Good morning, everyone, and welcome to Kemira's Q3 2022 results webcast. My name is Mikko Pohjala from Kemira's Investor Relations, and with me here today, I have our President and CEO, Jari Rosendal, as well as our CFO, Petri Castrén. As you have surely noted, we have earlier today published and announced our Q3 report with record high revenue and operative EBITDA. In terms of the webcast today, we will start with a brief update from Jari and Petri, and then we'll go over to your questions, which you can present either from the teleconference line or then by the webcast tool. With this brief update, I'll hand it over to Jari. Okay. Thank you, Mikko, and good morning on my behalf. As announced, we had a really strong quarter. Our demand stayed good, but we started to see some curtailments from European customers and even suppliers. From the volume point of view, I'm not that worried as there are clear explanations from the exit of exports to Russia and the COVID actions by China explaining a lot of that. Energy, especially natural gas in Europe, starting to be very visible to our customers, not so much impacting ourselves, so more our customers and our suppliers. Inflation pressures continue. We have been very successful in mitigating the situation. In some areas, the raw material prices started to level out and even come down, but we expect that this trend, due to the energy and the inflation still continues going forward. Not so strong, but still continues. Highlights of the Q3, record high revenue and operating EBITDA. Seasonally, Q3 is strongest quarter for us typically. We also had a change in management, so Antti Salminen was appointed to head the Pulp & Paper segment. He was previously I&W segment head. Vidar Valpola, who is the EMEA head of I&W and APAC head, is interim and search for a permanent solution is ongoing. Both segments are in good hands. We also signed a deal to divest our Colorants business, and we believe that finds a better home with the buyer, ChromaScape, who focus on colors and colorants. That's their main business. The second installment of our dividend this year, EUR 0.29 per share, will be paid to the shareholders on third of November. Looking at the main figures for Q3. Revenue, a big number, EUR 972 million, up organically 31% year-on-year. Operative EBITDA, 152.5 million, which is 15.7 operative EBITDA margin. Both segments improved their profitability and performance, which is good to see. Revenue growth is driven by higher prices, particularly in energy-intensive pulp and bleaching chemistries. Sales volumes declined slightly, but as said, I'm not that worried of that because it's Russia and China related. Especially in the pulp, it's the market prices that are high for three main products, sodium chlorate, bleaching chemical, caustic soda, which we bring into the country and resell, but we are the only producer of caustic soda also in Finland, and hydrochloric acid is a side product from caustic manufacturing. That price is very high in the market also. Year to date, earnings per share 0.93 EUR, a good result. Looking at the segments, starting with Pulp & Paper, a really strong quarter. Revenue EUR 537 million, and organic growth 29%. Really a good volume and drive. As said, market prices for our big production of volume items are high, and that's driving the market, and we're very competitive in that. We started to see some curtailments because of high energy prices in Europe, but that hasn't been so material because Russia and China represents the biggest amount. Operative EBITDA for Pulp & Paper was EUR 92 million, and the margin improved to 17.2%. Industry & Water also had a strong quarter. Municipal market is solid, and industrial market is strong in water treatment chemistries, and oil and gas shale market demand has recovered, and volumes have grown, but we still need to improve the profitability of our oil and gas business. It's going in the right direction but not yet there where we need it to be. I&W revenue EUR 374 million, and growth was organically 33%, so a strong growth. Operative EBITDA EUR 60 million and 13.9% from the revenue, and that's entailing the drag still from oil and gas. We're working to catch up with the inflation and then improve the oil and gas profitability. Couple of topics of new openings. We have signed a multi-year deal with Spinnova's manufacturing company of Woodspin to supply our chemistries knowhow to the wood space based wood-based wood fiber-based textile production. They have a small unit here in Finland and have gone to the market with major brand names and are planning a bigger 50,000-ton plant to be announced possibly next year. This is a really important milestone in our strategy of new fiber-based technologies and where we can help the customer and partner in driving that business. Our know-how and product portfolio is fit for this and we can tune our products in R&D to make it even better. A second deal that was made in Q3 in the Canadian oil sands, a major player there and their tailings pond treatment and multi-year deal again here and goes to over those years to a three-digit million EUR number. Again, a good opening and a nice deal for our oil and gas team. This will stabilize the typically cyclical oil and gas business