Welcome to this presentation of SCA's second quarter results for 2021. With me here today, I have our President and CEO, Ulf Larsson, and CFO, Toby Lawton. Please go ahead, Mr. Larsson. Thank you, Anders. Good morning, everyone, and also from my side, a warm welcome to the presentation of our results for the second quarter 2021. When I summarize this quarter, I like to start by saying that in terms of result, the second quarter this year is the best quarter since the split in 2017. We delivered an EBITDA margin of 47%. A strong market, strong demand, gradually increasing prices within all product areas of SCA have, of course, contributed to this. The decision to wind up the publication paper business completely is perhaps even more important. In addition to price and mix, we have also had a good production level and stable costs during the quarter. When comparing our EBITDA level for the second quarter 21 with the outcome for Q2 2020, we note an improvement of 126%. This is, as mentioned earlier, mainly due to increase in prices for wood, pulp, and kraftliner, but also good production level, stable costs, as well as our decision to exit publication paper. On the other hand, the currency development counteracts the positive earnings development during the period and give a negative effect of more than SEK 200 million. Our turnover during the second quarter increased by 3% compared with the second quarter 2020, despite the closure of the publication paper business, together with the divestment of our Wood distribution operations in U.K. Toby will come back to this. We also see that we have an upward trend for forest value in general, and by that, also for SCA Forest. Toby will come back to that later on. Last but not least important, I would like to conclude the summary of the second quarter by stating that our two major investment and growth projects in Obbola and Ortviken are progressing on time and budget. Turning over to some financial KPIs. We've had a very strong second quarter, as mentioned. We delivered SEK 2.26 billion on EBITDA level, and as I already also mentioned, this represents the best quarter since the split 2017. Our EBITDA margin reached 47% for the quarter, which is, if you look to the right-hand side, you can see that this is substantially higher than previous quarters. When it comes to our industrial return on capital employed, in our case, calculated as a 12-month rolling average, that one amounted to 14%. If we then look into the level for the second quarter, it was 31%. Our leverage decreased to 1.4x despite our ongoing investment program and despite the fact that we paid a dividend during the second quarter. I'm really happy to say that we continue to finance our strategic investments with our operating cash flow. I would now like to make some comments for each segment, starting with Forest. Here we can state that we've had another quarter of stable supply of wood to our industries. Sales was up due to higher volumes, whereas we have noted a decrease in pulpwood prices, mainly due to our exit from publication paper, and by that, a reduced share of imported wood. When it comes to sawlog prices, they are stable, and you can see the price development on the left-hand side in the graph in the bottom. EBITDA increased by 51% when comparing quarter-on-quarter. This is partly due to higher share of harvested volume from our own forest and partly due to revaluation effect of the biological assets equivalent to approximately SEK 100 million for the quarter. Wood, there is still a level of high global demand in the wood area. However, right now, we see declining CLS prices in the U.S. and a certain restraint in China while other markets, not least Europe, are still on a very strong level. The demand for wood products are still supported basically by the economic recovery post-COVID, with increased industrial construction and house buildings, as well as the increased sustainability focus. When I presented the Q1 report, I estimated the price increase for the second quarter versus the first quarter to be between 15% and 20%. What we know just now is that the actual outcome for SCA was a bit over 20% for the second quarter. At present, we forecast that the prices will continue to increase sharply. I personally believe that the price increase for the third quarter compared to the second will be up to 50%. Sales was flat when comparing quarter-on-quarter. The rise in prices is counteracted by the divestment of Wood Supply U.K. When it comes to EBITDA, it was up as much as 339%, mainly due to higher prices, but also due to a very good production and a stable cost level. Today's stock level of solid wood products in Sweden and Finland is in relation to the average for the last 5 years, described at the top left on this slide. We can note that the inventory volume are still at a very low level, 13% lower than the corresponding period last year. At the same time, the underlying consumption continues to be good. As can be seen in the diagram to the bottom left, the Swedish and Finnish sawmills production slightly exceeds the five years average, and the production is now running at full capacity to meet the increased demand. When comparing the production rate year-to-date 2021 with the corresponding period last year, we can see that the production level is approximately 10% higher this year, a volume that is completely assimilated by the market. When looking at the diagram to the top right, we