconomic spectrum. Andrew, Mike, and then maybe I'll just ask on costs. Is there anything that you're calling out from kind of a cost bucket or wood or anything like that that you can highlight? And then I know demand is something that you can't control, but we have seen across the industry, including all the Nordics players, we've seen some of the smaller guys also extend and take commercial downtime in a lot of their facilities. Do you think we're finally at a point now where the industry just has to close capacity? Yeah. I think was your question on input costs, Cole? I think it was. Yes, input costs first. Thank you. Sorry, I know that's a sort of non-be terminology. Yeah, so on our input costs, it's played out as I expected the half-year. The environment is pretty benign, so pretty flat on input costs, which I think, again, gives you some sign that the economy, particularly around Europe, is flat. We have seen some relief, obviously, on PFR. And I also said at the half that our own initiatives, if you like, to be more competitive and buy better than the competition are coming through. So the second half is panning out as we thought, small positives, but frankly, we'll take those right now. We continue to work hard on it. Andrew. Yeah. And on the capacity closures, I mean, absolutely, there's huge pressure right now. And frankly, the industry profitability levels more broadly are such that there's every incentive for closures. Clearly, the one that gets most visibility is recycled containerboard. I know everyone has their own calculations, but you can easily see 30%-40% of the industry right now is cash negative, I would say, in terms of if you look at the cost curve. That is clearly not a sustainable position. As you know, there have been some movements in that regard. I suspect there needs to be more, and there's every incentive for more capacity closures on that front. As you would expect, we always look at our own portfolio in that regard, but I suppose that our operations are well positioned on the cost curve. And also we have a big virgin position, which is a different dynamic. It's not really a cost dynamic, sorry, a supply side dynamic other than the knock-on effect of the overcapacity and recycled containerboard. So there's huge incentive for closures. There's every reason to believe there should be more closures. And the longer the situation currently prevails, the greater the pressure there is for those closures to take place. And in other sectors, I would say in this Kraft paper, it's a different dynamic. Clearly, that's a market where you do have the big industrial exposures, which clearly have more cyclical pressures than typical consumer applications. And so there I see it almost purely a demand-side cyclicality issue. At the same time, it's incumbent on us to manage based on what the market is currently doing. We are, as I say, doubling down our efforts around cost and productivity and the like, as you would expect, and responding to the market conditions in the most agile way. And then maybe finally on the fine paper side, clearly, as I said earlier, the cost curve in Europe has flattened out given the decline in pulp prices. That is still a big factor in your ability to drive margins in the fine paper business in Europe because when pulp prices go down, the high-cost unintegrated producers get some relief. But unfortunately, at the moment, all that that means is there's a competition for, as I say, the smaller market that now exists given the demand-side pressures. So that is also, I think, causing a lot of, or it is undoubtedly causing a lot of margin pressure across the industry. And I wouldn't be surprised to see if there would be more closures on that front as well. So yeah, I think that's in a nutshell where we see it. Thanks, All. Thank you. Our next raised hand is from Palav Mittal at Barclays. Palav, please unmute and go ahead. So a couple of questions. If I recall correctly, at the half-year results, you were saying we could potentially see the spread between Kraftliner and Testliner widening. And if I look at the recent indices, Kraftliner actually has been more stable than Testliner over the last few months and has not declined as much. But today, you are talking about declining selling prices. So are you saying that these indices are not capturing the actuals and are lagging behind? So that's the first question. And then secondly, just if you could confirm on your forestry fair value gain for the full year, do you still expect around EUR 60 million, the long-term average for the full year is fair? Yeah, thanks, Palav. Yeah, on the fair value, I mean, that's my best guess today. We booked 20 in Q3. I would expect about 20. It is a variable number, I have to say. Depends on growth rates, oil prices, etc. So as we know from history, it's a pretty volatile number. But sat here today, if everything doesn't change, which in this world is quite a difficult thing to say, I'd expect another 20. But it is a best guess, and it's a volatile number depending on a number of factors which occur at balance sheet date. So it's a spot calculation of the balance sheet. But if you want to plug a number in, plug that in, but it's a variable number. Yeah. And on the Kraftliner, Testliner spread, I didn't follow the exact end of the question, but I think the question was very much in the face of the Testliner declines, what's been happening with Kraftliner. Yes, the fact is the spread has widened, but at the same time, Kraftliner prices have been coming off. I think if you look at the kind of index data and things like that, you're probably looking at over the last three months, something like EUR 90 a tonne-ish. Testliner price declines, Kraftliner's in the order of kind of EUR 30. And I stress that's the benchmark pricing. I mean, we're not going to obviously give our own pricing. So yes, Kraftliner's held up better than Testliner, as one would expect, given the supply-side dynamics that exist in the two different markets. But at the same time, there is, call it, substitution between the two on the margin. And the supply overhang in Testliner has had some impact on the Kraftliner prices, albeit they are more resilient. And so that's really the dynamic that's played out in the short term on the Testliner-Kraftliner spread. Okay, thank you. Thanks, Palav. Operator. Thank you. Our next question is from James Twyman at Prescient Securities. James, please unmute and go ahead. Yeah, thank you very much for the call. Can I just focus a little on the sack paper business? Prices have been holding up very well. It looks like they were flat in Q3. So I think the new information you're coming out with today seems to be about sack paper prices now starting to fall, which would imply that's more of a Q4 factor. Could you talk around that and whether the fall is sort of marginal, as you're seeing in some of the other paper grades, or whether it is significant for Q4? Thanks. Thanks, James. Yeah, I mean, as you know, in sack, the indices only come out kind of once a quarter, so you don't see the real live pricing for the latter term. There has been some price erosion through Q3. Again, one has to be careful to generalize because obviously different markets are differently impacted. But there has been some price erosion. I mean, if you look at it from the peak, and as you well know, prices were going up through the first half of the year, and then they've been coming down a little bit in Q3 and then clearly into Q4 as well. From peak to now, it's kind of EUR 30-EUR 50, that order of magnitude price declines. But obviously, the peak was only there for a short period of time. Those indices, they make the market look more stable than it is, particularly in the current environment where clearly pricing is much more dynamic than a typically more stable operating environment. Thank you very much. If I could just quickly follow up regarding the merger of these two divisions, there must be obviously a reason for it, which must be reducing costs. What sort of scale of costs are you thinking? I mean, my impression must be that it's pretty marginal looking at the assets there. Yes. Yeah, I think, James, I spoke hopefully at length about the rationale for that reorganization. It's not simply a headline cost takeout thing. It's about driving the operational efficiencies across particularly the pulp and paper operations. As I said, we have the two biggest operations in fine paper are actually mixed use. They essentially report into both business units and simply put, it's much easier for us to run it in a single business unit and drive all the important initiatives around, as I say, shop floor, operational excellence programs, and the like, where clearly there's huge commonality across those different pulp mills because the paper makers would hate me for saying this, but they're taking wood in one end and they produce their paper out the other. One of them is white, the other is brown. I don't want to belittle that because, of course, then when you sell it, it's sold into very different channels. And of course, we fully respect that, and we will be continuing to optimize our sales channels into the respective different customer bases. But importantly, I think there's an opportunity for us to simplify the structures to drive a further improvement in our operational excellence, which is clearly the lifeblood of particularly the pulp and paper mills. Thank you very much. Thank you. We now take our final question from Lewis Roxburgh at Goodbody. Louis, please unmute and go ahead. Morning, guys. Just two questions for me. Just on the capacity ramp-up, just as everything progressing as planned in terms of getting those assets fully operational, just wondering if you're starting to see the efficiencies come through there, are the costs as expected, and maybe some of the benefits of going through this investment under weaker market conditions? And then just secondly, just on the moving parts in Q3, just breaking out the performance of corrugated and flexible packaging and whether that changes anything from a long-term standpoint, particularly in light of the dynamic of oversupply? Thanks. Yeah, Lewis, just on the capacity, I mean, the sort of technical builds are behind us. Clearly, it always takes, I mean, in the best of worlds, two, three years to optimize the ramp-up of production. Clearly, when it comes to profit optimizing, call it the commercials around that, it's that much harder in a difficult market environment. By that, I mean, maybe you introduce volumes into markets which are maybe further away than your core markets, and that has an impact on net delivered price over and above whatever the benchmark price is doing in the local markets. And further to those discussions we had earlier about the FX effect, those sort of things also play into it. So that's very much the focus. And of course, then the cost structure itself needs to be optimized over time because, again, you don't just turn these things on and all the costs are fully optimized. So we are working on those. At the moment, we're working on obviously developing out the commercial offering alongside the technical ramp-up that takes place. But we focus here very much on the paper machines in the converting businesses where, as you know, we've also invested. Again, we're very confident in the technical capacity and the like. Again, it's about making sure you bring that volume into the markets in a sustainable and disciplined way. And that is what we are currently working on at the moment. But very clearly, we're making no bones about the fact that that is a particular challenge in what is this current long downturn and hence the reason we pull down the expectation this year, at least for the earnings contributions from those projects. And then finally, this is a trading update. We're not going to give explicit sort of breakdowns by business segments in terms of the profitability. But having said all that, I mean, as we said, the packaging businesses, the converting businesses are actually flat half on, I mean, sorry, quarter on quarter on a sequential basis, which I think in the current environment is actually awkward for achieving that. At the same time, the paper businesses, yes, sorry, the packaging paper business is not where they should be. But at the same time, one fully understands it in the context of a very difficult market environment. Fine paper, we are aware of the structural challenges. And of course, the current economic downturn has only exacerbated that in the short term. There is intense competition that is putting pressure. And coupled with the pulp prices, which came off, I don't know what it is, somewhere around EUR 200 a tonne over the last couple of few months. Now, it seems as though there's a bit of a floor forming there. And as I'm sure you've seen, some of the bigger Brazilian producers are pushing price increases at the moment. And we'll see how that unfolds over the coming months. So I hope that gives some color. Very good. Well, I think we've taken enough of everyone's time. I just wanted to finish by saying clearly in this current world, we remain relentlessly focused on margin management, on cost optimization, and these continuous improvement initiatives to protect our value today. But importantly, I also want to stress we do remain well positioned to benefit when conditions improve. We have a low-cost asset base, very well invested, a broad product offering, and with our fully integrated business model, this continues to provide resilience even in the current environment and opportunity in the long term. So with that, we remain extremely confident in the long-term sustainable growth fundamentals of our packaging businesses and our ability to deliver for shareholders. So with that, I thank you very much for your attention. If there's any other questions during the day, please feel free to reach out to the team who are available throughout the day. Thank you very much, and we'll close the call then.

