Hello and welcome to today's webcast with Arctic Paper, where CEO Michal Jarczyński and CFO Katarzyna Wojtkowiak will present a report for the first quarter of 2025. After the presentation, there will be a Q&A, so if you have any questions for Arctic, you can send them in via the form to the right. With that said, I hand over the word to you guys. Hello everyone, welcome to this Friday morning presentation of Arctic Paper's financial results for the first quarter of 2025. Together with CEO Michal Jarczyński, we will present this to you. Starting with a summary of Q1 2025 results, if we compare them to the same quarter of 2024, we can see that there was some decrease in our net sales. It had two main—it had a bit different reasons in our both segments. In the paper segment, the biggest impact was the lower volume of sold paper and also just a slightly bit lower paper price. On the side of pulp, the main reason was lower volume sold. On the EBITDA side, we also noticed a significant decrease of our results, and it had some influence also from the paper segment, which was mostly, as mentioned before, lower volume and a bit lower price. Whereas on the pulp segment side, the main reason was very high cost of wood, so raw materials on one hand, and on the other hand, also the strengthening of Swedish krona against both US dollar and also Euro had some impact on the results. The group's net debt to EBITDA ratio is still on a safe level, even though it has increased somehow due to more use of our overdraft facilities, but it still remains on a relatively low level, which indicates the good financial position of the group. Let's go to the characterization of each of our segments. Next, please. Q1 was quite stable and unfortunately not in the favor of the pulp and paper producers. The demand in Europe and even global demand for the pulp and paper product was weak. Also, we already see this regarding the prices. During Q1, we have flat prices, even a small decrease compared to December prices, and also a small flat compared to the last year. Move to the next one, please. From the volume perspective, we were a bit better compared to the end of last year, but significantly lower compared to Q1 2024. The demand for paper is weak, and we were able to use a maximum of 74% of our capacity. It's a little bit better compared to December, but normally December and Q4 is a quite weak period for the pulp and paper producers. From the volume perspective, we were able to produce and deliver 125,000 tons of fine paper to the customers. Next, please. From the operating data, the revenues are quite flat, a small difference compared to Q1 2024. It's only 0.5%, but also a small decrease regarding Q1—sorry, a small decrease compared to the end of last year. The average price is also affected by the currencies, but the currency fluctuation and the effect of the currencies for our result will be presented in a few minutes by Katarzyna. Next, please. No changes regarding our product structure. We are still a producer of fine quality paper in three paper mills: two in Sweden and one in Poland. Regarding the market share, also no big changes. Europe is still by far our key market. Unfortunately, Germany, due to the recession or weak economic performance, we were not able to maximize our sales according to our plans. Still, Germany is number one. The next big markets are Poland, the U.K., Central Europe, and Nordic. Our sales outside of Europe are quite limited, only 2%. We already started at the beginning of last year with small sales to the U.S. It seems that due to the current tariff issues and turbulent global trading relations, this market is not so promising. We probably have to revise our strategy regarding this market. Already this year, we delivered to the U.S. close to 105,000 tons of paper. Next, please. No changes regarding the client structure. Our biggest percentage of the product is delivered to the merchants, which are responsible for delivering the product for the middle and small-sized companies across Europe. The second part is the printers across Europe. Big printers are located in France, the U.K., and Germany. The next is the publishers, mainly in Germany and also in the U.K. The next, please. The pulp market is also characterized by low demand. It is affected mainly due to global recession or global turbulences regarding the trading. The demand for pulp-related products like paper, packaging, and tissue products is weaker compared to 2024. It has a significant impact regarding the results delivered by our pulp segment. Next, please. Still, we notice very high or even the most expensive wood prices in our history. Unfortunately, even due to this quite stable demand for the wood product, the prices of wood pulp are growing in Sweden, and the average is close to SEK 700 per cubic meter delivered. We hope that it will stabilize because the demand for the forest product, especially timber, is quite stable or even decreasing, but probably it will affect positively on our result on Q3 this year. The next, please. Maybe some words now about the currencies. As we mentioned before, the currency situation had a significant impact on the results of Q1. As in the paper segment, the strengthening of Swedish krona against both the US dollar and Euro had an impact on the revenue side. It was partly offset by the strong Swedish krona against the US dollar because, as you know, our main sales in the paper segment are in Euro, and our main costs, which is pulp, are in US dollars. The situation is completely different in the pulp segment, where strong Swedish krona against the US dollar had a significant impact on the revenue side. As you know, in that segment, almost 100% of sales is done in US dollars, whereas most of the cost is in Swedish krona. Therefore, we could feel that significantly during Q1. Let's move to the operating data connected to the pulp segment. Regarding the production, which was close to 86,000 tons of pulp production during Q1 this year, it's a bit higher compared to Q4 last year and even better higher compared to Q1 last year. Please point out that during Q1 last