as it is, oil sands long-term deal, which is steady business. Shortly, the focus areas going forward, not only for 2022 but going into next year, continue obviously to mitigate impacts from the strong inflationary pressures and the energy situation in Europe. As said, we're quite okay with the energy situation. More, it's how it impacts our suppliers mainly and then our customers. Ensure delivery reliability in the volatile market situation. So far, we have managed very well this, and I believe we can manage very well, but there are availability disruptions that can come and then we need to mitigate those. We continue to drive profitable growth and continue to progress our bio-based strategy, which is progressing well. We have a number of investments ongoing. Two of the bigger ones is the ASA sizing line expansion in China at our existing plant, and then the Uruguay bleaching expansion for increasing and supporting the new plant for UPM. I conclude my short comments for Q3 here and ask Petri to come and give us some figures for you to look. Petri, please. Thank you, Jari, and good morning from me as well. Obviously very happy to report these types of earnings today. I'll focus on three points. I typically focus on three points or a few points that are important behind the numbers, and obviously one is our ability to pass on cost increases to our customers. Second, I will focus on the competitive advantage that we have with our energy sourcing in Finland. Thirdly, a few comments about our cash flow, which improved both quarter-on-quarter from last year as well as year-to-date over 2021. Impressive 40% increase in revenues. Effects mainly stronger U.S. dollar helped, but the organic growth at 31%. As already mentioned, growth was driven largely by sales price increases, and as you can see, we are clearly more than offsetting the cost increases of variable costs. Market prices, particularly for energy-intensive pulp and bleaching chemicals, sodium chlorate, peroxide as well as caustic soda are high because of the high energy costs, and this is actually where our cost advantage in for our production in Finland plays a role. I have a separate slide on that topic because I think that's not perhaps quite fully appreciated. Volumes declined 6%. Jari already mentioned the key drivers, but in I&W, Industry & Water segment, thanks to the oil and gas volume growth, we saw volume growth. Whereas in Pulp & Paper segment, the Russia exit impacted volumes negatively as well as the China COVID-related lockdowns. We did have some energy-related curtailments in EMEA for our Pulp & Paper customers. In the other section or part here category, there is a EUR 5 million indirect tax credit which we received in Brazil, mainly impacting Pulp & Paper segment. This is now just to make sure that this is a one-time event and will not carry over into future periods. We expect to receive the cash benefit in the next couple of years, 2, 3 years, as the credit will be utilized against other taxes. Inflation pressures continued. Some of it is energy-driven, but also lack of supply, as Jari already mentioned. On this topic of electricity sourcing or electricity backward integration in Finland, which we feel is a very strong competitive advantage. We own shares in Teollisuuden Voima and Pohjolan Voima, two electricity-producing Mankala companies here in Finland. Those entitle us to energy at production cost. I take some numbers from our balance sheet to illustrate the value of these assets and perhaps the competitive advantage that we have. First of all, we value our ownership in these assets on basically market basis using DCF calculation to see what the value of these assets is. These market prices we either take from trading of futures from the Nasdaq market or then best long-term estimates for long-term electricity costs. These assets we have now increased during already during Q2, but mainly during the year by EUR 140 million. Now they are about EUR 400 million in our balance sheet. Olkiluoto 3, which is the newest of these assets, which is still in trial production, is still valued at production cost, which is something like EUR 21 million. Not fully reflected on our balance sheet 'cause obviously we feel that once that asset is fully operational in commercial use, it will be clearly more valuable. We would expect that we move to the DCF valuation for Olkiluoto 3 asset as well once it starts its commercial production. Just sort of to illustrate the value of this asset, our 4% ownership gives us sort of a 60 MW of constant power. If you translate that into MWh and using a theoretical 24 hours, 365 days basis, that's more than 500,000 MWh. Obviously, in practice we will never see the 100% utilization, but that should sort of help give the math of what the value of this asset is, particularly at today's and sort of near forecasted electricity prices. Once the asset is fully operational, about 80% of our electricity needs in Finland comes from these assets where we are backward integrated or from long-term renewable power purchase agreements. Also, I think worth noting is that we do have a hedging program here in Nordics, where we look at our estimated energy needs, electricity needs for the next 5 years, and we have a staggered hedging