Speaker 10: Good morning, everyone, and thank you for joining today's call at short notice. As said, I'm Andrew King, Group CEO, and with me is Mike Powell, our Group CFO. As you all have seen from our statement, the challenging market environment we spoke about at our half-year results in July has continued through the third quarter. This resulted in an underlying EBITDA of EUR 223 million for the quarter. Across the period, we saw subdued market demand impacting sales volumes in the upstream pulp and paper businesses in particular. And since we last reported results at the end of July, we've also seen further pulp and paper price declines across most grades. Our packaging converting operations delivered a stable performance when compared to the prior quarter, despite this difficult backdrop. Challenging trading conditions are expected to persist for the remainder of this year as demand-side confidence remains fragile. Good morning, everyone, and thank you for joining today's call at short notice. good morning everyone and thank you for joining today's call at short notice As said, I'm Andrew King, Group CEO, and with me is Mike Powell, our Group CFO. as said i'm andrew king group ceo and with me is mike powell our group cfo As you all have seen from our statement, the challenging market environment we spoke about at our half-year results in July has continued through the third quarter. as you all have seen from our statement the challenging market environment we spoke about at our half-year results in july has continued through the third quarter This resulted in an underlying EBITDA of EUR 223 million for the quarter. this resulted in an underlying ebitda of eur 223 million for the quarter Across the period, we saw subdued market demand impacting sales volumes in the upstream pulp and paper businesses in particular. across the period we saw subdued market demand impacting sales volumes in the upstream pulp and paper businesses in particular And since we last reported results at the end of July, we've also seen further pulp and paper price declines across most grades. and since we last reported results at the end of july we've also seen further pulp and paper price declines across most grades Our packaging converting operations delivered a stable performance when compared to the prior quarter, despite this difficult backdrop. our packaging converting operations delivered a stable performance when compared to the prior quarter despite this difficult backdrop Challenging trading conditions are expected to persist for the remainder of this year as demand-side confidence remains fragile. challenging trading conditions are expected to persist for the remainder of this year as demand-side confidence remains fragile Furthermore, key markets remain in oversupply, and current selling prices are lower than the third-quarter averages. While we remain confident in the structural drivers underpinning through-cycle growth in our packaging solutions, we are equally cognizant of the impact of the current prolonged cyclical downturn on near-term performance. In response, we have intensified our focus on operational efficiency, cost control, and cash generation, mitigating the impact of the current softer markets while ensuring we are well-positioned to capture growth and deliver enhanced returns when favorable conditions return. In this context, in the six months since completing the acquisition of Schumacher, we have identified an additional EUR 10 million across synergies, taking the total identified synergies to EUR 32 million. Furthermore, key markets remain in oversupply, and current selling prices are lower than the third-quarter averages. furthermore key markets remain in oversupply and current selling prices are lower than the third-quarter averages While we remain confident in the structural drivers underpinning through-cycle growth in our packaging solutions, we are equally cognizant of the impact of the current prolonged cyclical downturn on near-term performance. while we remain confident in the structural drivers underpinning through-cycle growth in our packaging solutions we are equally cognizant of the impact of the current prolonged cyclical downturn on near-term performance In response, we have intensified our focus on operational efficiency, cost control, and cash generation, mitigating the impact of the current softer markets while ensuring we are well-positioned to capture growth and deliver enhanced returns when favorable conditions return. in response we have intensified our focus on operational efficiency cost control and cash generation mitigating the impact of the current softer markets while ensuring we are well-positioned to capture growth and deliver enhanced returns when favorable conditions return In this context, in the six months since completing the acquisition of Schumacher, we have identified an additional EUR 10 million across synergies, taking the total identified synergies to EUR 32 million. in this context in the six months since completing the acquisition of schumacher we have identified an additional eur 10 million across synergies taking the total identified synergies to eur 32 million As a further step to streamline our organization, facilitate cost takeout, and drive synergies across our pulp and paper businesses in particular, we are combining our uncoated fine paper business with our corrugated packaging business unit. Going forward, then, we'll be organized into two business units: the enlarged corrugated packaging and flexible packaging, which remains unchanged. All our capacity expansion projects are ramping up, and we remain confident that they are cost-competitive, deliver significant integration benefits, and once fully optimized, will deliver mid-teen, mid-cycle returns. However, near-term profitability is heavily influenced by prevailing market conditions, meaning the net incremental contribution to full-year 2025 EBITDA is now expected to be around EUR 30 million. We are ensuring that all ongoing capital expenditure is focused on stay-in-business CapEx and cost optimization opportunities. As a further step to streamline our organization, facilitate cost takeout, and drive synergies across our pulp and paper businesses in particular, we are combining our uncoated fine paper business with our corrugated packaging business unit. as a further step to streamline our organization facilitate cost takeout and drive synergies across our pulp and paper businesses in particular we are combining our uncoated fine paper business with our corrugated packaging business unit Going forward, then, we'll be organized into two business units: the enlarged corrugated packaging and flexible packaging, which remains unchanged. going forward then we'll be organized into two business units the enlarged corrugated packaging and flexible packaging which remains unchanged All our capacity expansion projects are ramping up, and we remain confident that they are cost-competitive, deliver significant integration benefits, and once fully optimized, will deliver mid-teen, mid-cycle returns. all our capacity expansion projects are ramping up and we remain confident that they are cost-competitive deliver significant integration benefits and once fully optimized will deliver mid-teen mid-cycle returns However, near-term profitability is heavily influenced by prevailing market conditions, meaning the net incremental contribution to full-year 2025 EBITDA is now expected to be around EUR 30 million. however near-term profitability is heavily influenced by prevailing market conditions meaning the net incremental contribution to full-year 2025 ebitda is now expected to be around eur 30 million We are ensuring that all ongoing capital expenditure is focused on stay-in-business CapEx and cost optimization opportunities. we are ensuring that all ongoing capital expenditure is focused on stay-in-business capex and cost optimization opportunities As you will know, the remaining major capacity expansion project we have been working on is the new Sack Kraft Paper Machine at our Hinton Mill in Canada. We have decided to put this project on hold, but we retain the full optionality to invest when market conditions improve. We are confident these steps will enable us to navigate current headwinds, build a stronger, more efficient operating platform, and drive free cash flow. This will protect value today and enhance returns when market conditions improve. With that short introduction, I'm happy to take questions. Mike and I are both here to take questions, so we'll hand back to the operator. Thank you. As you will know, the remaining major capacity expansion project we have been working on is the new Sack Kraft Paper Machine at our Hinton Mill in Canada. as you will know the remaining major capacity expansion project we have been working on is the new sack kraft paper machine at our hinton mill in canada We have decided to put this project on hold, but we retain the full optionality to invest when market conditions improve. we have decided to put this project on hold but we retain the full optionality to invest when market conditions improve We are confident these steps will enable us to navigate current headwinds, build a stronger, more efficient operating platform, and drive free cash flow. we are confident these steps will enable us to navigate current headwinds build a stronger more efficient operating platform and drive free cash flow This will protect value today and enhance returns when market conditions improve. this will protect value today and enhance returns when market conditions improve With that short introduction, I'm happy to take questions. with that short introduction i'm happy to take questions Mike and I are both here to take questions, so we'll hand back to the operator. mike and i are both here to take questions so we'll hand back to the operator Thank you. thank you

Speaker 4: Thank you. Just a reminder, our audience, please, if you wish to ask a question, use the raise hand function, invite it, unmute, and ask your question for live. Our first question for you comes from Charlie Muir-Sands. Charlie, please unmute and go ahead and ask your question. Thank you. thank you Just a reminder, our audience, please, if you wish to ask a question, use the raise hand function, invite it, unmute, and ask your question for live. just a reminder our audience please if you wish to ask a question use the raise hand function invite it unmute and ask your question for live Our first question for you comes from Charlie Muir-Sands. our first question for you comes from charlie muir-sands Charlie, please unmute and go ahead and ask your question. charlie please unmute and go ahead and ask your question

Speaker 9: Good morning, guys. Can you hear me okay? Good morning, guys. good morning guys Can you hear me okay? can you hear me okay

Speaker 10: We can. Thank you, Charlie. We can. we can Thank you, Charlie. thank you charlie

Speaker 9: Great. Yeah, thank you very much for taking my questions, so I had two, please. Firstly, you talk about increased focus on cost and actions in that regard. I just wondered at this stage whether you had any particular program in mind and whether there was going to be any specific quantum of additional cost savings that you would be aiming to target and if there would be any kind of one-time charges in order to implement those changes, and then the second question relates to the weakness of demand. I think you said demand in your packaging operations was stable, so it sounds like it's weakness in, you obviously mentioned pulp and paper, but also sort of packaging materials, packaging papers themselves. Great. great Yeah, thank you very much for taking my questions, so I had two, please. yeah thank you very much for taking my questions so i had two please Firstly, you talk about increased focus on cost and actions in that regard. firstly you talk about increased focus on cost and actions in that regard I just wondered at this stage whether you had any particular program in mind and whether there was going to be any specific quantum of additional cost savings that you would be aiming to target and if there would be any kind of one-time charges in order to implement those changes, and then the second question relates to the weakness of demand. i just wondered at this stage whether you had any particular program in mind and whether there was going to be any specific quantum of additional cost savings that you would be aiming to target and if there would be any kind of one-time charges in order to implement those changes and then the second question relates to the weakness of demand I think you said demand in your packaging operations was stable, so it sounds like it's weakness in, you obviously mentioned pulp and paper, but also sort of packaging materials, packaging papers themselves. i think you said demand in your packaging operations was stable so it sounds like it's weakness in you obviously mentioned pulp and paper but also sort of packaging materials packaging papers themselves So do you get the sense that there was an element of destocking amongst your customer base going on, or are they exposed to end markets which are different to your own converting operations and therefore there's sort of uneven weakness out there? Thank you. So do you get the sense that there was an element of destocking amongst your customer base going on, or are they exposed to end markets which are different to your own converting operations and therefore there's sort of uneven weakness out there? so do you get the sense that there was an element of destocking amongst your customer base going on or are they exposed to end markets which are different to your own converting operations and therefore there's sort of uneven weakness out there Thank you. thank you