note the steep increase in prices for solid wood products and our estimate, and as I also mentioned earlier, the price development will be even stronger now during the third quarter, and best guess up to 50% for the third quarter in comparison to what we've had in the second quarter. The Pulp market is also still strong with a good demand and increase in prices during the second quarter, as you can see in the diagram to the bottom left. When we peaked price-wise, in the end of 2018, we had a peak price of $1,230 per ton. We then reached the bottom during the first quarter 2020, as you can see. At that time, the peak price had dropped to $820 per ton. We had a rather flat price development during the major part of 2020. The pulp prices start to increase significantly. Today, we have an official PIX listing in Europe at $1,340 per ton. Of course, with a less favorable currency relation, and also with a higher discount rate comparing with 2018. We feel that the demand in Europe continues to be strong. However, the price levels in China and the U.S. are now starting to fall a bit, and we can note that today the net price in China is approximately $50 per ton lower than in Europe, and also in the U.S. the net price is somewhat lower in comparison with Europe for the moment. As you might know, we've also seen sharply increasing overseas transport costs, which impact the profitability on these markets negatively. Sales were up 43% and EBITDA 230% in the second quarter compared to the second quarter 2020. This relates to higher prices and lower costs. For us, good and stable production volume also led to a better yield in terms of lower consumption of wood and chemicals, higher energy generation, and so on. Finally, I can also mention that our ongoing project to build a CTMP line at Ortviken industrial site with a total capacity of 300,000 tons is progressing according to time and budget. Inventories have now come down to normal levels both for softwood pulp and for hardwood pulp, as you can see in these graphs. The lack of capacity in the logistical chain, especially to Asia, but also to U.S., still affects the supply situation, which results in increased distribution costs, but also some disturbances in supply. During the coming autumn, a number of planned maintenance shutdowns will be carried out. For SCA, this means that Östrand will stop for a full 20 days at the turn of the months September and October. When we move on to business area Containerboard, I would like to start by stating that our expansion and growth project in Obbola is progressing very well, and we are on time and budget. The sales and EBITDA for the Containerboard business are up 19% and 75% respectively in Q2 2021 when comparing with last year. This is mainly due to increase in prices, but again, also due to good production level, stable costs, also contribute positively. We have also seen that prices for OCC have more than doubled since November 2020, and that will of course affect the result negatively. At the same time, they also support the price development for testliner and thereby indirectly for kraftliner. All in all, this development is positive for SCA. The global kraftliner deliveries from Europe continued to increase also in the second quarter this year. We can conclude that the demand for boxes has been very strong also during the second quarter, and is now on a level above the trend line before the outbreak of the pandemic. This has led to inventories being on a very low level for kraftliner, as you can see in the graph bottom left. Since the bottom position in terms of price Q4 2020, the price for unbleached kraft has so far risen by approximately EUR 200 per ton. As of August 1st, SCA have announced a EUR 50 per ton increase for kraftliner grades. These price increases will successively take effect during the third quarter, and giving full effect during the fourth quarter. With the present situation, the delta between kraft and testliner prices is approximately EUR 150 per ton, and that is historically a rather normal level, I would say. By that, I hand over to you, Toby. Thank you, Ulf. Good morning, everybody. I will start off here with the income statement, and on the top line here with net sales. You can see that we have a net sales in the quarter of SEK 4.8 billion. We have actually lost around SEK 1 billion in net sales from both the exit of publication paper and the divestment of SCA Wood Supply UK since the second quarter last year. You can see here that that's more than compensated then by around SEK 1.2 billion of additional sales from the effects of price and mix, from the effects of the increased volume, and then net of currency effects. That SEK 1.2 billion underlying growth in top line has fallen down to the EBITDA in the next line, that shows that it falls down to basically a SEK 1.2 billion, SEK 1.3 billion increase in EBITDA, shows the good, stable cost development that we have as well. The EBITDA has increased from SEK 1 billion in Q2 last year to SEK 2.26 billion in Q2 this year, with an EBITDA margin then of 47%, which is, of course, a very good level. Coming down, that falls through the same increase to EBIT. Financial items, very stable on SEK 26 million for the quarter. Stable in terms of interest rate and net debt, which I will come back to. We have a profit before tax of SEK 1.85 billion and tax, SEK 372 million, which represents a effective tax rate of just under 21%, in line with the Swedish