Welcome to the Billerud Press Conference. For the first part of the conference call, all participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now, I will hand the conference over to President and CEO, Ivar Vatne. Please go ahead. Hey, good afternoon, everyone, and, thank you so much for joining us on a short notice. We are obviously out with some, some news we're excited to talk a bit about. This will be a relatively short connect. We're gonna cap this, about 30 minutes today, but, we will, also see then how the, Q&A flow, for the next couple of minutes. I, actually have only one slide this time to share before we open up for, for Q&A. So, why don't we go into next slide, please? Listen, we had, earlier today, a, good discussion with the Board of Directors, and we have decided on a new direction to transform our production in the U.S. towards, packaging materials. And, one part of that means that, we will not move forward with the, planned and original cartonboard conversion in Escanaba. Let me just pause there for a second and give some perspective, because we have worked long and hard over the past 18 months to find a solution. I think you heard me repeatedly talking about this over the past quarterly calls, and, you know, we have reviewed many different scopes. We looked at different ways of getting this together. We're also reusing a bigger part of the existing assets. We also looked at the different ways of how we can phase this out over different period of time. Now, the conclusion is pretty clear, that the investment level remains a massive challenge. And, I can say that, the investment level needed, they are much, much higher versus our ongoing projections. And yes, on that last sentence, I, I did choose my words carefully. You know, and for me, then it gets, quite simple. If the, you know, economic conditions change, we will, adjust accordingly, and, we do something else. Now, I'm very excited actually, that, when we look back over the last couple of years and, pretty much to the day, two years since we, took over the, North American business, we have learned that actually we have better-than-expected flexibility on the current asset base in North America. And, that means we are confident that we can start shifting gradually our portfolio mix towards other packaging material grades, and that, job, to some extent, has already started. In particular, we are talking about growing our positions towards containerboard, but also we have good confidence to increase our exposure into low-grammage cartonboard. Now, this will require some level investments, and that is yet to be fully confirmed, but I can say that this will be on a much more moderate level, particularly versus what we looked earlier for the FBB conversion. And hence, we are very confident that this will yield a stronger return and be a much more attractive proposition. For me, this is really excellent news, and, for us, there's not even an option to talk about, you know, Billerud going forward without Billerud North America part of this. We've been so impressed since we took over two years ago, how the cultural fit has been, what performance we've been able to see quarter after quarter, and also what access to cost-competitive fiber we see in that very good central U.S. location. So we are extremely excited to still go right on to the strategy. We are moving our product portfolio towards packaging materials, but we're gonna do this more sequentially, more as an evolution versus the original plan. We would expect to arrange a Capital Market s Day during one of the later months of 2024 to talk even more about some of the details and the gradual journey we look to undertake. So with that, I hand it back to operator for Q&A. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. The next question comes from Robin Santavirta from Carnegie. Please go ahead. Thank you very much, and hello, everybody. Now, I was just wondering if you could share some information about the sort of current plan you have in North America. What kind of investments do you foresee for the midterm, whatever is, you know, three to five years? And what kind of sort of production conversions or paperboard production could you reach during, say, three to five years, with the new plan? Yeah. Hey, and good afternoon, Robin. So listen, I completely understand the question, and in many ways anticipated this question. It's a bit premature for us to go into all of these details today, but I can try to give a little bit more spin. I think you probably need at this point to start looking at the different assets, you know, machine for machine. I think, you know, Quinnesec Mill, for us, that's the flagship, it's the crown jewel of the North American business. That is a very, very good machine. I think you are aware of this, and the newest mill in pulp and paper in North America. We are expecting to fully, you know, use that still as a coated free sheet. So, having exposure for graphic is still where that has a good match. Now, we're aware of the challenges with the market decline on graphic, and we do expect, and we already have had very good test trials on this, on how we can add more specialty paper also on that machine. And we've also done some very encouraging test runs on coated liner on that machine that has provided some very strong customer feedback. If you go into the Escanaba Mill, and I think you might know that we have three machines over there. The simpler one to talk about is probably, you know, the E3, and that is a machine today which is first and solely worked on specialty. Specialty, I think, fits our portfolio like hand in a glove. That is in a growing market, and you know, we have good plans and definitely that's part of our strategic sweet spot going forward. E1 is a smaller one of machines, and we will probably then look into a mix of that between some graphic paper, but we might also be able then to start filling that into different items with low-grammage carton, and we might even have some other kraft paper on this. E4 is still the machine that we are working on. It's a pretty new machine, and it's just