Speaker 10: Thanks, Charlie. On the first question, so clearly we have a philosophy around continuous improvement. That being said, clearly at times like this one looks to accelerate wherever possible around, call it the cost takeout initiatives. We are working through a number of programs, some of which are very much, call it shop floor-led. Part of the rationale, and we'll talk about it around the reorganization of our business units, is about driving very much a shop floor efficiency and productivity excellence initiative, and simply put, it's easier to run those sort of things out under one umbrella, so we are doing those sort of programs, which of course are somewhat longer term in nature, but we are very confident will continue to take us to the next level of operational efficiency. I think we are good at it, and we can get even better. Thanks, Charlie. thanks charlie On the first question, so clearly we have a philosophy around continuous improvement. on the first question so clearly we have a philosophy around continuous improvement That being said, clearly at times like this one looks to accelerate wherever possible around, call it the cost takeout initiatives. that being said clearly at times like this one looks to accelerate wherever possible around call it the cost takeout initiatives We are working through a number of programs, some of which are very much, call it shop floor-led. we are working through a number of programs some of which are very much call it shop floor-led Part of the rationale, and we'll talk about it around the reorganization of our business units, is about driving very much a shop floor efficiency and productivity excellence initiative, and simply put, it's easier to run those sort of things out under one umbrella, so we are doing those sort of programs, which of course are somewhat longer term in nature, but we are very confident will continue to take us to the next level of operational efficiency. part of the rationale and we'll talk about it around the reorganization of our business units is about driving very much a shop floor efficiency and productivity excellence initiative and simply put it's easier to run those sort of things out under one umbrella so we are doing those sort of programs which of course are somewhat longer term in nature but we are very confident will continue to take us to the next level of operational efficiency I think we are good at it, and we can get even better. i think we are good at it and we can get even better It doesn't per se mean any one-off costs associated with that. Clearly, to the extent we look at any further cost takeout opportunities, there might be some one-off costs involved, but those are difficult to quantify at this stage, and we are working through those programs at the moment. On your question on the demand side softness, I think it can't all be ascribed to destocking. So you're right in that the converting business has held up pretty well from a profitability perspective. But undoubtedly, there's a fight for share in those markets where demand, it's not, as I say, it's not falling off a cliff or anything like that. It's just been grinding along in a very subdued manner. And that has caused intense competition, and of course, that has impacts on margins. It doesn't per se mean any one-off costs associated with that. it doesn't per se mean any one-off costs associated with that Clearly, to the extent we look at any further cost takeout opportunities, there might be some one-off costs involved, but those are difficult to quantify at this stage, and we are working through those programs at the moment. clearly to the extent we look at any further cost takeout opportunities there might be some one-off costs involved but those are difficult to quantify at this stage and we are working through those programs at the moment On your question on the demand side softness, I think it can't all be ascribed to destocking. on your question on the demand side softness i think it can't all be ascribed to destocking So you're right in that the converting business has held up pretty well from a profitability perspective. so you're right in that the converting business has held up pretty well from a profitability perspective But undoubtedly, there's a fight for share in those markets where demand, it's not, as I say, it's not falling off a cliff or anything like that. but undoubtedly there's a fight for share in those markets where demand it's not as i say it's not falling off a cliff or anything like that It's just been grinding along in a very subdued manner. it's just been grinding along in a very subdued manner And that has caused intense competition, and of course, that has impacts on margins. and that has caused intense competition and of course that has impacts on margins But volumes are okay, but certainly not in any kind of rebound phase at this stage on the demand side at the underlying converting level. Where we are seeing softness, of course, is that translates across the value chain and up into the paper businesses. So we have been taking some downtime in our paper businesses, which of course has big profit implications because you're carrying a big fixed cost base. But that is a necessary response to what remains a very subdued demand-side environment and clearly coupled in certain cases by oversupply problems with big capacity expansions, particularly the recycled container space, as everyone is well aware. So it's really that combination, but I wouldn't put it down to a destocking effect. I think it is a general market softness throughout the value chain. But volumes are okay, but certainly not in any kind of rebound phase at this stage on the demand side at the underlying converting level. but volumes are okay but certainly not in any kind of rebound phase at this stage on the demand side at the underlying converting level Where we are seeing softness, of course, is that translates across the value chain and up into the paper businesses. where we are seeing softness of course is that translates across the value chain and up into the paper businesses So we have been taking some downtime in our paper businesses, which of course has big profit implications because you're carrying a big fixed cost base. so we have been taking some downtime in our paper businesses which of course has big profit implications because you're carrying a big fixed cost base But that is a necessary response to what remains a very subdued demand-side environment and clearly coupled in certain cases by oversupply problems with big capacity expansions, particularly the recycled container space, as everyone is well aware. but that is a necessary response to what remains a very subdued demand-side environment and clearly coupled in certain cases by oversupply problems with big capacity expansions particularly the recycled container space as everyone is well aware So it's really that combination, but I wouldn't put it down to a destocking effect. so it's really that combination but i wouldn't put it down to a destocking effect I think it is a general market softness throughout the value chain. i think it is a general market softness throughout the value chain

Speaker 4: Thank you. Our next question is from Lars Kjellberg at Stifel. Lars, please unmute and go ahead and ask your question. Thank you. thank you Our next question is from Lars Kjellberg at Stifel. our next question is from lars kjellberg at stifel Lars, please unmute and go ahead and ask your question. lars please unmute and go ahead and ask your question

Speaker 8: Yeah, thank you for taking my question. I just want to come back a bit just to understand what you said about demand. Did you see a sequential weakening market in the third quarter versus Q2? Second question is about the maintenance shuts you talked about extending them, but can you give us a sense of, call it the maintenance costs in the quarter and what you expect to have on the balance of the year? Also, FX, does that play a role here? There's been some significant movements, of course, and the dollar has been particularly weak. Does that play a role? And the final question is about the restructuring that you're talking about of merging the fine paper business with the sort of corrugated packaging business. Yeah, thank you for taking my question. yeah thank you for taking my question I just want to come back a bit just to understand what you said about demand. i just want to come back a bit just to understand what you said about demand Did you see a sequential weakening market in the third quarter versus Q2? did you see a sequential weakening market in the third quarter versus q2 Second question is about the maintenance shuts you talked about extending them, but can you give us a sense of, call it the maintenance costs in the quarter and what you expect to have on the balance of the year? second question is about the maintenance shuts you talked about extending them but can you give us a sense of call it the maintenance costs in the quarter and what you expect to have on the balance of the year Also, FX, does that play a role here? also fx does that play a role here There's been some significant movements, of course, and the dollar has been particularly weak. there's been some significant movements of course and the dollar has been particularly weak Does that play a role? does that play a role And the final question is about the restructuring that you're talking about of merging the fine paper business with the sort of corrugated packaging business. and the final question is about the restructuring that you're talking about of merging the fine paper business with the sort of corrugated packaging business I guess there is some overlap at Ružomberok and Richards Bay, but from the outside, of course, that reduces the visibility in your earnings space. So what are the real benefits from bringing those two businesses together? I guess there is some overlap at Ružomberok and Richards Bay, but from the outside, of course, that reduces the visibility in your earnings space. i guess there is some overlap at ružomberok and richards bay but from the outside of course that reduces the visibility in your earnings space So what are the real benefits from bringing those two businesses together? so what are the real benefits from bringing those two businesses together

Speaker 6: Thanks, Lars. Let me start with your second and third question on maintenance and FX. So on maintenance, we have extended the shuts due to the subdued demand situation. At the half-year, I guided there would be about EUR 40 million in Q3 and EUR 40 million in Q4. We took about EUR 50 million in Q3, and I'd expect the same roughly number in Q4. So maintenance shuts up 10 in both quarters. In terms of FX, yeah, the dollar continues, as you say. It's probably, again, in the round, probably EUR 5 million. It's always a difficult number because we sell in a number of currencies that are sort of dollar-pegged. So the bigger issue is the wider economic impact of the dollar and the economic policies behind it. But in the quarter, it's probably a EUR 5 million impact. Thanks, Lars. thanks lars Let me start with your second and third question on maintenance and FX. let me start with your second and third question on maintenance and fx So on maintenance, we have extended the shuts due to the subdued demand situation. so on maintenance we have extended the shuts due to the subdued demand situation At the half-year, I guided there would be about EUR 40 million in Q3 and EUR 40 million in Q4. at the half-year i guided there would be about eur 40 million in q3 and eur 40 million in q4 We took about EUR 50 million in Q3, and I'd expect the same roughly number in Q4. we took about eur 50 million in q3 and i'd expect the same roughly number in q4 So maintenance shuts up 10 in both quarters. so maintenance shuts up 10 in both quarters In terms of FX, yeah, the dollar continues, as you say. in terms of fx yeah the dollar continues as you say It's probably, again, in the round, probably EUR 5 million. it's probably again in the round probably eur 5 million It's always a difficult number because we sell in a number of currencies that are sort of dollar-pegged. it's always a difficult number because we sell in a number of currencies that are sort of dollar-pegged So the bigger issue is the wider economic impact of the dollar and the economic policies behind it. so the bigger issue is the wider economic impact of the dollar and the economic policies behind it But in the quarter, it's probably a EUR 5 million impact. but in the quarter it's probably a eur 5 million impact As I say, it's quite a difficult number to really pin down, but it's of that order, Lars. As I say, it's quite a difficult number to really pin down, but it's of that order, Lars. as i say it's quite a difficult number to really pin down but it's of that order lars

Speaker 10: Yeah, and I'll just add on the currency story, Lars. I mean, clearly it has a bigger impact in a softer demand environment because invariably what happens is to the extent your core home markets are softer, that invariably means you typically export a bit more. And of course, exporting into a weaker dollar pricing has negative mix effects. So it is an important driver in that context, probably more so than the straight transactional exposures that Mike referred to. Yeah, and I'll just add on the currency story, Lars. yeah and i'll just add on the currency story lars I mean, clearly it has a bigger impact in a softer demand environment because invariably what happens is to the extent your core home markets are softer, that invariably means you typically export a bit more. i mean clearly it has a bigger impact in a softer demand environment because invariably what happens is to the extent your core home markets are softer that invariably means you typically export a bit more And of course, exporting into a weaker dollar pricing has negative mix effects. and of course exporting into a weaker dollar pricing has negative mix effects So it is an important driver in that context, probably more so than the straight transactional exposures that Mike referred to. so it is an important driver in that context probably more so than the straight transactional exposures that mike referred to

Speaker 6: Just in terms of your first question on the demand-side weakness, how much does it look sequentially? I mean, firstly, very clearly, as you could imagine, it's only just the beginning of October. We don't have all the industry numbers, so it's always dangerous to just quote our numbers in isolation because, of course, we don't know how the market shares and the like have been moving over this period. Just in terms of your first question on the demand-side weakness, how much does it look sequentially? just in terms of your first question on the demand-side weakness how much does it look sequentially I mean, firstly, very clearly, as you could imagine, it's only just the beginning of October. i mean firstly very clearly as you could imagine it's only just the beginning of october We don't have all the industry numbers, so it's always dangerous to just quote our numbers in isolation because, of course, we don't know how the market shares and the like have been moving over this period. we don't have all the industry numbers so it's always dangerous to just quote our numbers in isolation because of course we don't know how the market shares and the like have been moving over this period I don't suggest it's got materially worse, particularly in the packaging side. It just hasn't got better, and I think July was a relatively weak month for the industry. If you look at the industry stats, as I said, I don't think we've got August and September yet. They haven't been published, so simply put, we don't know exactly what the industry numbers look like, but I would just suggest that there's been this continued weakness on the corrugated side, which hasn't got worse, just hasn't got better. Fine paper, clearly, I think you saw a sharp decline in demand over the first half. That certainly hasn't recovered into the second half. I don't suggest it's got materially worse, particularly in the packaging side. i don't suggest it's got materially worse particularly in the packaging side It just hasn't got better, and I think July was a relatively weak month for the industry. it just hasn't got better and i think july was a relatively weak month for the industry If you look at the industry stats, as I said, I don't think we've got August and September yet. if you look at the industry stats as i said i don't think we've got august and september yet They haven't been published, so simply put, we don't know exactly what the industry numbers look like, but I would just suggest that there's been this continued weakness on the corrugated side, which hasn't got worse, just hasn't got better. they haven't been published so simply put we don't know exactly what the industry numbers look like but i would just suggest that there's been this continued weakness on the corrugated side which hasn't got worse just hasn't got better Fine paper, clearly, I think you saw a sharp decline in demand over the first half. fine paper clearly i think you saw a sharp decline in demand over the first half That certainly hasn't recovered into the second half. that certainly hasn't recovered into the second half And frankly, there's an intense fight for share in a shrinking market that's taking place at the moment, exacerbated by the weak pulp price because, of course, the weak pulp price flattens out the cost curve, gives more oxygen to the higher cost unintegrated producers. And that is now translating into margin pressures with both pulp prices having come down. We're going to be exposed directly to that with the long pulp position, but also the impact it's having on paper prices. And frankly, there's an intense fight for share in a shrinking market that's taking place at the moment, exacerbated by the weak pulp price because, of course, the weak pulp price flattens out the cost curve, gives more oxygen to the higher cost unintegrated producers. and frankly there's an intense fight for share in a shrinking market that's taking place at the moment exacerbated by the weak pulp price because of course the weak pulp price flattens out the cost curve gives more oxygen to the higher cost unintegrated producers And that is now translating into margin pressures with both pulp prices having come down. and that is now translating into margin pressures with both pulp prices having come down We're going to be exposed directly to that with the long pulp position, but also the impact it's having on paper prices. we're going to be exposed directly to that with the long pulp position but also the impact it's having on paper prices