program. Obviously first year more closely, higher hedging ratios and the fifth year lower hedging ratios. So the value of these hedges alone has increased more than EUR 100 million in our balance sheet during the year. Final point also, which is not on the balance sheet, as expensive as the electricity is in Finland, continental European energy prices tend to be much more expensive or significantly more expensive. I believe this is a benefit for us. It's also a benefit for the other electricity-intensive industries in Finland. As such, the combination of these factors gives us a good and significant competitive advantage over our continental European competitors. Now to the sales price and curves, which we also look at periodically. I think I already covered the most of the drivers behind these charts. The bottom line is that when you look at the chart on the right, as significant as the cost increases are, we are now more than covering the cost increase with our price increases. We are starting to create significant net impact, EUR 59 million in Q3 versus the Q3 of the previous year. This is not quite all uniform. Still in some regions and some areas, we still need that and in some product lines, we have some work to do to pass on price increases to our customers. In total, in absolute terms, this impact has been clearly positive and again helped by the competitive position in electricity in Finland I mentioned already. A few comments about our balance sheet. Our balance sheet is strong and indeed getting stronger. Gearing is now reduced to 54% from 63% last year, which obviously is giving us more headroom regarding our target or guidance trying to be below 75%. Also during the first half of the year, we did mention that net working capital was building up, or we are building because of the higher very high raw material costs. Also currency impacts and also higher volumes were impacting receivables. They were impacting inventory levels. In Q3, we started to level off being stable. Sort of a forecast or reminder is that we typically see net working capital release in Q4. Regardless of this net working capital buildup, which we have seen particularly in the first half of the year, our leverage ratio 1.8 is now below 2.0 that we had at year-end. Final comment on the back of the good profitability, the operating ROCE, return on capital employed, improved to 13% from 12% last year or a year ago. Cash flow, I did mention that it exceeded last quarter or last year's Q3 and year to date cash flow levels. The net working capital impact I talked about was the driver why it was a bit thinner on the first half. Now we are sort of catching up on the cash generation as well. CapEx, capital expenditures, we expect that we'll continue to land around 6% of revenue depending on some of the projects that we have underway. Jari mentioned the two big projects, one in China and one in Uruguay. Focus obviously for our planning is now starting to be in 2023. Considering the results that we had year to date, it's perhaps not surprising that there is no need for an update on the outlook for 2022. Regarding the stated assumptions, we obviously have seen some slowdown in demand, and Jari covered some of those earlier. We expect the inflationary impacts to continue through Q4 of 2022. With that, I think we are ready to move to our Q&A session. Thank you. Thank you. Ladies and gentlemen, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. Once again, that is star one on your telephone keypad. Our first question today comes from Anssi Raussi of SEB. Please go ahead. Thank you. Of course, congratulations on great results. I have a few questions, and I go one by one, and the first one is about the demand. As you mentioned that the demand started to slow down in Europe. Is this especially about energy-intensive segments of Pulp & Paper business or more broadly? Basically, do you see that the market started to cool down because your customers have to implement production halts, or is it because your Pulp & Paper customers' end user demand is slowing down as well? Multiple questions. Mainly the energy based curtailment. Board and paper machines use natural gas in their drying. When prices were high, they curtailed. The second is that there's in some qualities, there's a sort of the inventory pipeline type of adjustments. There's more inventory at the manufacturers and the ports, but then at the consumer end, that is more empty. That has changed, but the inventory levels are not growing. Mainly in the pulp and paper side and really paper and board side, not pulp. Okay. Thanks. The second one is about energy prices again, and I guess energy prices had a quite significant impact on higher selling prices. Do you think that selling prices in the chemical market in general could actually decline faster than usually after high inflation because there is such a special situation going on in the energy market? Basically thinking about really rapid increase and possible quick decline as well, or is the resilience the same as usually during declining costs? What do you think? Very hard to. I don't expect Huge swings. There are some industry sectors which are slowing down more than we are. The chemistries needed in those sectors will probably decline. That might be there's oversupply, but at the same time they are suffering from the gas prices. Yet to be seen how things go forward. If I understood, to answer your question correctly, were you sort of taking a scenario where we go to sort of a pre-war energy prices? Yeah. Basically, if we assumed that energy prices started to come down or, like in general- Yeah that the cost inflation could come down. Are your selling prices quicker to react in this kind of environment? I think we have two issues, and let's be careful that we don't mix them. 