year, we had several technical problems regarding the production process in the Swedish pulp mills, and as well, due to the heavy winter, there were some turbulences regarding the deliveries. It seems that the deliveries during Q1 were achieved to 83,000 tons, which is below our expectation. We hope that in Q2 and Q3, the result will be even close to 90 or even over 90,000 tons of pulp. Next, please. Next, please. Quite a stable situation regarding the structure of the application of the pulp produced by Rottneros and by Vallvik Mill. Fortunately, we are less impacted by the low demand for the printing and writing paper, but the 32% dedicated for the packaging is also affected by the low demand. The export to China is also limited due to low demand from Chinese producers, and the Chinese pulp and paper sector is also affected by these turbulences of the trading relations between China and the U.S. We do not expect any improvement for the Chinese business for the next coming months. The European automotive sector is also affected by the recession, and it also has some influence regarding the deliveries of the pulp delivered to the filters business. It means that filters for the fuel and the air are also limited. Quite stable and even promising segment is electrical technical application. The transformer business is booming, and it seems that we have to pay more attention regarding the development of production pulp for the insulating paper for European and also non-European producers. Next, please. The packaging business is quite stable. It is small, but quite stable, close to 16,000 tons per year. All main clients are located in Germany, Poland, and Sweden. It is a quite stable business. So far, we have no plan to make any significant increase in the kraft production. Just for information, recently, we already started to run the production facility in Poland as a joint venture between Arctic Paper and Rottneros. This plant is focusing on producing molded pulp trays as a substitute for the plastic packaging. We have an expectation that already next year, it will contribute to our EBITDA. Next, please. The power. We have several ongoing projects regarding the power. In a few weeks, we will complete a PV installation in Kostrzyn. This is a close to 10 MW installation connected directly to the Kostrzyn mill. It will help us, from one side, to reduce the environmental impact of the paper production because today, a significant part of the energy is produced using the natural gas from the local sources. It will also have an impact regarding the reduction of the energy cost for the paper process. The biggest project in our group is the modernization of the biomass boiler located in Grönsö in Sweden. This project runs according to plan, and the startup is planned for November this year. The result will be to reduce the energy cost for the paper production by SEK 30 million per year. Another project which is closely connected with the biomass boiler is the wood pellet production line. We have a surplus of the steam, and this steam will be used to dry wood sourcing from the different locations in Sweden. By November this year, we will start to produce up to 50,000 tons of pellets. This is our new business line. The clients are located in Sweden and Germany, partly in Poland. We have an expectation to have an additional contribution to our EBITDA by SEK 50 million already in 2026. There is a fluctuation regarding energy prices. Sometimes, especially during the windy days and sunny days, there is a surplus of energy in the system, and the energy prices are quite low, even with negative prices like today, this morning, or even yesterday during lunchtime in Sweden. Due to the fact we have a plan to install the electric boiler located in Kostrzyn mill in Poland with power up to 20 MWs, we have a plan to use the surplus of cheap or even negative price for energy to produce steam for the production process. We have an expectation to have, from one side, a positive impact to reduce our CO2 emission. Secondly, to reduce our energy costs. By mid of this year, the total capacity of all PV installations in our group will exceed 30 MWs. The next, please. This is a picture done yesterday during lunchtime. This is the status of the ongoing project of this 10-MW installation, exactly 9.6-MW installation located in Kostrzyn. On the right side of the picture, you see already the production machine hall. This is a connect line, direct line, which delivers the energy produced by the solar panels to the production facility in Kostrzyn. Coming back to some other topics of financial performance, here you can see the EBITDA evolution during past years. As you can see, the contribution of both segments during this year has changed, and sometimes it was better for the paper part, sometimes for the pulp part. We can see some deterioration in the results for past years, but we are introducing some cost-saving measures in both segments, in paper and in pulp, with support of our four P strategy new segments, so power and packaging. The EBITDA for Q1 was close to PLN 23 million. Please note that it was almost PLN 16 million higher than Q4, where we had some one-off items, but it was unfortunately significantly lower than in the first quarter of 2024. We believe that both segments can contribute well to the total group result. The net debt to EBITDA during past years has changed, but still, as you can see, even though sometimes it was negative, it is still on a very safe level, amounting at the moment to 0.65. We believe that this trill keeps our strong financial position, a strong balance sheet, which is also confirmed by good cooperation with our financing banks. As a result of what you could hear from our presentation yesterday, the Management Board of Arctic Paper decided to change our original recommendation regarding profit distribution of 2024. We will recommend to the general meeting of shareholders not to pay the dividend and allocate the whole profit to the company reserve capital. The basis of this decision is mostly the weaker financial results, which were achieved in both our main