Speaker 10: And then in Kraft paper, again, if you look at the underlying bag demand, it's okay. Kraft paper demand in the first half was quite weak, and I think that's continued into the second half. And again, that is now putting pressure on pricing. And that probably is, call it the new news relative to what we've seen at the half-year. And then in Kraft paper, again, if you look at the underlying bag demand, it's okay. and then in kraft paper again if you look at the underlying bag demand it's okay Kraft paper demand in the first half was quite weak, and I think that's continued into the second half. kraft paper demand in the first half was quite weak and i think that's continued into the second half And again, that is now putting pressure on pricing. and again that is now putting pressure on pricing And that probably is, call it the new news relative to what we've seen at the half-year. and that probably is call it the new news relative to what we've seen at the half-year Sorry. Sorry. sorry And then your last point on the reorganization of the business units, I appreciate there's the external reporting issues there, but very clearly, we report as we run the business. We've run on a value chain basis, and we think that that's appropriate because that gives the necessary customer focus, the necessary speed and response of innovation and development. And we've got a lot of exciting work that we are doing in that regard and will continue to do. But at the same time, we recognize that having our pulp and paper operations in three different business units adds a degree of complexity. And the reality is the two biggest operations in uncoated fine paper are mixed-use mills. It's Ružomberok in Slovakia, which produces both containerboard and fine paper. And it's Richards Bay in South Africa, which is actually not even a fine paper mill. And then your last point on the reorganization of the business units, I appreciate there's the external reporting issues there, but very clearly, we report as we run the business. and then your last point on the reorganization of the business units i appreciate there's the external reporting issues there but very clearly we report as we run the business We've run on a value chain basis, and we think that that's appropriate because that gives the necessary customer focus, the necessary speed and response of innovation and development. we've run on a value chain basis and we think that that's appropriate because that gives the necessary customer focus the necessary speed and response of innovation and development And we've got a lot of exciting work that we are doing in that regard and will continue to do. and we've got a lot of exciting work that we are doing in that regard and will continue to do But at the same time, we recognize that having our pulp and paper operations in three different business units adds a degree of complexity. but at the same time we recognize that having our pulp and paper operations in three different business units adds a degree of complexity And the reality is the two biggest operations in uncoated fine paper are mixed-use mills. and the reality is the two biggest operations in uncoated fine paper are mixed-use mills It's Ružomberok in Slovakia, which produces both containerboard and fine paper. it's ružomberok in slovakia which produces both containerboard and fine paper And it's Richards Bay in South Africa, which is actually not even a fine paper mill. and it's richards bay in south africa which is actually not even a fine paper mill It's pulp and containerboard. Frankly, it makes sense to run those under one system combined with the big containerboard operations, obviously Świecie being the flagship there, Duino, Kuopio, and the others. So it really facilitates, frankly, from an operational perspective, driving best practice across our pulp and paper mills. As I say, we are implementing at the moment a shop floor operating system. And I think that exercise in itself showed up some of the additional complexities we had by having, as I say, those mills in different business units. And this simply allows us to be much more efficient in driving those processes, driving our businesses to the next level of operational excellence. So that is the motivation behind it. Obviously, that also allows some streamlining of the corporate overhead and ensuring that we really do get faster and more agile than we've been before. It's pulp and containerboard. it's pulp and containerboard Frankly, it makes sense to run those under one system combined with the big containerboard operations, obviously Świecie being the flagship there, Duino, Kuopio, and the others. frankly it makes sense to run those under one system combined with the big containerboard operations obviously świecie being the flagship there duino kuopio and the others So it really facilitates, frankly, from an operational perspective, driving best practice across our pulp and paper mills. so it really facilitates frankly from an operational perspective driving best practice across our pulp and paper mills As I say, we are implementing at the moment a shop floor operating system. as i say we are implementing at the moment a shop floor operating system And I think that exercise in itself showed up some of the additional complexities we had by having, as I say, those mills in different business units. and i think that exercise in itself showed up some of the additional complexities we had by having as i say those mills in different business units And this simply allows us to be much more efficient in driving those processes, driving our businesses to the next level of operational excellence. and this simply allows us to be much more efficient in driving those processes driving our businesses to the next level of operational excellence So that is the motivation behind it. so that is the motivation behind it Obviously, that also allows some streamlining of the corporate overhead and ensuring that we really do get faster and more agile than we've been before. obviously that also allows some streamlining of the corporate overhead and ensuring that we really do get faster and more agile than we've been before So it's for all of those reasons that we are combining those two businesses in this reorganization. And you've got all the history of the two businesses. Simply put, if you add those two numbers together, you get the combined business. So it's very easy to compare historic performance versus what we'll be reporting on going forward. And just to add finally to that, clearly, the direction of travel for our growth is in our packaging businesses, and that's where we invest in for growth, and that's where we'll continue to do so. So those are the reasons we did it. I appreciate that has a reporting implication, but no doubt Mike and Fiona will help you understand the respective numbers there. So it's for all of those reasons that we are combining those two businesses in this reorganization. so it's for all of those reasons that we are combining those two businesses in this reorganization And you've got all the history of the two businesses. and you've got all the history of the two businesses Simply put, if you add those two numbers together, you get the combined business. simply put if you add those two numbers together you get the combined business So it's very easy to compare historic performance versus what we'll be reporting on going forward. so it's very easy to compare historic performance versus what we'll be reporting on going forward And just to add finally to that, clearly, the direction of travel for our growth is in our packaging businesses, and that's where we invest in for growth, and that's where we'll continue to do so. and just to add finally to that clearly the direction of travel for our growth is in our packaging businesses and that's where we invest in for growth and that's where we'll continue to do so So those are the reasons we did it. so those are the reasons we did it I appreciate that has a reporting implication, but no doubt Mike and Fiona will help you understand the respective numbers there. i appreciate that has a reporting implication but no doubt mike and fiona will help you understand the respective numbers there Thank you, Lars. Operator. Thank you, Lars. thank you lars Operator. operator

Speaker 9: Thank you. Our next raised hand is from Brian Morgan at RMB Morgan Stanley. Brian, please unmute and go ahead. Thank you. thank you Our next raised hand is from Brian Morgan at RMB Morgan Stanley. our next raised hand is from brian morgan at rmb morgan stanley Brian, please unmute and go ahead. brian please unmute and go ahead

Speaker 2: Hi guys. Thanks very much for the time. Two questions, if I may. Andrew, in the past, we've spoken about Kraftliner imports coming in from the U.S., typically when the dollar's weaker. Are you seeing that this time? Hi guys. hi guys Thanks very much for the time. thanks very much for the time Two questions, if I may. two questions if i may Andrew, in the past, we've spoken about Kraftliner imports coming in from the U.S., typically when the dollar's weaker. andrew in the past we've spoken about kraftliner imports coming in from the u.s typically when the dollar's weaker Are you seeing that this time? are you seeing that this time

Speaker 10: Yes and no. So there definitely, as you say, there typically is some Kraftliner coming from the U.S. most of the time. You would have expected maybe more with the current dollar weakness, but in a sense, I think that is not happening simply because the positive on that side is really the closures in the U.S. I think it tightened up the U.S. market. And rightly, I think most of the U.S. producers saw exports as not being where you should sort of structurally position yourself. And so I suspect a lot of the capacity reductions have targeted reducing their reliance on exports. And that's probably manifesting in the fact that despite the weaker dollar, you're not really seeing a big surge of imports that you might have expected in a different world. Yes and no. yes and no So there definitely, as you say, there typically is some Kraftliner coming from the U.S. most of the time. so there definitely as you say there typically is some kraftliner coming from the u.s most of the time You would have expected maybe more with the current dollar weakness, but in a sense, I think that is not happening simply because the positive on that side is really the closures in the U.S. you would have expected maybe more with the current dollar weakness but in a sense i think that is not happening simply because the positive on that side is really the closures in the u.s I think it tightened up the U.S. market. i think it tightened up the u.s market And rightly, I think most of the U.S. producers saw exports as not being where you should sort of structurally position yourself. and rightly i think most of the u.s producers saw exports as not being where you should sort of structurally position yourself And so I suspect a lot of the capacity reductions have targeted reducing their reliance on exports. and so i suspect a lot of the capacity reductions have targeted reducing their reliance on exports And that's probably manifesting in the fact that despite the weaker dollar, you're not really seeing a big surge of imports that you might have expected in a different world. and that's probably manifesting in the fact that despite the weaker dollar you're not really seeing a big surge of imports that you might have expected in a different world

Speaker 2: That's good. Thank you, Andrew. And then the question is on dividend, if I may. So quite a bad free cash flow negative situation this year, obviously with all the projects that you spent on, and I suppose they're all in the rearview mirror now. Is the dividend from last year still intact, or should we be thinking about a lower dividend year on year? That's good. that's good Thank you, Andrew. thank you andrew And then the question is on dividend, if I may. and then the question is on dividend if i may So quite a bad free cash flow negative situation this year, obviously with all the projects that you spent on, and I suppose they're all in the rearview mirror now. so quite a bad free cash flow negative situation this year obviously with all the projects that you spent on and i suppose they're all in the rearview mirror now Is the dividend from last year still intact, or should we be thinking about a lower dividend year on year? is the dividend from last year still intact or should we be thinking about a lower dividend year on year