'Cause in energy prices, whether it's gas or electricity, we've seen gas is sort of five to ten times more expensive in Europe and electricity easily two to five times more expensive than it used to be. Clearly there's sort of whatever you call it's an adder or something because of the high energy costs. If we see gas prices, natural gas prices for some reason to go down to one-tenth what they are today, I think that's a highly unlikely scenario in the short term. Should that happen, then of course the adders or formulas that those will react to that energy price. Though they will probably react a bit more quickly than our typical sales price resilience is 'cause typically then. When we're talking about the general inflation, then the sort of the resilience that is built up with our long-term contracts should help us. Does that help you? Yeah. That was clear. Yeah. Answered my question. Thanks. The last one from me is that, sorry if you mentioned about this already and I missed it, but could you specify a bit your volume development in both segments during Q3? Volumes in I&W, especially oil and gas, went clearly up and then in Pulp & Paper, due to the Russia exit and the China curtailment and then some European curtailment, came down some. Are we talking about like 10% in pulp and paper or? Yeah. Maybe one another way of how to look at this is by our key product groups. Polymers, which go to both, they go to water treatment, they go to oil and gas, they go to water. In polymers, we were seeing growth because it's driven by oil and gas. Water treatment chemicals, coagulants and polymers, almost flat. Maybe a slight decline, but no, very resilient business. We believe that it's a very resilient business model as we go forward. Pulp chemicals, very strong, and really continue to be strong, and we expect them to be strong. You've seen some of the very strong results, particularly for our Nordic pulp customers. There is some demand and weakness in the sort of process and functional chemicals that go and then of course the Russia and the China impact fall mainly in that category. But your guesstimate of roughly 10% in pulp and paper volumes is pretty much roughly right. It is driven by Russia and China and then some curtailments and maybe some softness in the market at the end of the quarter. The Russian business last year with last year's pricing was just under EUR 100 million a full year, so you can take that volume out now. Close to EUR 25 million a quarter. Okay. Thank you so much. That's all from me. Thank you. Our next question comes from Martin Roediger of Kepler Cheuvreux. Please go ahead. Yes. Good morning, Jari Rosendal, Petri Castrén, Mikko Pohjala. Also congrats for the results. A few questions also, one by one. Given the low production, have you been able to sell any purchased energy to someone else? Or have you had any hedges which you did not need anymore and you could release and that has then eventually a positive impact on earnings? That would be our first question. We sell some of the peak-hour electricity mostly, but that's not a big revenue for us. Hedging, Petri Castrén, you can mention. Yeah. Really the energy sale itself is not the way. I think it's more how we manage to source our energy and obviously there was a benefit from Olkiluoto 3 high production volumes in Q3, so their test runs were producing significant amounts of energy and that did help our cost basis during Q3. That was by the way a comment that UPM also made in its own release earlier today. Mainly where we What that effect? Sorry? What was this effect? How much- No, we don't go to that precision on that. I'm just sort of pointing you to the direction, but no, we don't go into the bill of materials for our products. Yeah. The main way of managing our production is that we have an hourly production plan based on the market price of energy. When the hourly price is low on the market then we run at full speed and then we curtail when it's really high so that we don't have to buy the open hours of energy at a high cost. Obviously it means that we have to have our tanks full, and we need to be able to supply our customers. That flexibility is the important strategy in using the energy. The second question is on the valuation of your stakes in these energy companies. Of course, I guess that has an impact on the balance sheet on the active side, also on the passive side, so mostly higher equity. Is there any effect also on the P&L? No. The increase or the change in the values of these shares goes to directly to the equity, to the other comprehensive income in the equity line. No P&L impact. Okay. The third question is on, I see that your electricity costs have been EUR 114 million, but at