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Financial results Q1 2025
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Q1 2025 www.arcticpaper.com 2 DISCLAIMER Please read the information below carefully This presentation (the ‘Presentation’) was prepared by Arctic Paper SA (the ‘Company’) for information purposes only for use by investors, banks and the Company’s customers as well as market analysts, and under no circumstances may it be treated as a part of an invitation or offer to purchase securities, an invitation to make investments or conduct transactions regarding securities, an inducement to make purchase offers or a recommendation to conclude any transactions, in particular transactions regarding the Company's securities. The information contained in the Presentation was taken from publicly available sources which the Company believes to be reliable. However, the Company cannot guarantee its reliability or completeness, except for the information on the Company and its Group. The Company shall not be held liable for the consequences of decisions made on the basis of or in reliance on the information contained in this Presentation. The information contained in the Presentation has not been independently verified and may be subject to change at any time. The publication of the data contained in the Presentation by the Company does not constitute a breach of the provisions of the law which applies to companies whose shares are listed on the regulated market, in particular the regulated market operated by the Warsaw Stock Exchange in Poland and NASDAQ OMX Stockholm in Sweden. The information contained herein has been published by the Company in its current and periodic reports, or constitutes a supplement thereto which is not required to be published by the Company in order to comply with the Company’s reporting requirements as a listed company. Under no circumstances should information contained in this Presentation be construed as the explicit or implicit submission of a representation, or warranty of any type by the Company or by persons acting on its behalf. Furthermore, neither the Company nor any person acting on its behalf shall be held liable in any respect for any damage which may arise as a result of negligence or for any other cause as a result of the use of this Presentation or any information contained in it, or for damage which may otherwise arise in connection with information constituting a part of this Presentation. The Company is not obliged to publish updates and amendments to the information, data and representations contained in this Presentation as a result of a change of the Company’s strategy or intentions, or the appearance of unexpected facts or circumstances which affect such strategy or intentions of the Company, unless such an obligation arises from the provisions of law. This Presentation contains information on the paper industry. With the exception of information indicated as originating from a specified source, the market information referred to above has been prepared on the basis of data received from third parties who are named in this Presentation and contains estimates, assessments, corrections and opinions based on the Company's experience and knowledge of the sector in which it conducts business. Because the market information referred to above may have been partially prepared with the use of estimates, assessments, corrections and opinions, and has not been verified by independent entities, to a certain extent, this information is of a subjective nature, with the exception of the information which has been indicated as information originating from third parties from a specified source. It is presumed that estimates, assessments, corrections and opinions are based on reasonable grounds and that the market information which has been prepared duly reflects the situation of the industry on the markets on which the Company conducts business. However, there is no certainty that the estimates, assessments, corrections and opinions are the most appropriate basis for drawing conclusions on the market information or that market information taken from other sources may not differ significantly from the market information contained in this Presentation. The Company would like to point out to the readers of this Presentation that the only reliable source of data on Arctic Paper's financial results, forecasts and events, as well as the Company’s indicators, is the current and periodic reports submitted by the Company in compliance with reporting requirements under Polish and Swedish law. THIS PRESENTATION CONTAINS FINANCIAL RESULTS FOR Q1 2025.