a bit more than 4 years old. Part of the challenge for us is how we can increase the caliper on this and run a little bit thicker material. We have a good view that also the containerboard mill, the containerboard path is what we're going to pursue there in combination with graphic. Now, in terms of the investment, again, I think it's a bit premature. We did choose our words carefully also here, where we talk about a much more moderate investment profile. We, as always, have a bit of a base CapEx that is the foundation, and we do expect some additions to this. For the first couple of machines I talked about, in particular for Quinnesec and for the other machines in Escanaba, that should be, call it, relatively on a small level. We just need a bit more time to review the different options on exactly how the plan and the sequence will pan out on the E4. All right. Thank you. And, can you more share some, or comment on, on the exact reasons for not doing this this conversion? I guess, the wood raw material cost in North America for you guys is, is not the problem. It's actually a quite attractive setup, whereas you're, you know, in a quite tricky situation in, in, in Sweden, and, and the market opportunity seems to be excellent, with limited amount of folding boxboard in, in, in North America. Is it the equipment price, or is it, the, weak SEK versus the dollar at the moment, or is there something else that we should know about? No, I don't think there's so much other items. I think you're onto it, Robin. The key point I've said from the start is that, hey, unless we can secure a good shareholder proposition, we're not gonna do this. And as I mentioned in the beginning, the size of the CapEx is significantly challenged. I think you can look at that into both the cost of the hardware, but also of the services or the hour installation needed for this. Yes, I mean, currency has not helped on this case, but I think also from our view, we would look at this forward, that also the future cashflow will be coming also into the US dollar. So yes, there's a part of the currency per se, but, you know, it's, it's actually more the underlying inflation on the other component that's been the massive challenge for us. I understand. Thanks. And then finally, just on, you know, in the midterm, I understand before, at least, it sounds like North America is the key growth area and growth segment, and you're a bit challenged with the high wood raw material prices and cost in Scandinavia. Should we expect something else now to be the sort of key growth, sort of avenue in the midterm, or is it still North America, or is it essentially profitability improvement that we go for from here? No, I don't think anything else have changed. And I think as you, as you know, we are fighting a slightly different, call it, forces on the different side of the Atlantic, especially on the input cost. But the underlying, strategy still remains, and how our focus is, on driving our packaging materials, first and foremost, and also how North America is the, region for growth being identified. So all of that is still very much intact. Thank you very much. Thanks. The next question comes from Ola Södermark from Kepler Cheuvreux. Go ahead. Ola Södermark, Kepler Cheuvreux, your line is now unmuted. Please go ahead. The next question comes from Oskar Lindström from Danske Bank. Please go ahead. Thank you. One question here, which we talked a little bit about before, but I mean, if you're not going to be doing any significant investments in North America near term, as I understand it, are there other investment needs on the European side of your operations that we should be aware of, that are likely to be more imminent? I'm thinking primarily of the Norwegian project, which you've been talking about. So maybe if you could update us on the status of that project. Yes. Hey, and good afternoon, Oskar. No, I think you're pointing on to the right area. I think the Norway project is still what we have, you can say, on the steps, so it's still looming. You know, we are progressing, and we have had a very good project collaboration with Viken Skog in our joint venture over there. At this stage, we are waiting for the environmental permit to come through, and we don't really have an exact time on this. It's not unreasonable that somewhere between summer and Christmas that should be coming our way, but it's a little bit, yeah, difficult to predict. And that's pretty much all we can share and have at that project for the time being. If I may just follow up on the sort of other investment needs. I mean, you recently or fairly recently completed the investment in a recovery boiler, but you have, I believe, another recovery boiler that is also sort of at least on the time horizon to, you know, needing some care or replacement. What's the situation? Yeah. No, I can comment on this, and, and that's probably not a massive secret, that we do have a boiler up in Gävle that is starting to, call it, meet its end of life. You know, we are still, let's call it, exploring and trying to figure out exactly how that will transition. There's obviously no imminent decision on this, and there's not something that you would expect in the near future, but let's call it on a midterm basis. And in some years, it's quite reasonable that we will come back and, and open that topic on what we will need to do and, and how the phasing of a, of a boiler situation available look like. All right. Thank you. And finally, if you have any comments on markets at the moment, now that we have you online? No, I think it's actually pretty simple. It's very consistent with what we said, you know, in our Q1 call. I think, you know, we are seeing that, you know, the order books are picking up some traction. And that's also what we expecting going into the Q2. That has been very much in line with, you know, what we saw some couple of months ago. And we are aware that, you know, the input cost in Nordic in particular is under pressure, and that's challenged with the wood cost. But, you know, there is ample of pricing activity out there, as we already had