Speaker 6: No, Brian, I mean, I think you said at the half-year, we always look at the dividend at the end of the year as a board. We'll do that again. Clearly, you've seen in the release and Andrew's commented about the focus on cash, the CapEx number for FY26, at least the guidance I've given out, and you've also heard us talk about Hinton today, which clearly means that that cash that might have been penciled in for FY27 isn't going to flow out now, and clearly, the internal focus is very much around cash delivery, so I think we'll look at it in the round as we always do. We've got a good balance sheet still. Clearly, the net debt is the controllable to some extent, and the big dollar moves around, as we've seen over the last, frankly, three to four years. No, Brian, I mean, I think you said at the half-year, we always look at the dividend at the end of the year as a board. no brian i mean i think you said at the half-year we always look at the dividend at the end of the year as a board We'll do that again. we'll do that again Clearly, you've seen in the release and Andrew's commented about the focus on cash, the CapEx number for FY26, at least the guidance I've given out, and you've also heard us talk about Hinton today, which clearly means that that cash that might have been penciled in for FY27 isn't going to flow out now, and clearly, the internal focus is very much around cash delivery, so I think we'll look at it in the round as we always do. clearly you've seen in the release and andrew's commented about the focus on cash the capex number for fy26 at least the guidance i've given out and you've also heard us talk about hinton today which clearly means that that cash that might have been penciled in for fy27 isn't going to flow out now and clearly the internal focus is very much around cash delivery so i think we'll look at it in the round as we always do We've got a good balance sheet still. we've got a good balance sheet still Clearly, the net debt is the controllable to some extent, and the big dollar moves around, as we've seen over the last, frankly, three to four years. clearly the net debt is the controllable to some extent and the big dollar moves around as we've seen over the last frankly three to four years Our job is to, as you say, focus on that free cash and the capital allocation within it, and for the dividend, we'll have a look at it at the end of the year. It's an important part of our capital stack, but we'll clearly have a look where the economy is towards the end of middle of February, probably. Our job is to, as you say, focus on that free cash and the capital allocation within it, and for the dividend, we'll have a look at it at the end of the year. our job is to as you say focus on that free cash and the capital allocation within it and for the dividend we'll have a look at it at the end of the year It's an important part of our capital stack, but we'll clearly have a look where the economy is towards the end of middle of February, probably. it's an important part of our capital stack but we'll clearly have a look where the economy is towards the end of middle of february probably

Speaker 2: Thanks, Mike. Thanks, Mike. thanks mike

Speaker 10: Very importantly, as Mike says on the CapEx, we in a way have the luxury of being able to pull back without mortgaging the upside that we are confident will come. But clearly, in the here and now, the focus is very much on staying in business, CapEx, cost optimization, but clearly, the capacity is in. It's now about fully utilizing it. Very importantly, as Mike says on the CapEx, we in a way have the luxury of being able to pull back without mortgaging the upside that we are confident will come. very importantly as mike says on the capex we in a way have the luxury of being able to pull back without mortgaging the upside that we are confident will come But clearly, in the here and now, the focus is very much on staying in business, CapEx, cost optimization, but clearly, the capacity is in. but clearly in the here and now the focus is very much on staying in business capex cost optimization but clearly the capacity is in It's now about fully utilizing it. it's now about fully utilizing it

Speaker 2: Thanks, Andrew. Thanks, Andrew. thanks andrew

Speaker 10: Very good. Thank you. Very good. very good Thank you. very good thank you

Speaker 4: Thank you. Our next question from Cole Hathorn at Jefferies. Cole, please unmute and go ahead. Thank you. thank you Our next question from Cole Hathorn at Jefferies. our next question from cole hathorn at jefferies Cole, please unmute and go ahead. cole please unmute and go ahead

Speaker 1: Good morning. Thanks for taking the question. Can I just follow up on the major CapEx projects, the guidance now moving down to EUR 30 million contribution? Is there any color you can give on to 2026? And then similarly, I know it's early, but I'm sure you're starting to think about the 2026 year. Could you start talking about some of the positive moving parts in what will be the sequential contributors to EBITDA for 2026 from here? Thank you. Good morning. good morning Thanks for taking the question. thanks for taking the question Can I just follow up on the major CapEx projects, the guidance now moving down to EUR 30 million contribution? can i just follow up on the major capex projects the guidance now moving down to eur 30 million contribution Is there any color you can give on to 2026? is there any color you can give on to 2026 And then similarly, I know it's early, but I'm sure you're starting to think about the 2026 year. and then similarly i know it's early but i'm sure you're starting to think about the 2026 year Could you start talking about some of the positive moving parts in what will be the sequential contributors to EBITDA for 2026 from here? could you start talking about some of the positive moving parts in what will be the sequential contributors to ebitda for 2026 from here Thank you. thank you

Speaker 6: Yeah. Cole, it's Mike. Just on the first one, I mean, it's pretty difficult because, of course, it relates to the second part of your question. I mean, very simply put, if you think of the projects, we're very sort of pleased to where we've got to in terms of the build and the ramp-up. Clearly, the commercial and the pricing is the issue. That's the issue across the whole of the business. And of course, those projects are probably 20% of the capital employed of the group. So they get affected just as the rest of the group does. So it'll depend on the dynamics into 2026, what that number pans out to be. Andrew, do you want to touch on thoughts around next year? Yeah. yeah Cole, it's Mike. cole it's mike Just on the first one, I mean, it's pretty difficult because, of course, it relates to the second part of your question. just on the first one i mean it's pretty difficult because of course it relates to the second part of your question I mean, very simply put, if you think of the projects, we're very sort of pleased to where we've got to in terms of the build and the ramp-up. i mean very simply put if you think of the projects we're very sort of pleased to where we've got to in terms of the build and the ramp-up Clearly, the commercial and the pricing is the issue. clearly the commercial and the pricing is the issue That's the issue across the whole of the business. that's the issue across the whole of the business And of course, those projects are probably 20% of the capital employed of the group. and of course those projects are probably 20% of the capital employed of the group So they get affected just as the rest of the group does. so they get affected just as the rest of the group does So it'll depend on the dynamics into 2026, what that number pans out to be. so it'll depend on the dynamics into 2026 what that number pans out to be Andrew, do you want to touch on thoughts around next year? andrew do you want to touch on thoughts around next year

Speaker 10: Yeah. I think, Cole, I mean, we're in a world which is extremely difficult to predict at the moment. Yeah. yeah I think, Cole, I mean, we're in a world which is extremely difficult to predict at the moment. i think cole i mean we're in a world which is extremely difficult to predict at the moment I think everyone felt that at the beginning of this year, there was some upward momentum. I mean, we were certainly seeing it in the pricing dynamic. We were seeing it in, frankly, the volume dynamic as well. What gives me confidence is we are still seeing good volume growth in our converting businesses, albeit not what we were anticipating earlier this year. And clearly, as always, packaging consumption is a function of the macroeconomic backdrop. And Europe in particular remains very muted. I think the big question is what changes in that regard. And clearly, if one started to see some consumer confidence returning, some manufacturing confidence returning, that can change things quite quickly. But that is clearly the single biggest driver in terms of relative profitability from one thing to the next. I think everyone felt that at the beginning of this year, there was some upward momentum. i think everyone felt that at the beginning of this year there was some upward momentum I mean, we were certainly seeing it in the pricing dynamic. i mean we were certainly seeing it in the pricing dynamic We were seeing it in, frankly, the volume dynamic as well. we were seeing it in frankly the volume dynamic as well What gives me confidence is we are still seeing good volume growth in our converting businesses, albeit not what we were anticipating earlier this year. what gives me confidence is we are still seeing good volume growth in our converting businesses albeit not what we were anticipating earlier this year And clearly, as always, packaging consumption is a function of the macroeconomic backdrop. and clearly as always packaging consumption is a function of the macroeconomic backdrop And Europe in particular remains very muted. and europe in particular remains very muted I think the big question is what changes in that regard. i think the big question is what changes in that regard And clearly, if one started to see some consumer confidence returning, some manufacturing confidence returning, that can change things quite quickly. and clearly if one started to see some consumer confidence returning some manufacturing confidence returning that can change things quite quickly But that is clearly the single biggest driver in terms of relative profitability from one thing to the next. but that is clearly the single biggest driver in terms of relative profitability from one thing to the next We are extremely confident that the structural growth dynamics that underpin our packaging offerings remain very much intact, and we're simply in the middle of what is a very prolonged downturn. I mean, one traces this downturn back to kind of end of 2021 into the middle of 2022 when demand side started to soften, and really, we've been in a very protracted period now of slowdown, so clearly, that is the single biggest driver behind what might impact the year-on-year profitability. We caution that going into Q4, we're not seeing anything on that front at the moment, and so hence, we have to be cautious about the short-term outlook, but again, we are very confident in the medium-term growth dynamic in the packaging businesses that we are well invested in and have exposure to the upside. We are extremely confident that the structural growth dynamics that underpin our packaging offerings remain very much intact, and we're simply in the middle of what is a very prolonged downturn. we are extremely confident that the structural growth dynamics that underpin our packaging offerings remain very much intact and we're simply in the middle of what is a very prolonged downturn I mean, one traces this downturn back to kind of end of 2021 into the middle of 2022 when demand side started to soften, and really, we've been in a very protracted period now of slowdown, so clearly, that is the single biggest driver behind what might impact the year-on-year profitability. i mean one traces this downturn back to kind of end of 2021 into the middle of 2022 when demand side started to soften and really we've been in a very protracted period now of slowdown so clearly that is the single biggest driver behind what might impact the year-on-year profitability We caution that going into Q4, we're not seeing anything on that front at the moment, and so hence, we have to be cautious about the short-term outlook, but again, we are very confident in the medium-term growth dynamic in the packaging businesses that we are well invested in and have exposure to the upside. we caution that going into q4 we're not seeing anything on that front at the moment and so hence we have to be cautious about the short-term outlook but again we are very confident in the medium-term growth dynamic in the packaging businesses that we are well invested in and have exposure to the upside In the short term, clearly, our job is to make sure we do the things we've been talking about around controlling what we can in terms of the driving cost down, driving productivity, and ensuring we are best placed because the world does recover. Clearly, in terms of the long-term bridges, it's very difficult to say at this point. But obviously, as Mike already said, on the CapEx front, it is a function of how the market develops. In addition to the self-help, which will always naturally cover as we ramp these things up, the likes of Duino in particular is very much still in ramp-up with all the costs associated with that. You get a big fixed cost base before you get the full benefits of the volumes coming through. So we still have to optimize all of those sort of investments from a ramp-up perspective. In the short term, clearly, our job is to make sure we do the things we've been talking about around controlling what we can in terms of the driving cost down, driving productivity, and ensuring we are best placed because the world does recover. in the short term clearly our job is to make sure we do the things we've been talking about around controlling what we can in terms of the driving cost down driving productivity and ensuring we are best placed because the world does recover Clearly, in terms of the long-term bridges, it's very difficult to say at this point. clearly in terms of the long-term bridges it's very difficult to say at this point But obviously, as Mike already said, on the CapEx front, it is a function of how the market develops. but obviously as mike already said on the capex front it is a function of how the market develops In addition to the self-help, which will always naturally cover as we ramp these things up, the likes of Duino in particular is very much still in ramp-up with all the costs associated with that. in addition to the self-help which will always naturally cover as we ramp these things up the likes of duino in particular is very much still in ramp-up with all the costs associated with that You get a big fixed cost base before you get the full benefits of the volumes coming through. you get a big fixed cost base before you get the full benefits of the volumes coming through So we still have to optimize all of those sort of investments from a ramp-up perspective. so we still have to optimize all of those sort of investments from a ramp-up perspective And then, of course, we also are doing all the work on the Schumacher integration. You saw the synergy and the cost synergy number. That is the primary big focus at the moment in addition to the commercial ramp-up, which is critical. And yeah, and then going forward, obviously, things like the long-term shuts, etc. As Mike's already said, we extended some of those shuts this year. Clearly, in a better market environment, you wouldn't do that. And off the top of my head, I don't think I can point to any material change in our planning around the actual technical shut component. So yeah, in short, Cole, I know it's a difficult one, but it is a function also of what one sees around the macroeconomic spectrum. And then, of course, we also are doing all the work on the Schumacher integration. and then of course we also are doing all the work on the schumacher integration You saw the synergy and the cost synergy number. you saw the synergy and the cost synergy number That is the primary big focus at the moment in addition to the commercial ramp-up, which is critical. that is the primary big focus at the moment in addition to the commercial ramp-up which is critical And yeah, and then going forward, obviously, things like the long-term shuts, etc. As Mike's already said, we extended some of those shuts this year. and yeah and then going forward obviously things like the long-term shuts etc as mike's already said we extended some of those shuts this year Clearly, in a better market environment, you wouldn't do that. clearly in a better market environment you wouldn't do that And off the top of my head, I don't think I can point to any material change in our planning around the actual technical shut component. and off the top of my head i don't think i can point to any material change in our planning around the actual technical shut component So yeah, in short, Cole, I know it's a difficult one, but it is a function also of what one sees around the macroeconomic spectrum. so yeah in short cole i know it's a difficult one but it is a function also of what one sees around the macroeconomic spectrum