tax rate, which means we have also a strong net profit for the period of just under SEK 1.5 billion in the quarter and an earnings per share in the quarter, therefore of just over SEK 2 per share. If I move on to give a little bit description per segment and starting on the left-hand side with the forest, top left with the net sales. You can see we're trending slightly lower level of net sales than we were a year ago, and that's basically the effect of reduced wood supply due to the exit of publication paper, so reduced wood supply to Ortviken, which we don't have anymore in publication paper. On the bottom line, you can see a strong quarter from Forest. That's basically due to the fact that we are optimizing wood sourcing through exit publication paper, the largest reason is also that we harvested a significant amount of own forest this quarter, and we have a seasonal pattern with harvesting of own forest. Next quarter, Q3, we normally don't harvest and we won't harvest as much own forest, we won't see as strong effect from that in Q3. Moving across to the Wood segment. Here, you can see that we have a significant increase in sales this quarter, despite the fact that we sold Wood Supply UK in Q4. Q2 is also a seasonally strong quarter for the Wood business, obviously, the very strong pricing development has a big impact here, especially when you come to the bottom line, EBITDA, where the margins really come from the very strong price development and also good production, with a 36% EBITDA margin for W ood in the quarter. On the Pulp business, you see the effect of both increased prices but also increased volumes, with increased both production and delivery volumes this quarter. The good performance you can see also on the bottom line here with an increase in EBITDA margin to 38% in the quarter. We've now had two quarters, just to mention quarter one and quarter two, which are clean with good production with no maintenance stops. As Ulf mentioned, we will have a maintenance stop at the end of Q3 and mainly in Q4. In Containerboard, you see the impact. We had publication paper up until the end of Q4. From Q1, it's a clean Containerboard net sales and the Containerboard EBITDA. The bottom line you can now see is a clean Containerboard margin from Q1. We have a positive price development in Containerboard, which has led to the improved EBITDA picture. Here we've also had two clean quarters with no maintenance stops, and also with good deliveries during Q1 and Q2. We will have maintenance stops in both Obbola and Munksund in Q3, which will have an impact. If I move on to the bridge of net sales. Here you can see the significant impact, basically of price, which is 25% quarter on the same quarter last year. 7% impact from volumes, here in all areas, actually, but just to mention the biggest impact in Pulp, where the continued, the Östrand ramp-up is now at a good volume level, both in terms of deliveries and production, as I said. Then the two big impacts on the right-hand side here from the divestment of Wood Supply UK and exit publication paper. On the EBITDA bridge, again, you can see the big impact from price mix of SEK 1.28 billion, the improvement in volume of nearly SEK 200 million. Then the other largest part here is the effect of currency, which is negative versus last year, due to a stronger SEK of SEK 200 million impact. Moving on to cash flow, if I focus on the right-hand side here, where you can see the half-year cash flow. You can also see the quarterly figures on the left-hand side. The operating cash flow for the half year is SEK 1.6 billion, and this is including effects. We have an increase in working capital in the half year and the quarter. In the half year, it is SEK 691 million, and that really is the impact of increased prices in working capital. We have absorbed that effect in that operating cash flow. We have also had the restructuring costs from the exit publication paper, which we funded in the half year, but we still come out with a strong operating cash flow of SEK 1.6 billion, which basically means, as Ulf mentioned, we are funding the strategic capital investments from operating cash flow. Just coming on to the balance sheet, and maybe I start here on the bottom line, you can see the market price applied on Forest assets. This is the three-year average market price that we take from independent sources of market transaction prices in now including the data for the first half of 2021. That means that the price level is now SEK 300 per cu m, compared to SEK 291 per cu m at the end of December. The increasing trend continues, and it's that price increase that leads to, on the top line here, the value of the Forest assets has increased from SEK 74.9 billion at the end of last year to a value now SEK 76.6 billion. Working capital in absolute value, as you can see, has increased, as I mentioned, due to the higher prices and seasonal higher sales in Q2 from some businesses, from Wood business in particular. When you look at relative to net sales, we've come down from 18% to 17%, so good development relative to sales. Moving down, we have deferred tax, we have other capital employed, which has increased, mainly due to the ongoing construction of the new mill in Obbola. Net debt has increased versus the end of last year, slightly from SEK 7.7 billion-SEK 8.2 billion. We also paid the dividend, of course, this quarter, we've delevered primarily due to improved EBITDA, but a deleverage