foreseen. I think our view of still being able to offset, you know, to a large extent, on all of that is still very much intact. Wonderful. Thank you. Those were all my questions. The next question comes from Linus Larsson from SEB. Please go ahead. Thank you very much, and a very good day to all. You've previously guided for CapEx of SEK 2.3 billion for 2024. Now, looking at 2025, 2026, how should we think around, I mean, very rough ballpark numbers, obviously, but the CapEx in the following two years, I hear potentially the Norway project. I think you've said something like SEK 700 million. But apart from that, what could potentially come up? Do I understand it right that, for instance, there isn't a recovery boiler on the horizon before end of 2026, that would be sometime beyond that? And are there other potential projects that you have in mind already at this stage? Hi, Linus. I can take this question. In terms of the CapEx, as you say, we have a base CapEx level of roughly SEK 2.2 billion to SEK 2.4 billion. That's also what we expect, heading forward now. And that's split, you know, roughly SEK 500 million to SEK 700 million for North America and the rest for Europe. As Ivar alluded to, in terms of the Norway project, we need to await the formal grant of the environmental permit before we can make a decision on that project, and we'll get back with the figures around that capital expenditure at that point. And other than that, it's essentially the base CapEx that we would be able to guide for at this point in time, and look into plans, heading forward. If I can just add quickly on this, but it's a bit, as I said to Oskar, that the boiler... Yeah, I mean, it will come at some point, and we will come back to it. That's not today. I think when you are into the end of 2026, it's not unreasonable that we will start to see something. But hey, it's premature to say anything else, and trust me, we will—we'll come back when we are ready for this. And that's maybe more when we get into 2025, we start to get a better view on what that project will be. Cool. Then on this gradual mix development that you're talking about, which is the big news today, obviously, in North America, how fast do you expect to be able to do that? If you look at, say, year 2030, what mix are you anticipating? What's realistic? How much would be graphic paper in 2030 or something like that? Hey, it's a good question, and let me also say that we will come back to these details, Linus. So, I won't maybe go as far to give all of those coordinates today, because we're still working through that, exactly how some of those moves will be. But I can say that if you look at the portfolio today, in the U.S., it's obviously a business dominated by graphic, first and foremost on coated free sheet, and we have a small tail of kind of groundwood. And then we have a good position on specialty, and you can look at that in the area of about 200,000 tons. And there's also some pulp that we're selling on the open market from Quinnesec. I think if you then go out, and then let's just, you know, use this with a big brush at the time and say 10, 15 years down the line, you know, we are actually in many ways super committed on the, on graphic. And, you know, graphic has been, good for us. And, you know, we, we have, very likely the most competitive assets in the whole of North America. And, you know, we will be in that category, in particular for the free sheet, which has a little bit less decliner factor in it versus, the groundwood. But there's no doubt that year by year, that category is also going down, and, it's not something that you can rely on having as the major bulk of your business, further down the line. And we will then, and to be honest, started already, how we can gradually increase both our specialty exposure, but also how they gradually go into containerboard and, supplement also with some lower grammage cartonboard. And then you can read that both in terms of some SBS and some CUK. So I would certainly expect a very different mix product split when we come down the line. Good news is that a lot of the things that we are moving towards, hey, that's core of what Billerud is good at. This is why we sit with enormous expertise also here in Europe. And we already, as I mentioned in the beginning, done some test trials of some of this asset with very encouraging results. So we are actually very excited to pursue this plan, which we think is actually a much better plan. Sounds great. May I just squeeze in one final question, and it's relating to subsidies? I mean, that has been a discussion point in North America. The way things have changed now, do you see any scope or room for subsidies from Michigan State, from the federal government or someone else in the new strategic direction that you're now starting? The question was around subsidies, right? Yeah. No, listen— Yeah. I think, it's very reasonable to assume that this grant or the discussions we've had in Michigan State is off the table. And, you know, we are very thankful for, you know, all of the support and all of the, let's call it very, very good discussions we've had with the Michigan State over the years. But, I think the base assumption is that this is off the table with our new plan. Just checking. Thank you very much. The next question comes from Johannes Grunselius from DNB Markets. Please go ahead. Yes, hi, everyone. It's Johannes here from DNB. So most of my questions has been answered, but maybe Ivar and the team, if you could provide some more color on the shape and the standards of Escanaba, because I was under the impression that one of the machines over there needs to sort of be replaced because of old age and what have you. So if you can give some color on that, please. Yeah. No, I think I can certainly do so. And that's not really the case. It is absolutely a fact that, you know, the asset base and Escanaba is an older mill versus Quinnesec. I mean, as I think I said in the beginning, Quinnesec is like one of the more modern mill we have in North America, and probably one of the newest assets there is. Escanaba is around 100 