Speaker 1: Andrew, Mike, and then maybe I'll just ask on costs. Is there anything that you're calling out from kind of a cost bucket or wood or anything like that that you can highlight? And then I know demand is something that you can't control, but we have seen across the industry, including all the Nordics players, we've seen some of the smaller guys also extend and take commercial downtime in a lot of their facilities. Do you think we're finally at a point now where the industry just has to close capacity? Andrew, Mike, and then maybe I'll just ask on costs. andrew mike and then maybe i'll just ask on costs Is there anything that you're calling out from kind of a cost bucket or wood or anything like that that you can highlight? is there anything that you're calling out from kind of a cost bucket or wood or anything like that that you can highlight And then I know demand is something that you can't control, but we have seen across the industry, including all the Nordics players, we've seen some of the smaller guys also extend and take commercial downtime in a lot of their facilities. and then i know demand is something that you can't control but we have seen across the industry including all the nordics players we've seen some of the smaller guys also extend and take commercial downtime in a lot of their facilities Do you think we're finally at a point now where the industry just has to close capacity? do you think we're finally at a point now where the industry just has to close capacity

Speaker 6: Yeah. I think was your question on input costs, Cole? I think it was. Yeah. yeah I think was your question on input costs, Cole? i think was your question on input costs cole I think it was. i think it was

Speaker 1: Yes, input costs first. Thank you. Yes, input costs first. yes input costs first Thank you. thank you

Speaker 6: Sorry, I know that's a sort of non-be terminology. Yeah, so on our input costs, it's played out as I expected the half-year. The environment is pretty benign, so pretty flat on input costs, which I think, again, gives you some sign that the economy, particularly around Europe, is flat. We have seen some relief, obviously, on PFR. And I also said at the half that our own initiatives, if you like, to be more competitive and buy better than the competition are coming through. So the second half is panning out as we thought, small positives, but frankly, we'll take those right now. We continue to work hard on it. Andrew. Sorry, I know that's a sort of non-be terminology. sorry i know that's a sort of non-be terminology Yeah, so on our input costs, it's played out as I expected the half-year. yeah so on our input costs it's played out as i expected the half-year The environment is pretty benign, so pretty flat on input costs, which I think, again, gives you some sign that the economy, particularly around Europe, is flat. the environment is pretty benign so pretty flat on input costs which i think again gives you some sign that the economy particularly around europe is flat We have seen some relief, obviously, on PFR. we have seen some relief obviously on pfr And I also said at the half that our own initiatives, if you like, to be more competitive and buy better than the competition are coming through. and i also said at the half that our own initiatives if you like to be more competitive and buy better than the competition are coming through So the second half is panning out as we thought, small positives, but frankly, we'll take those right now. so the second half is panning out as we thought small positives but frankly we'll take those right now We continue to work hard on it. we continue to work hard on it Andrew. andrew

Speaker 10: Yeah. And on the capacity closures, I mean, absolutely, there's huge pressure right now. And frankly, the industry profitability levels more broadly are such that there's every incentive for closures. Yeah. yeah And on the capacity closures, I mean, absolutely, there's huge pressure right now. and on the capacity closures i mean absolutely there's huge pressure right now And frankly, the industry profitability levels more broadly are such that there's every incentive for closures. and frankly the industry profitability levels more broadly are such that there's every incentive for closures Clearly, the one that gets most visibility is recycled containerboard. I know everyone has their own calculations, but you can easily see 30%-40% of the industry right now is cash negative, I would say, in terms of if you look at the cost curve. That is clearly not a sustainable position. As you know, there have been some movements in that regard. I suspect there needs to be more, and there's every incentive for more capacity closures on that front. As you would expect, we always look at our own portfolio in that regard, but I suppose that our operations are well positioned on the cost curve. And also we have a big virgin position, which is a different dynamic. It's not really a cost dynamic, sorry, a supply side dynamic other than the knock-on effect of the overcapacity and recycled containerboard. Clearly, the one that gets most visibility is recycled containerboard. clearly the one that gets most visibility is recycled containerboard I know everyone has their own calculations, but you can easily see 30%-40% of the industry right now is cash negative, I would say, in terms of if you look at the cost curve. i know everyone has their own calculations but you can easily see 30%-40% of the industry right now is cash negative i would say in terms of if you look at the cost curve That is clearly not a sustainable position. that is clearly not a sustainable position As you know, there have been some movements in that regard. as you know there have been some movements in that regard I suspect there needs to be more, and there's every incentive for more capacity closures on that front. i suspect there needs to be more and there's every incentive for more capacity closures on that front As you would expect, we always look at our own portfolio in that regard, but I suppose that our operations are well positioned on the cost curve. as you would expect we always look at our own portfolio in that regard but i suppose that our operations are well positioned on the cost curve And also we have a big virgin position, which is a different dynamic. and also we have a big virgin position which is a different dynamic It's not really a cost dynamic, sorry, a supply side dynamic other than the knock-on effect of the overcapacity and recycled containerboard. it's not really a cost dynamic sorry a supply side dynamic other than the knock-on effect of the overcapacity and recycled containerboard So there's huge incentive for closures. There's every reason to believe there should be more closures. And the longer the situation currently prevails, the greater the pressure there is for those closures to take place. And in other sectors, I would say in this Kraft paper, it's a different dynamic. Clearly, that's a market where you do have the big industrial exposures, which clearly have more cyclical pressures than typical consumer applications. And so there I see it almost purely a demand-side cyclicality issue. At the same time, it's incumbent on us to manage based on what the market is currently doing. We are, as I say, doubling down our efforts around cost and productivity and the like, as you would expect, and responding to the market conditions in the most agile way. So there's huge incentive for closures. so there's huge incentive for closures There's every reason to believe there should be more closures. there's every reason to believe there should be more closures And the longer the situation currently prevails, the greater the pressure there is for those closures to take place. and the longer the situation currently prevails the greater the pressure there is for those closures to take place And in other sectors, I would say in this Kraft paper, it's a different dynamic. and in other sectors i would say in this kraft paper it's a different dynamic Clearly, that's a market where you do have the big industrial exposures, which clearly have more cyclical pressures than typical consumer applications. clearly that's a market where you do have the big industrial exposures which clearly have more cyclical pressures than typical consumer applications And so there I see it almost purely a demand-side cyclicality issue. and so there i see it almost purely a demand-side cyclicality issue At the same time, it's incumbent on us to manage based on what the market is currently doing. at the same time it's incumbent on us to manage based on what the market is currently doing We are, as I say, doubling down our efforts around cost and productivity and the like, as you would expect, and responding to the market conditions in the most agile way. we are as i say doubling down our efforts around cost and productivity and the like as you would expect and responding to the market conditions in the most agile way

Speaker 6: And then maybe finally on the fine paper side, clearly, as I said earlier, the cost curve in Europe has flattened out given the decline in pulp prices. That is still a big factor in your ability to drive margins in the fine paper business in Europe because when pulp prices go down, the high-cost unintegrated producers get some relief. But unfortunately, at the moment, all that that means is there's a competition for, as I say, the smaller market that now exists given the demand-side pressures. So that is also, I think, causing a lot of, or it is undoubtedly causing a lot of margin pressure across the industry. And I wouldn't be surprised to see if there would be more closures on that front as well. So yeah, I think that's in a nutshell where we see it. And then maybe finally on the fine paper side, clearly, as I said earlier, the cost curve in Europe has flattened out given the decline in pulp prices. and then maybe finally on the fine paper side clearly as i said earlier the cost curve in europe has flattened out given the decline in pulp prices That is still a big factor in your ability to drive margins in the fine paper business in Europe because when pulp prices go down, the high-cost unintegrated producers get some relief. that is still a big factor in your ability to drive margins in the fine paper business in europe because when pulp prices go down the high-cost unintegrated producers get some relief But unfortunately, at the moment, all that that means is there's a competition for, as I say, the smaller market that now exists given the demand-side pressures. but unfortunately at the moment all that that means is there's a competition for as i say the smaller market that now exists given the demand-side pressures So that is also, I think, causing a lot of, or it is undoubtedly causing a lot of margin pressure across the industry. so that is also i think causing a lot of or it is undoubtedly causing a lot of margin pressure across the industry And I wouldn't be surprised to see if there would be more closures on that front as well. and i wouldn't be surprised to see if there would be more closures on that front as well So yeah, I think that's in a nutshell where we see it. so yeah i think that's in a nutshell where we see it

Speaker 1: Thanks, All. Thanks, All. thanks all

Speaker 4: Thank you. Thank you. thank you Our next raised hand is from Palav Mittal at Barclays. Palav, please unmute and go ahead. Our next raised hand is from Palav Mittal at Barclays. our next raised hand is from palav mittal at barclays Palav, please unmute and go ahead. palav please unmute and go ahead