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Q1 2025 www.arcticpaper.com 3 Agenda 1 2 Pulp Paper 4 5 Financial performance Energy 3 Packaging 6 Focus
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www.arcticpaper.com 4 Q1 2025 SUMMARY Q1 2025 Arctic Paper Group Q1 2025 vs. Q1 2024 Net sales (PLN mn) 822.8 (Q1 2025) 965.4 (Q1 2024) EBITDA (PLN mn) 22.9 (Q1 2025) 112.0 (Q1 2024) Net debt/EBITDA* 0.69x (EOP Q1 2025) - 0.77x (EOP Q1 2024)• last 12 months
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Q1 2025 www.arcticpaper.com 5 PAPER
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Q1 2025 www.arcticpaper.com 6 MARKET DATA Fine paper average market prices MAR 2025 COMPARED TO DEC 2024 UWF average price change -2,2% CWF average price change -1,8% MAR 2025 COMPARED TO MAR 2024 UWF average price change -2,4% CWF average price change -0,5% Source: Arctic Paper based on RISI data. GRAPHIC FINE PAPER PRICES – GERMAN MARKET 600 700 800 900 1000 1100 1200 1300 1400 UWF 80 g Sheets UWF 80 g Reels CWF 90 g Sheets CWF 90 g Reels
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Q1 2025 www.arcticpaper.com 7 OPERATING DATA Average Q1 2025 use of production capacity: 74% 5% HIGHER THAN Q4 2024 Q1 2025 total sales volume: 125k tons 7,5% HIGHER THAN IN Q4 2024 PRODUCTION CAPACITY FOR ARCTIC PAPER MILLS PAPER SALES VOLUME 144 125 166 165 168 117 113 97 108 113 144 114 112 116 125 85% 71% 55% 66% 70% 86% 66% 70% 69% 74%
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Q1 2025 www.arcticpaper.com 8 OPERATING DATA * price chart includes impact of fx fluctuations, product mix and market mix Total revenue Q1 2025 (PLN 579mn) INCREASED BY 0,4% COMPARED TO Q4 2024 Average price Q1 2025 (PLN 4.65k) DECREASED BY 4,5% COMPARED TO AVERAGE IN Q1 2024 PAPER SALES REVENUE (PLN mn) PAPER SALES REVENUE PER TONNE (PLN k)* 701 579 820 1 042 722 590 701 562 579 4,93 6,19 6,39 5,46 4,87 5,01 4,65
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Q1 2025 www.arcticpaper.com 9 PRODUCTS • Top 3 brands in revenue share • No 1 in European High Quality Bookpaper Sales • No 1 in European Design Paper Sales ADVANCED OFFSET PRODUCTION IN HEART OF EUROPE MOST COMPLETE MATT COATED PAPER ASSORTMENT BIGGEST UNCOATED DESIGN BRAND
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Q1 2023 www.arcticpaper.com 10 Germany 21% Poland 17% UK & IE 12% Austria & CE 10% France 9% Baltics 6% The Nordics 10% Benelux 4% Outside Europe 2% Rest of Europe 9% PRODUCTS Geographical split of sales www.arcticpaper.com Q1 2025
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Q1 2025 www.arcticpaper.com 11 CLIENT STRUCTURE Market segments/products portfolio/target grups BUYING CUSTOMERS Printing Houses Clients who purchase the Group’s paper products directly. Merchants Direct customers who purchase, stock and distribute the Group’s paper for resale to other users. Publishers Direct and indirect customers, who uses the Group’s paper products for use in their publication activities, i.e., Random House, Bonniers, Hachette, Holtzbrinck, etc. NON-BUYING CUSTOMERS Brand Owners Predominantly indirect customers, who use our products, i.e., Deutsche Bank, Karl Lagerfeld, Kenzo, L’Oreal, Louis Vuitton, Nike, Mercedes Benz, etc. Creatives Predominantly indirect customers but are of significant importance in requiring and recommending our products to end users.
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Q1 2025 www.arcticpaper.com 12 PULP
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Q1 2025 www.arcticpaper.com 13 MARKET DATA Pulp – European pulp prices AVERAGE PRICE Q1 2025 COMPARED TO Q1 2024 NBSK (long fiber): 13% higher BHKP (short fiber): 5% lower AVERAGE PRICE Q1 2025 COMPARED TO Q4 2024 NBSK (long fiber): 1,4% lower BHKP (short fiber): 3,3% lower PULP PIX INDEXES EUROPE (USD PER TONNE) Source: Arctic Paper based on Foex data 1 342 1 430 1 498 1 429 1 370 1 240 1 147 1 244 1 397 1 612 1 567 1 483 1 548 1 177 1 308 1 380 1 380 1 280 958 809 1 001 1 220 1 440 1 261 1 000 1 160
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Q1 2025 www.arcticpaper.com 14 MARKET DATA Pulp wood price development Source: Skogsstyrelsen Volume-weighted average prices (SEK/m3f ub*) for delivered timber in Sweden 250 300 350 400 450 500 550 600 650 700 Pulp wood * SEK per cubic meters solid volume under bark
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Q1 2025 www.arcticpaper.com 15 CURRIENCIES DEVELOPMENT USD/SEK, EUR/SEK EUR/SEK – development 10,50 10,75 11,00 11,25 11,50 EUR/SEK USD/SEK – development 9,50 9,75 10,00 10,25 10,50 10,75 11,00 11,25 USD/SEK