down to 1.4x debt to EBITDA. Net equity has increased from SEK 72 billion-SEK 74.5 billion. Just to mention on the operating cash flow, we've had a strong period of delivery on operating cash flow, as you can see here, over SEK 3.5 billion of operating cash flow delivered in the last 12 months. Not least in this first quarter, despite the fact that we've also increased working capital due to the higher prices. We funded the restructuring in Ortviken. We've had the strategic CapEx. Despite funding all those, we've managed to deliver and reduce leverage down to 1.4x. It's a strong delivery in terms of cash flow. Finally, just to also highlight, we issued a Green Bond in the quarter, the first Green Bond we have issued. We issued SEK 1.5 billion at a seven-year maturity, which we're very happy to increase and have a long maturity on SCA's average debt with 4.8 years on average. We have a very secure financing position. The green bond is well-aligned with SCA's sustainability platform and especially helping to support the positive contribution to the climate that SCA brings. Finally, the rating on the green bond is also the best possible rating of "Dark Green". I think that's an interesting development in the quarter. With that, I will hand back to Ulf for summary and Q&A. Thank you, Toby. I will not start to repeat everything again, but we can state that we deliver our best quarter ever, 47% EBITDA margin, and also that we can see a big positive effect from the decision that we took last year to leave publication paper. I think by that, we can open up for questions. Thank you. As a reminder, if you wish to ask a question, please press star and number one o n your telephone keypad and wait for your name to be announced. Your first question comes from the line of Linus Larsson from SEB. Please ask your question. Thank you very much, and good day to everyone. Congratulations on the strong quarter. I'd like to start on the Forest side and with the high harvesting levels that you've had, at least in this quarter. Could you please update us on the remaining quarters or, if you like, the full year? What kind of level of harvest should we expect compared to last year, please? Good morning, Linus. Yeah, we had a strong harvesting of own forest this quarter, and as I mentioned, it is seasonal. We do have a high level in normally quarter four and quarter two. For the full year, we expect harvesting to be around the same level or perhaps even slightly less than last year, but around the same level. Therefore, yeah, you'll see that in the second half of the year, then we'll normally have less in quarter three and then a bit more in quarter four. Okay, thanks. On Wood, which was very strong and from the sound of things will be even clearly stronger in the third quarter, given the price indication that you mentioned, Ulf. What's happening on other parameters like how do you see saw log costs developing, for instance, in the third quarter? Yeah, it is hard to say, but honestly, I think we will remain on more or less the same level as we have just now for saw logs. No big differences. Some small increases, but not any major. It's an extremely favorable market for sawmills in the current business environment. How do you see this playing out? Do you see any supplier responses coming through? Do you see any signs of any softening in the order books or any type of other market indications? As it is just now, we see no signs of a softening market. As I said, we've seen that the CLS prices in the U.S., they went down from an incredible level to something which is quite good. We are not too present in the U.S. market. The U.S. market, of course, have an impact on all other markets. Still the demand is strong also in U.S. We heard that Canfor, they will now take curtailments due to wildfires in British Columbia. That might impact also the future need of wood in the U.S. China has been a little bit hesitant during the whole cycle, I would say. Still we do some good volumes in China. The driver just now is the European market. The third quarter, I would say, is we have done all agreements now and we have both in terms of volumes and price, and that one will be close to where I said, I believe. Always you have a seasonal effect in Q4 and from time to time also Q1, but it seems to be a rather continued, rather stable market as it is just now. Mm-hmm. Then just now that you mentioned seasonality, how are you planning to run or how are you running production in your sawmills in the third quarter? What level of production compared to the second quarter, given holiday seasons, et cetera? Okay. In SCA, since 20 years, we have always been running our saw mills at full capacity. We will run. Last year we took some curtailments during the summer due to the COVID situation, normally we run our saw mills as much as we can. It's [twenty] four-seven, you have to stop five, six hours each night and depending on conditions for different mills and where you have bottlenecks and things like that, but we run them for full capacity. We do. Great. Thank you very much. Your next question comes from the line of Robin Santavirta from Carnegie. Please ask your question. Yes, thank you very much for taking my question, and hello to everybody. Now, first related to the Pulp division, if I look at the ASP, the average sales price you reach in Q2 is obviously up quite significantly, but far less than the price statistics show. I do understand that there