years old, but the asset obviously has gone through many different operators and transitions. E3 is actually the oldest one. And I think now with some of the changes we've done there, it, you know, it runs very well towards specialty paper, which I already mentioned is a big part of our strategy. E4, that actual machine is from 1982, so it's not a very old machine at all. I think the challenge there is just in terms of what caliper it currently is, sweet spot around, and that's on the lower side, and that's obviously what we are then looking for on how we can increase that weight, and then how we can get the basis weight up, so we can compete into different grades, as I went through. But no, besides that, because this can be done in different shades of gray, there is no massive call it investment need on any of those machines. Okay, thank you. Helpful comments. The next question comes from Andrew LaCombe from WLUC. Please go ahead. Hello, from Upper Michigan, in Escanaba area. I'm just looking for your message to the employees, the 800 employees at the Escanaba mill on this news coming today. No, I can repeat only what I mentioned in the beginning, that, listen, we've been so impressed since taking over the Verso assets two years ago, and in many ways it has exceeded our expectations in so many manners. I already mentioned how I felt the cultural fit from day one was, you know, hand in glove. When you look in terms of what competitiveness those assets are and, you know, what results we've been able to produce has just been mind-boggling, if I'm honest, in a not a very easy market context. I understand it's a big piece of news today, and I can also say that, you know, we are more committed than ever to stay and remain in North America. This is, I also mentioned this in the beginning, a big part of what Billerud look like. It's at this stage unthinkable to view Billerud in the future without North America. We have a new plan now, and we will change the direction. I'm very confident that this will be a very good play for both the company and also for the Escanaba Mill. We saw layoffs last September, some temporary layoffs. Do we see those possible in 2024? No, I think that program we did was based on a global scale, and it impacted all of our mills. We tried to solve that in a smart manner for many of the mills through you know, vacancies and looking at the different natural attrition. I think that's the same that goes on for Escanaba. We have targets that we are looking to fulfill, and I think we are in good shape for all mills, and that's pretty much the only plan we've had and we have on the horizon for doing any kind of changes on our global workforce. Okay, thank you. The next question comes from Josefin Johansson from Handelsbanken. Please go ahead. Thank you. My question relates to the transition plan that you have for the North American operations regarding environmental and carbon dioxide impact, 'cause it's quite more significant than the European operations. Does this decision today have any impact on that plan that you have, or any investments that you plan to decarbonize operations, or is this something else? No, good afternoon. It's a good question. I think in essence, you know, we are still very much committed, and we have submitted a proposal for an updated science-based target. As you rightly point out, the vast reduction of that is scheduled coming from North America. That is what we're still aiming for, and that is still something which is not directly impacted by this plan. It is true to some extent, we just need to verify some of our building blocks that they still match up, but a lot of it is around the alternative use of energy, and also look at, in general, efficiencies across the value chain, and that's still very much on track. So we are going forward to our new targets with full force. No expectations on delays due to this? No, not any dramatic change from what we already communicated. Okay, thank you. The next question comes from Ola Södermark from Kepler Cheuvreux. Please go ahead. Yes, hello, I hope you can hear me now. Loud and clear. Yeah, perfect. I had some technical issues. I had to circle back to the CapEx levels and the investment levels. If you—I mean, you're saying a relatively moderate number, or it's compared, I suppose, to the previous communicated numbers. But then you talked about investment level of $500 million to $700 million in the US as maintenance levels. Does this kind of stepwise conversion include—are they included in the kind of baseline CapEx level? Hi, Ola. Yeah, just to clarify there, so level of SEK 500 million to SEK 700 million, that's Swedish krona per year. So, so that's— Yeah. Really the base CapEx, and does not include any of the alternative transformation path or direction that we're talking about here. Then you can help me out with relatively moderate number. Is it 10% of the previous kind of number that you communicated for a year ago? Or is it 20%, or what kind of level, at least an indication? Yeah, I— You have to try, at least. No, I mean, I understand, and I think I hear the question coming from a different angle. Listen, I won't give you a number today, and we're still working that from different, let's call it fronts. We need a bit more time. This will be a much quicker exercise for us to come with a better view, so that is not gonna take another 18 months. I can say that, you know, the previous mistrack we had, which was back in December 2021, and we talked about at that time, SEK 9 billion for conversions. This is on a very different planet, okay? And it is dramatically lower than that. That's the best I can give you at this stage, and I can assure you, we look forward to talk about when we come into the second half of 2024 to offer you a bit more details. Okay, so it sounds like 10% to 20%, then. Thank you for the question, Ola. We will come back to the question. Thanks for trying. Thank you. I think that completes the call today. Thank you very much. We used the 30 minutes. I hope it was helpful. We look forward talking more about our exciting North America, and bye for now, guys.