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Q1 2025 www.arcticpaper.com 16 OPERATING DATA Pulp production & deliveries PULP PRODUCTION (1,000 TONNE) PULP DELIVERIES (1,000 TONNE) 90 83 106 96 87 87 83 102 85 90 89 82 73 83 Q1 2025 total production: 86k tons 15% HIGHER THAN IN Q4 2024 2% HIGHER THAN IN Q1 2024 Q1 2025 total deliveries: 83k tons 14% HIGHER THAN IN Q4 2024 8% LOWER THAN IN Q1 2024 84 86 111 96 87 90 93 89 80 84 91 91 75 86
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Q1 2025 www.arcticpaper.com 17 OPERATING DATA Revenue and prices Total revenue Q1 2025 (SEK 652mn) INCREASED BY 4% COMPARED TO Q4 2024 Average price in Q1 2025 (SEK 7.9k per tonne) DECREASED BY 8% COMPARED TO Q4 2024 PULP SALES REVENUE (SEK mn) PULP SALES REVENUE PER TONNE (SEK) 688 652 806 744 693 688 686 652 8 405 8 532 6 774 7 661 8 356 7 896
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Q1 2025 www.arcticpaper.com 18 Board and packaging 23% Printing and writing papers 1% Electrotechnical applications 22% Special applications 14% Tissue paper 11% Fiber cement 3% Filters 23% Other 3% PULP – REPLACEMENT MATERIAL FOR PLASTIC Pulp Sales (Rottneros) by application 2024
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Q1 2025 www.arcticpaper.com 19 PACKAGING
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Q1 2025 www.arcticpaper.com 20 PACKAGING PAPER SALES DEVELOPMENT (t) DEVELOPMENT Munken Kraft Uncoated packaging paper G-Flexmatt Coated packaging paper STABLE SALES OF PACKAGING PAPERS 0 4 000 8 000 12 000 16 000 20 000 2018 2019 2020 2021 2022 2023 2024 2025* * rolling 12 months
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Q1 2025 www.arcticpaper.com 21 POWER
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Q1 2025 www.arcticpaper.com 22 ENERGY SEGMENT - ONGOING PROJECTS • PV installation 9,6 MW PV (Kostrzyn) will be completed in June 2025 • Modernisation of biomass boiler (Grycksbo) according to the p lan – start up November 2025 - to reduce energy cost for paper production process • Wood pellet production line with capacity 50 kt/y (Grycksbo) according to the plan – start up November 2025 - new business line • Preparation for installation electric boiler 20 MW (Kostr zyn) – utilisation of surplus cheap energy in Polish grid - to reduce energy cost for paper production process Group will have over 30 MW of PV installed capacity by the summer of 2025
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Q1 2025 www.arcticpaper.com 23 PV 9 MW KOSTRZYN – MAY 2025
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Q1 2025 www.arcticpaper.com 24 FINANCIAL PERFORMANCE
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Q1 2025 www.arcticpaper.com 25 Q1 2025 EBITDA PLN 22.9mn PLN 16mn HIGHER THAN Q4 2024 PLN 89mn LOWER THAN Q1 2024 EBITDA EVOLUTION 2018 – 2025 (PLN mn) Effective hedging of both segments – to stabilize financial results in medium & long term perspective 0 100 200 300 400 500 600 700 800 900 1 000 2018 2019 2020 2021 2022 2023 2024 2025* Paper Segment Pulp Segment * rolling 12 months
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Q1 2025 www.arcticpaper.com 26 * rolling 12 months NET DEBT/EBITDA 2021 – 2025 Strong financial position 0,70 0,57 0,66 0,36 0,33 -0,02 -0,22 -0,28 -0,27 -0,19 -0,59 -0,73 -0,77 -0,35 -0,08 0,00 0,69
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Q1 2025 www.arcticpaper.com 27 Distribution of profit of 2024 • On May 15th, 2025, the Management Board of Arctic Pa per decided to change the originally announced recommendation regarding the distribution of profit of 2024. The Management Board recommends to the General Meeting of Shareholders not to pay a dividend and to allocate the entire profit of 2024 to the Company's reserve capital. • The basis for the decision is, in particular, the weaker fi nancial results achieved in both main paper and pulp production segments of the Arctic Paper Group in the first months of 2025. • In addition this decision was influenced by the fact that the prices of wood used for pulp production in Scandinavia remain at a very high level and the rapid strengthening of the Swedish krona exchange rate against the euro, and in particular against the US dollar, as well as the lack of predictability of the economic situation intensified by the introduction of global trade tariffs.
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Q1 2025 www.arcticpaper.com 28 SHARING OUR STORY WITH YOU HEDGED AGAINST VOLATILITY OF PROFITABILITY & HIGH FLUCTUATION OF ENERGY GROWTH IN PACKAGING INCREASING SHARE OF RENEWABLE AND FOSSIL-FREE ENERGY PREDICTABLE CAPEX AIMED AT CONTINUED IMPROVEMENTS OWNER OF BRANDS VALUED BY CUSTOMERS ESTABLISHED POSITION ON THE MARKET WITH A HIGH ENTRY BARRIER STABLE OWNERSHIP STRUCTURE SUSTAINABLE PRODUCTION PROCESSES
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Q1 2025 www.arcticpaper.com 29 4P For Future Arctic Paper Packaging Pulp Power