another occasion you mentioned that the energy costs are EUR 200 million, so the delta is EUR 60 million. This delta of EUR 60 million, is that your net gas costs you had in 2021? It's mainly the other energies, fuels and natural gas and so on. We also pay and buy electricity to our plants outside of Finland obviously, and there also electricity costs and gas costs have been high. We have had a positive impact of some pricing mechanism, but obviously we've had a hit from high electricity costs. For instance, year to date in North America, we are still lagging behind. Now we started end of Q3 catching up in North America, but year to date, we've been sort of trailing increasing electricity prices. The final question is on China. Yes, everybody was hurt from the lockdown. Do you see any signs that the situation in China is now normalizing? Hard to say. Not really seeing signs. Various industries and cities and so on are randomly locked down, so the demand, consumer demand is lower than in long time and that then impacts, for instance, packaging industry. I haven't seen a trend change yet. Thank you. Thank you. We now move on to Andrés Castaño Mollor of Berenberg with our next question. Please go ahead. Hello, good morning, and congratulations. My question is about the level of gearing and leverage that you would be comfortable with as a lower bound. I believe you are well within your targets and to a place in relative comfort. I want to understand if you would be happy to take on more leverage. Well- At this stage. We've always said that we want to be below 2.5 cycles. If we go over, then we have a clear plan how to come down and that still is valid. Yeah. Maybe, obviously in our Capital Markets Day, we talked about that we actually see M&A as a more important tool for us, and in that context actually talked about the potential headroom that we could, you know, have in terms of taking on more debt. That's the good cash flow generation and good profitability, of course, is building that sort of ammunition or toolbox that we could have for M&A. Not that there's anything imminent but right now, but clearly we want to see Kemira growing, not only being more profitable. That's great. Thank you very much. A question on raw materials costs. I am seeing some of the most commoditized inputs you use starting to come down in prices. I wanted to understand if you're seeing this already at all. We're seeing some especially in North America and Asia. This energy component in the raw material prices haven't really yet gone into the prices. It's a mixed bag. Some are flattening out, some are coming down a bit. There has been still increases, direct and indirect. For instance, we buy some raw materials that are made from natural gas or using natural gas. That tenfold price is in effect. We still saw inflation in Q3, and we expect some inflation to continue in raw materials in Q4 also, but not as strong as earlier. That's great. Thank you. I propose we take a question now from the webcast tool. There were two questions. The other one was on raw material price development, that was just answered. The next one is from Petri Gostowski from Inderes. Should we expect the high energy prices of Q3 to be fully reflected in pulp and paper Q3 figures or is there some kind of a lag due to contract pricing? I think it starts to be interesting, but obviously we're entering wintertime, so most likely then energy prices, electricity prices, and gas prices will be high. In North America, the energy prices for our bleaching units have started to come down. Let's see what happens during the winter. No more questions from the tool, so hand it back to the operator. Thank you. We take our next question from Henri Parkkinen of OP Financial Group. Please go ahead. Yes. First of all, good day for everyone. I have three questions, and the first two are related to Industry and Water. Mm-hmm Just remind us about your contracts, when it comes to your municipal and industrial water treatment customers. How much you have, for example, annual contracts, which will be renewed during next couple of quarters? Second one is about the oil and gas business. You mentioned that the profitability has improved but still lacking your targets. Could you please describe a little bit the earnings improvement track in oil and gas business, for example, during last 12 months or something, just to give an idea that how strong the improvement has been? Well, I will ask the third one later. Yeah. Okay. I'll take the oil and gas if you, Petri, can take the Industry & Water contract question. First it's been utilization rates that we've gotten volumes up and utilization rates up. Unit cost has gone down and that has improved the profitability. Second is that polymers have been one of the area where there's been strong input cost increase over the several quarters and after COVID. We've been trailing with the sales prices and catching up with those. The other thing is that logistics costs have been also very high and trailing those. That's been the path and idea is obviously having higher utilization rates, fill the plants that we have and then still work on the prices and then the operating cost side of increasing. Still not satisfied with that absolute performance, but trending