segments, paper and pulp, in the first month of 2024. In addition, we noticed, and what we mentioned before, that the biggest things that influenced the results were the high prices of wood in Scandinavia, which are still remaining on a very high level, the rapid strengthening of Swedish krona against both Euro and US dollars, and also the lack of predictability of the economic situation, which was intensified by the world economic situation and global tariffs, which were announced by the USA. Next, please. Just a summary. We have a, let's say, tough market for pulp and a tough market for the paper business. It seems that during 2025, we have to change our position. We have to focus regarding optimization and improvement of efficiency. This is the reason that we decided to make some cost-saving plans on both sectors, pulp and packaging. Also, we would like to keep, during this turbulent time, a stable financial situation. This is our position. This is the reason why we presented to why we would like to recommend to the EGM not to pay the dividend in 2025. We will back to the normal payment dividend according to policy when the situation will be much, much stable. It seems that also this year, we will reduce our CapEx. Last year, it was over PLN 400 million. This year, it will be PLN 250 million. The same level, around PLN 220 million, should be the reduced CapEx for the next two to three years, just to stabilize the situation. We hope that by the second part of this year, the output from our new packaging facility in Poland, these molded pulp trays, will have full capacity. We have an expectation even to develop the business in the next coming years. The power business is mainly focusing regarding on-site location to increase production and utilization of the green energy on-site and as well to reduce the cost. Thank you very much. Looking forward to your questions. Thank you so much for the presentation here. As you mentioned, I will now carry on with the Q&A here. Given the sharp decline in EBITDA and net income year- over- year, what specific cost optimization and efficiency measures are currently yielding the most impact? When do you expect this action to be reflected in improved margins? As I mentioned, we already announced a few weeks ago significant changes regarding the pulp sector, a reduction of over 40 people in Swedish pulp mills. We also decided to put on hold several other projects. This year, we focus only on ongoing investment projects. We have no plan to start any new ones, just to stabilize our financial situation. Thank you. A follow-up question there on the pulp. How exposed is the pulp segment to continued foreign exchange fluctuations and high Scandinavian wood prices? You mentioned a few steps here you have taken, but what steps have been taken to mitigate this structural vulnerability? I assume that over 80% of the costs are connected to Swedish krona, and 100% of revenues are connected to the US dollar. It means that from one side, it will be quite difficult to change, let's say, the behavior of the clients because this traditional pulp market since decades is stabilized in the dollars. We have already started some discussion maybe to change into the Euros. Of course, another solution is to have financial hedging. Of course, today, on the current exchange rates, this makes no sense. Maybe in the future, we will reconsider using FX hedging for the future transactions. Thank you. You postpone new investment projects to reduce expected CapEx for 2025. How do you balance these deferrals with long-term competitiveness and innovation needs for the group? First of all, we reduce our expectation to increase capacity. It means that due to this weak market and probably as well the weak demand for the coming months, it makes no sense to put extra money for capacity increasing. We would like to continue this year, and even most of the ongoing projects are connected to cost saving, improving efficiency, or additional business lines like the molded packaging trays plant in Poland. Also, this biomass boiler in Grönsö and as well this pellet production line, it also gives us additional revenues and additional contribution. Thank you. The energy segment is expanding with new solar and bioenergy initiatives. What return on investment do you foresee for these products, and how soon could they become meaningful contributors to earnings? If you just calculate what is the difference between the production cost on the PV versus the production cost of one MW hours on the natural gas, it's at least 50% lower. It means that normally in our energy project, the expected return on investment is between five to seven years maximum. Thank you. Moving on to the last question here. With net debt turning positive again after a period of negative net debt, how would you describe the company's current financial flexibility and ability to weather continued market turbulence or seize acquisition opportunities? I would say we are not looking into any acquisition opportunities at the moment. We can realize that the net debt to EBITDA has increased slightly. We are still in contact with and in good discussions with our financing banks, so we can maintain a good, stable financing situation for the entire group, both in the paper and pulp segments too. I would like to emphasize that we have a strong balance sheet, and our debt to equity is only 0.6. Normally, the level which is set in the loan contract is around 3 or even 3.5. It seems that we still get. Due to this turbulent time, our view is that we have to maintain a strong balance, and we have to maintain a strong liquidity position of Arctic Paper. This is the reason that today we have no plans to acquisire. During this turbulent time, we are already receiving on the near-monthly basis several offers for acquisition in different segments, but our aim is to maximize the efficiency of the existing assets in our portfolio. Thank you so much for the presentation here today and answering all our questions. Thank you all for watching at home. I wish you a pleasant day. Thank you very much. Bye-bye. Thank you very much. Bye. Bye.