Speaker 7: So a couple of questions. If I recall correctly, at the half-year results, you were saying we could potentially see the spread between Kraftliner and Testliner widening. And if I look at the recent indices, Kraftliner actually has been more stable than Testliner over the last few months and has not declined as much. But today, you are talking about declining selling prices. So are you saying that these indices are not capturing the actuals and are lagging behind? So that's the first question. And then secondly, just if you could confirm on your forestry fair value gain for the full year, do you still expect around EUR 60 million, the long-term average for the full year is fair? So a couple of questions. so a couple of questions If I recall correctly, at the half-year results, you were saying we could potentially see the spread between Kraftliner and Testliner widening. if i recall correctly at the half-year results you were saying we could potentially see the spread between kraftliner and testliner widening And if I look at the recent indices, Kraftliner actually has been more stable than Testliner over the last few months and has not declined as much. and if i look at the recent indices kraftliner actually has been more stable than testliner over the last few months and has not declined as much But today, you are talking about declining selling prices. but today you are talking about declining selling prices So are you saying that these indices are not capturing the actuals and are lagging behind? so are you saying that these indices are not capturing the actuals and are lagging behind So that's the first question. so that's the first question And then secondly, just if you could confirm on your forestry fair value gain for the full year, do you still expect around EUR 60 million, the long-term average for the full year is fair? and then secondly just if you could confirm on your forestry fair value gain for the full year do you still expect around eur 60 million the long-term average for the full year is fair

Speaker 6: Yeah, thanks, Palav. Yeah, on the fair value, I mean, that's my best guess today. We booked 20 in Q3. I would expect about 20. It is a variable number, I have to say. Depends on growth rates, oil prices, etc. So as we know from history, it's a pretty volatile number. But sat here today, if everything doesn't change, which in this world is quite a difficult thing to say, I'd expect another 20. But it is a best guess, and it's a volatile number depending on a number of factors which occur at balance sheet date. So it's a spot calculation of the balance sheet. But if you want to plug a number in, plug that in, but it's a variable number. Yeah. Yeah, thanks, Palav. yeah thanks palav Yeah, on the fair value, I mean, that's my best guess today. yeah on the fair value i mean that's my best guess today We booked 20 in Q3. we booked 20 in q3 I would expect about 20. i would expect about 20 It is a variable number, I have to say. it is a variable number i have to say Depends on growth rates, oil prices, etc. So as we know from history, it's a pretty volatile number. depends on growth rates oil prices etc so as we know from history it's a pretty volatile number But sat here today, if everything doesn't change, which in this world is quite a difficult thing to say, I'd expect another 20. but sat here today if everything doesn't change which in this world is quite a difficult thing to say i'd expect another 20 But it is a best guess, and it's a volatile number depending on a number of factors which occur at balance sheet date. but it is a best guess and it's a volatile number depending on a number of factors which occur at balance sheet date So it's a spot calculation of the balance sheet. so it's a spot calculation of the balance sheet But if you want to plug a number in, plug that in, but it's a variable number. but if you want to plug a number in plug that in but it's a variable number Yeah. yeah

Speaker 10: And on the Kraftliner, Testliner spread, I didn't follow the exact end of the question, but I think the question was very much in the face of the Testliner declines, what's been happening with Kraftliner. Yes, the fact is the spread has widened, but at the same time, Kraftliner prices have been coming off. I think if you look at the kind of index data and things like that, you're probably looking at over the last three months, something like EUR 90 a tonne-ish. Testliner price declines, Kraftliner's in the order of kind of EUR 30. And I stress that's the benchmark pricing. I mean, we're not going to obviously give our own pricing. So yes, Kraftliner's held up better than Testliner, as one would expect, given the supply-side dynamics that exist in the two different markets. And on the Kraftliner, Testliner spread, I didn't follow the exact end of the question, but I think the question was very much in the face of the Testliner declines, what's been happening with Kraftliner. and on the kraftliner testliner spread i didn't follow the exact end of the question but i think the question was very much in the face of the testliner declines what's been happening with kraftliner Yes, the fact is the spread has widened, but at the same time, Kraftliner prices have been coming off. yes the fact is the spread has widened but at the same time kraftliner prices have been coming off I think if you look at the kind of index data and things like that, you're probably looking at over the last three months, something like EUR 90 a tonne-ish. i think if you look at the kind of index data and things like that you're probably looking at over the last three months something like eur 90 a tonne-ish Testliner price declines, Kraftliner's in the order of kind of EUR 30. testliner price declines kraftliner's in the order of kind of eur 30 And I stress that's the benchmark pricing. and i stress that's the benchmark pricing I mean, we're not going to obviously give our own pricing. i mean we're not going to obviously give our own pricing So yes, Kraftliner's held up better than Testliner, as one would expect, given the supply-side dynamics that exist in the two different markets. so yes kraftliner's held up better than testliner as one would expect given the supply-side dynamics that exist in the two different markets But at the same time, there is, call it, substitution between the two on the margin. And the supply overhang in Testliner has had some impact on the Kraftliner prices, albeit they are more resilient. And so that's really the dynamic that's played out in the short term on the Testliner-Kraftliner spread. But at the same time, there is, call it, substitution between the two on the margin. but at the same time there is call it substitution between the two on the margin And the supply overhang in Testliner has had some impact on the Kraftliner prices, albeit they are more resilient. and the supply overhang in testliner has had some impact on the kraftliner prices albeit they are more resilient And so that's really the dynamic that's played out in the short term on the Testliner-Kraftliner spread. and so that's really the dynamic that's played out in the short term on the testliner-kraftliner spread

Speaker 7: Okay, thank you. Okay, thank you. okay thank you

Speaker 10: Thanks, Palav. Operator. Thanks, Palav. thanks palav Operator. operator

Speaker 4: Thank you. Our next question is from James Twyman at Prescient Securities. James, please unmute and go ahead. Thank you. thank you Our next question is from James Twyman at Prescient Securities. our next question is from james twyman at prescient securities James, please unmute and go ahead. james please unmute and go ahead

Speaker 3: Yeah, thank you very much for the call. Can I just focus a little on the sack paper business? Prices have been holding up very well. It looks like they were flat in Q3. So I think the new information you're coming out with today seems to be about sack paper prices now starting to fall, which would imply that's more of a Q4 factor. Could you talk around that and whether the fall is sort of marginal, as you're seeing in some of the other paper grades, or whether it is significant for Q4? Thanks. Yeah, thank you very much for the call. yeah thank you very much for the call Can I just focus a little on the sack paper business? can i just focus a little on the sack paper business Prices have been holding up very well. prices have been holding up very well It looks like they were flat in Q3. it looks like they were flat in q3 So I think the new information you're coming out with today seems to be about sack paper prices now starting to fall, which would imply that's more of a Q4 factor. so i think the new information you're coming out with today seems to be about sack paper prices now starting to fall which would imply that's more of a q4 factor Could you talk around that and whether the fall is sort of marginal, as you're seeing in some of the other paper grades, or whether it is significant for Q4? could you talk around that and whether the fall is sort of marginal as you're seeing in some of the other paper grades or whether it is significant for q4 Thanks. thanks

Speaker 6: Thanks, James. Yeah, I mean, as you know, in sack, the indices only come out kind of once a quarter, so you don't see the real live pricing for the latter term. There has been some price erosion through Q3. Again, one has to be careful to generalize because obviously different markets are differently impacted. But there has been some price erosion. I mean, if you look at it from the peak, and as you well know, prices were going up through the first half of the year, and then they've been coming down a little bit in Q3 and then clearly into Q4 as well. From peak to now, it's kind of EUR 30-EUR 50, that order of magnitude price declines. But obviously, the peak was only there for a short period of time. Thanks, James. thanks james Yeah, I mean, as you know, in sack, the indices only come out kind of once a quarter, so you don't see the real live pricing for the latter term. yeah i mean as you know in sack the indices only come out kind of once a quarter so you don't see the real live pricing for the latter term There has been some price erosion through Q3. there has been some price erosion through q3 Again, one has to be careful to generalize because obviously different markets are differently impacted. again one has to be careful to generalize because obviously different markets are differently impacted But there has been some price erosion. but there has been some price erosion I mean, if you look at it from the peak, and as you well know, prices were going up through the first half of the year, and then they've been coming down a little bit in Q3 and then clearly into Q4 as well. i mean if you look at it from the peak and as you well know prices were going up through the first half of the year and then they've been coming down a little bit in q3 and then clearly into q4 as well From peak to now, it's kind of EUR 30-EUR 50, that order of magnitude price declines. from peak to now it's kind of eur 30-eur 50 that order of magnitude price declines But obviously, the peak was only there for a short period of time. but obviously the peak was only there for a short period of time Those indices, they make the market look more stable than it is, particularly in the current environment where clearly pricing is much more dynamic than a typically more stable operating environment. Those indices, they make the market look more stable than it is, particularly in the current environment where clearly pricing is much more dynamic than a typically more stable operating environment. those indices they make the market look more stable than it is particularly in the current environment where clearly pricing is much more dynamic than a typically more stable operating environment

Speaker 3: Thank you very much. If I could just quickly follow up regarding the merger of these two divisions, there must be obviously a reason for it, which must be reducing costs. What sort of scale of costs are you thinking? I mean, my impression must be that it's pretty marginal looking at the assets there. Thank you very much. thank you very much If I could just quickly follow up regarding the merger of these two divisions, there must be obviously a reason for it, which must be reducing costs. if i could just quickly follow up regarding the merger of these two divisions there must be obviously a reason for it which must be reducing costs What sort of scale of costs are you thinking? what sort of scale of costs are you thinking I mean, my impression must be that it's pretty marginal looking at the assets there. i mean my impression must be that it's pretty marginal looking at the assets there

Speaker 10: Yes. Yeah, I think, James, I spoke hopefully at length about the rationale for that reorganization. It's not simply a headline cost takeout thing. It's about driving the operational efficiencies across particularly the pulp and paper operations. As I said, we have the two biggest operations in fine paper are actually mixed use. They essentially report into both business units and simply put, it's much easier for us to run it in a single business unit and drive all the important initiatives around, as I say, shop floor, operational excellence programs, and the like, where clearly there's huge commonality across those different pulp mills because the paper makers would hate me for saying this, but they're taking wood in one end and they produce their paper out the other. One of them is white, the other is brown. Yes. yes Yeah, I think, James, I spoke hopefully at length about the rationale for that reorganization. yeah i think james i spoke hopefully at length about the rationale for that reorganization It's not simply a headline cost takeout thing. it's not simply a headline cost takeout thing It's about driving the operational efficiencies across particularly the pulp and paper operations. it's about driving the operational efficiencies across particularly the pulp and paper operations As I said, we have the two biggest operations in fine paper are actually mixed use. as i said we have the two biggest operations in fine paper are actually mixed use They essentially report into both business units and simply put, it's much easier for us to run it in a single business unit and drive all the important initiatives around, as I say, shop floor, operational excellence programs, and the like, where clearly there's huge commonality across those different pulp mills because the paper makers would hate me for saying this, but they're taking wood in one end and they produce their paper out the other. they essentially report into both business units and simply put it's much easier for us to run it in a single business unit and drive all the important initiatives around as i say shop floor operational excellence programs and the like where clearly there's huge commonality across those different pulp mills because the paper makers would hate me for saying this but they're taking wood in one end and they produce their paper out the other One of them is white, the other is brown. one of them is white the other is brown I don't want to belittle that because, of course, then when you sell it, it's sold into very different channels. And of course, we fully respect that, and we will be continuing to optimize our sales channels into the respective different customer bases. But importantly, I think there's an opportunity for us to simplify the structures to drive a further improvement in our operational excellence, which is clearly the lifeblood of particularly the pulp and paper mills. I don't want to belittle that because, of course, then when you sell it, it's sold into very different channels. i don't want to belittle that because of course then when you sell it it's sold into very different channels And of course, we fully respect that, and we will be continuing to optimize our sales channels into the respective different customer bases. and of course we fully respect that and we will be continuing to optimize our sales channels into the respective different customer bases But importantly, I think there's an opportunity for us to simplify the structures to drive a further improvement in our operational excellence, which is clearly the lifeblood of particularly the pulp and paper mills. but importantly i think there's an opportunity for us to simplify the structures to drive a further improvement in our operational excellence which is clearly the lifeblood of particularly the pulp and paper mills