to the right direction. Yeah. I&W. Yeah. Maybe quickly. Oil and gas, obviously, revenue increased, but the profitability in margin also slightly improved, obviously gives us a bigger absolute improvement, but not yet delivering its potential. I&W municipal contracts typically are one year or sometimes even two years. These water contracts with municipalities tend to be fixed contracts. We have thousands of these contracts. They generally are not calendar year related. Maybe a slightly higher share than 25% which you would get if sort of mathematically dividing it by four. Maybe a slightly higher share, maybe a calendar year. It's relatively even split. The calendar year itself is not giving any sort of a meaningful difference to the sort of renewal rate or the pass-through rate, how the cost increases are being passed. As we have thousands of them, we need to sort of spread them out throughout the year. Otherwise we would have to during first quarter of the year do 1,000 quotes and then nothing during the year. That's why it's rotating as it is. Okay. Thank you very much. Third question is related to Olkiluoto 3. You mentioned that the valuation of Olkiluoto 3 is based on the DCF modeling after the commercial production will start. Have you already made some calculations which you could maybe share with us that what could be the value of Olkiluoto 3 in your balance sheet after this start of the commercial production? Yeah. Well, obviously we have a model that we can plug in numbers. I think the key point is that we first need to see that the Olkiluoto 3 starts its commercial operations. Right now, it's not producing anything. Then Teollisuuden Voima, obviously, is the one who is talking about their news and their production levels. I mentioned it will be significantly more than the EUR 21 million that is on the balance sheet right now. Yeah Let's not anticipate numbers yet. I gave you the sort of theoretical. Okay theoretical numbers, how many megawatt hours- Theoretically more than 500,000, but even if you take a haircut on that one and look at the current forward, you get a sense of it. It's valuable. Yes. That makes sense. Okay. Thank you very much. Very helpful. Thank you. Thank you. As a brief reminder, to ask a question, please signal by pressing star one. We now move on to Harri Taitanen of Nordea with our next question. Please go ahead. Yes. Good morning, my turn to congratulate on the good results. A couple of questions remaining. On this Spinnova development, I mean, can you give some color on the type of chemistry that can be used in the textile? Also on a kind of high level, how much is going to be based on, say, your proprietary know-how, and is that something that you could scale up somewhere else, or is this something which is strictly related to the current cooperation with Spinnova? Well, there are other players that are in the same industry in North America and in Central Europe, and so on. Textiles is an area, like we said in the CMD, that where we are penetrating and. It's a starting up business also in a sense, so volumes are still quite small. It's similar type of products that you'd have in board making, so weight strengths and these type of things, which is our specialty. Obviously, as a Finnish company, we've been supporting them here locally with our expertise on how they do it. I don't wanna go too deeply into their recipes, but there are other players, and this. Of course. This is scaling up. What they've said publicly is now a small unit which they are running and then engineering a 50,000-ton unit which is significant and eventually huge units by the end of the decade. Let's see how this scales up. Looking at other customers, there's also in the textiles the recycling of textiles, and there's more European Union regulation even coming to the recycling, so that's another area that is an opportunity. Yeah. If you go back and watch Antti Salminen's Capital Markets Day presentation. Yeah He was talking quite a bit about the textile opportunity, and it's not only Spinnova, so it's a segment opportunity. Exactly. Yes. Yes. Just on the news on the price gap for natural gas, and how would you see the implications for the sort of industry if that sort of happens and prices are capped successfully? Well, let's see how it's implemented. Basically I would say that's more positive than negative news to us because then the spikes for our customers and our suppliers are easier to handle. I think this winter European gas inventories are quite full, so what I'm hearing from the players is that it's not the availability unless there's an extremely cold winter in Europe. It's a price issue. We see what happens going to the next winter and how the inventories are filled. Right. Thank you. Thank you. At the moment, there are no further audio questions. All right. There are no further questions from the tool either, so this concludes our call. Thank you for your questions. Should there be any outstanding questions, do reach out to me then, I'll be happy to help. A reminder, we publish our full-year results on the tenth of February, so that's quite far away, so I'm sure we will be in touch still before that. With this, thank you for participating, and we wish you all a very nice week. Thank you.