Speaker 3: Thank you very much. Thank you very much. thank you very much

Speaker 4: Thank you. We now take our final question from Lewis Roxburgh at Goodbody. Louis, please unmute and go ahead. Thank you. thank you We now take our final question from Lewis Roxburgh at Goodbody. we now take our final question from lewis roxburgh at goodbody Louis, please unmute and go ahead. louis please unmute and go ahead

Speaker 5: Morning, guys. Just two questions for me. Just on the capacity ramp-up, just as everything progressing as planned in terms of getting those assets fully operational, just wondering if you're starting to see the efficiencies come through there, are the costs as expected, and maybe some of the benefits of going through this investment under weaker market conditions? And then just secondly, just on the moving parts in Q3, just breaking out the performance of corrugated and flexible packaging and whether that changes anything from a long-term standpoint, particularly in light of the dynamic of oversupply? Thanks. Morning, guys. morning guys Just two questions for me. just two questions for me Just on the capacity ramp-up, just as everything progressing as planned in terms of getting those assets fully operational, just wondering if you're starting to see the efficiencies come through there, are the costs as expected, and maybe some of the benefits of going through this investment under weaker market conditions? just on the capacity ramp-up just as everything progressing as planned in terms of getting those assets fully operational just wondering if you're starting to see the efficiencies come through there are the costs as expected and maybe some of the benefits of going through this investment under weaker market conditions And then just secondly, just on the moving parts in Q3, just breaking out the performance of corrugated and flexible packaging and whether that changes anything from a long-term standpoint, particularly in light of the dynamic of oversupply? and then just secondly just on the moving parts in q3 just breaking out the performance of corrugated and flexible packaging and whether that changes anything from a long-term standpoint particularly in light of the dynamic of oversupply Thanks. thanks

Speaker 10: Yeah, Lewis, just on the capacity, I mean, the sort of technical builds are behind us. Clearly, it always takes, I mean, in the best of worlds, two, three years to optimize the ramp-up of production. Clearly, when it comes to profit optimizing, call it the commercials around that, it's that much harder in a difficult market environment. By that, I mean, maybe you introduce volumes into markets which are maybe further away than your core markets, and that has an impact on net delivered price over and above whatever the benchmark price is doing in the local markets. And further to those discussions we had earlier about the FX effect, those sort of things also play into it. So that's very much the focus. Yeah, Lewis, just on the capacity, I mean, the sort of technical builds are behind us. yeah lewis just on the capacity i mean the sort of technical builds are behind us Clearly, it always takes, I mean, in the best of worlds, two, three years to optimize the ramp-up of production. clearly it always takes i mean in the best of worlds two three years to optimize the ramp-up of production Clearly, when it comes to profit optimizing, call it the commercials around that, it's that much harder in a difficult market environment. clearly when it comes to profit optimizing call it the commercials around that it's that much harder in a difficult market environment By that, I mean, maybe you introduce volumes into markets which are maybe further away than your core markets, and that has an impact on net delivered price over and above whatever the benchmark price is doing in the local markets. by that i mean maybe you introduce volumes into markets which are maybe further away than your core markets and that has an impact on net delivered price over and above whatever the benchmark price is doing in the local markets And further to those discussions we had earlier about the FX effect, those sort of things also play into it. and further to those discussions we had earlier about the fx effect those sort of things also play into it So that's very much the focus. so that's very much the focus And of course, then the cost structure itself needs to be optimized over time because, again, you don't just turn these things on and all the costs are fully optimized. So we are working on those. At the moment, we're working on obviously developing out the commercial offering alongside the technical ramp-up that takes place. But we focus here very much on the paper machines in the converting businesses where, as you know, we've also invested. Again, we're very confident in the technical capacity and the like. Again, it's about making sure you bring that volume into the markets in a sustainable and disciplined way. And that is what we are currently working on at the moment. And of course, then the cost structure itself needs to be optimized over time because, again, you don't just turn these things on and all the costs are fully optimized. and of course then the cost structure itself needs to be optimized over time because again you don't just turn these things on and all the costs are fully optimized So we are working on those. so we are working on those At the moment, we're working on obviously developing out the commercial offering alongside the technical ramp-up that takes place. at the moment we're working on obviously developing out the commercial offering alongside the technical ramp-up that takes place But we focus here very much on the paper machines in the converting businesses where, as you know, we've also invested. but we focus here very much on the paper machines in the converting businesses where as you know we've also invested Again, we're very confident in the technical capacity and the like. again we're very confident in the technical capacity and the like Again, it's about making sure you bring that volume into the markets in a sustainable and disciplined way. again it's about making sure you bring that volume into the markets in a sustainable and disciplined way And that is what we are currently working on at the moment. and that is what we are currently working on at the moment But very clearly, we're making no bones about the fact that that is a particular challenge in what is this current long downturn and hence the reason we pull down the expectation this year, at least for the earnings contributions from those projects. And then finally, this is a trading update. We're not going to give explicit sort of breakdowns by business segments in terms of the profitability. But having said all that, I mean, as we said, the packaging businesses, the converting businesses are actually flat half on, I mean, sorry, quarter on quarter on a sequential basis, which I think in the current environment is actually awkward for achieving that. At the same time, the paper businesses, yes, sorry, the packaging paper business is not where they should be. But at the same time, one fully understands it in the context of a very difficult market environment. But very clearly, we're making no bones about the fact that that is a particular challenge in what is this current long downturn and hence the reason we pull down the expectation this year, at least for the earnings contributions from those projects. but very clearly we're making no bones about the fact that that is a particular challenge in what is this current long downturn and hence the reason we pull down the expectation this year at least for the earnings contributions from those projects And then finally, this is a trading update. and then finally this is a trading update We're not going to give explicit sort of breakdowns by business segments in terms of the profitability. we're not going to give explicit sort of breakdowns by business segments in terms of the profitability But having said all that, I mean, as we said, the packaging businesses, the converting businesses are actually flat half on, I mean, sorry, quarter on quarter on a sequential basis, which I think in the current environment is actually awkward for achieving that. but having said all that i mean as we said the packaging businesses the converting businesses are actually flat half on i mean sorry quarter on quarter on a sequential basis which i think in the current environment is actually awkward for achieving that At the same time, the paper businesses, yes, sorry, the packaging paper business is not where they should be. at the same time the paper businesses yes sorry the packaging paper business is not where they should be But at the same time, one fully understands it in the context of a very difficult market environment. but at the same time one fully understands it in the context of a very difficult market environment Fine paper, we are aware of the structural challenges. And of course, the current economic downturn has only exacerbated that in the short term. There is intense competition that is putting pressure. And coupled with the pulp prices, which came off, I don't know what it is, somewhere around EUR 200 a tonne over the last couple of few months. Now, it seems as though there's a bit of a floor forming there. And as I'm sure you've seen, some of the bigger Brazilian producers are pushing price increases at the moment. And we'll see how that unfolds over the coming months. So I hope that gives some color. Fine paper, we are aware of the structural challenges. fine paper we are aware of the structural challenges And of course, the current economic downturn has only exacerbated that in the short term. and of course the current economic downturn has only exacerbated that in the short term There is intense competition that is putting pressure. there is intense competition that is putting pressure And coupled with the pulp prices, which came off, I don't know what it is, somewhere around EUR 200 a tonne over the last couple of few months. and coupled with the pulp prices which came off i don't know what it is somewhere around eur 200 a tonne over the last couple of few months Now, it seems as though there's a bit of a floor forming there. now it seems as though there's a bit of a floor forming there And as I'm sure you've seen, some of the bigger Brazilian producers are pushing price increases at the moment. and as i'm sure you've seen some of the bigger brazilian producers are pushing price increases at the moment And we'll see how that unfolds over the coming months. and we'll see how that unfolds over the coming months So I hope that gives some color. so i hope that gives some color

Speaker 6: Very good. Well, I think we've taken enough of everyone's time. Very good. very good Well, I think we've taken enough of everyone's time. well i think we've taken enough of everyone's time I just wanted to finish by saying clearly in this current world, we remain relentlessly focused on margin management, on cost optimization, and these continuous improvement initiatives to protect our value today. But importantly, I also want to stress we do remain well positioned to benefit when conditions improve. We have a low-cost asset base, very well invested, a broad product offering, and with our fully integrated business model, this continues to provide resilience even in the current environment and opportunity in the long term. So with that, we remain extremely confident in the long-term sustainable growth fundamentals of our packaging businesses and our ability to deliver for shareholders. So with that, I thank you very much for your attention. If there's any other questions during the day, please feel free to reach out to the team who are available throughout the day. I just wanted to finish by saying clearly in this current world, we remain relentlessly focused on margin management, on cost optimization, and these continuous improvement initiatives to protect our value today. i just wanted to finish by saying clearly in this current world we remain relentlessly focused on margin management on cost optimization and these continuous improvement initiatives to protect our value today But importantly, I also want to stress we do remain well positioned to benefit when conditions improve. but importantly i also want to stress we do remain well positioned to benefit when conditions improve We have a low-cost asset base, very well invested, a broad product offering, and with our fully integrated business model, this continues to provide resilience even in the current environment and opportunity in the long term. we have a low-cost asset base very well invested a broad product offering and with our fully integrated business model this continues to provide resilience even in the current environment and opportunity in the long term So with that, we remain extremely confident in the long-term sustainable growth fundamentals of our packaging businesses and our ability to deliver for shareholders. so with that we remain extremely confident in the long-term sustainable growth fundamentals of our packaging businesses and our ability to deliver for shareholders So with that, I thank you very much for your attention. so with that i thank you very much for your attention If there's any other questions during the day, please feel free to reach out to the team who are available throughout the day. if there's any other questions during the day please feel free to reach out to the team who are available throughout the day Thank you very much, and we'll close the call then. Thank you very much, and we'll close the call then. thank you very much and we'll close the call then