is a bit of a lag in the P&L impact from price statistics, but could you just remind us or explain the dynamics, how it works? Is it all on a lag of one or two months to the forex price, or is there some spot sales as well? In what markets are you operating in terms of Pulp? Is it only Europe or a bit of North America and China as well? Yeah, if we start with the market, price changes will be gradually implemented, of course. That is one reason why you don't really see that the result in the P&L follow the fixed prices announcements and things like that. In many cases, and in most cases, we follow the fixed price. You have currency effects. You have different discount rates and things like that, and you know the structure behind that. For us, we are very much focused on Europe as our main market, we will continue to be that. Today, we feel that is a favorable place to be in. It was maybe better to stay in China during the first quarter and also during the fourth quarter, just now, I think Europe is the best place to stay in. U.S. is a good market for us, and I don't know if we release a big volumes we do there, Toby. Oh, but we- April We do have sales to the U.S., but very little to Asia. Is that we. Yeah. Yeah. Thanks. I do understand the lag. You don't have any sort of rule of thumb that could help us sort of understand the lag sort of compared to the PIX prices in Europe? A rule of thumb, it's probably two to three months in terms of time lag, overall when you take into. Yeah. Compared to when maybe PIX is published or prices are published. Good. That is helpful. Maybe for you, Toby, two sort of financial questions. First of all, the paper business, you still report some losses, some are drag in the other division. What is the amount and how long should we expect that to continue? Number two, could you just give some kind of indication about CapEx levels for this year and maybe some indication for next year as well? Thanks. Yeah. As we've described, we don't have costs for the paper division anymore. At the end of Q1, that was finished, we do have costs for maintaining the Ortviken site up until we start the CTMP, which are SEK 20 million-SEK 30 million per quarter, which we've guided for, that's the same this quarter. We're in line with that. The CapEx. The guidance we've given before is we have an annual current CapEx level of SEK 1.2 billion-SEK 1.3 billion. I think we stick with that guidance for the year. Of course, strategic CapEx is, I don't know if you're interested in that as well, we have the Obbola Project is the biggest one, CTMP in Ortviken are the two large strategic CapEx. There, yeah, we expect, as we said before, around SEK 3 billion-SEK 4 billion in strategic CapEx for the year. For the year. What about next year? Just give me a moment. This year is the biggest year by far. More like SEK 2 billion-SEK 3 billion next year, depending a bit on the outcome this year. All right. That is helpful. Thank you very much, Ulf a nd Toby. Next question comes the line of Martin Melbye from ABG. Please ask your question. Thank you. Regarding the transaction price on the Forest assets, you used a three-year rolling average, and it's now at SEK 300. What is the last data point in that exercise? We give the three-year average margin, but it's been basically a steady development during those three years, which we've seen continue. We add data then for the first six months. I think also, most of the transactions do happen in the second half of the year, so it's not that many transactions in the first half year, but we've seen the trend continue with positive price development. There are market statistics published, also, so you can see Ludvig & Co., for example, publish market statistics, and they follow the same. If you want to see the public market statistics, that's a good place to turn. Okay. You gave the quarter to quarter price change on the sawmills. Could you try to indicate the same on Pulp and Containerboard, please? Yeah. The answer is no. We know in Pulp, as I said, the official PIX price today is $34 per ton. We are just now in negotiations for July, we don't know really the outcome of that. As I said, we feel it is a rather stable situation in Europe. It has been a little bit weaker in China and the U.S. Seasonally, you normally have a slightly weaker situation in the summer. On the other hand, we also know that we will see a lot of maintenance stops coming on stream now. As I said also, for Östrand, we will have a stop in September, October, more than 20 days. That's a quite big one. In Containerboard, I said that we have seen a total price increase of EUR 200 per ton. We have another announcement now from August 1st of EUR 50 per ton increase for kraftliner grades. I think they will come through, and I think they will successively take effect during the third quarter, giving full effect during the fourth quarter. That's my best guess just now. I could also add, Martin. In the graphs we give in the report, you can see basically for the last quarter, the net mill price development for Pulp and Containerboard in those index graphs. The pricing is relatively public for Containerboard and Pulp. I think the other reason is also that when it comes to Wood, we have relatively good visibility on the coming quarter, which you don't have quite the same level for a bit longer out for Containerboard and Pulp. I see. [audio distortion], what is the key reason why the saw log price is not increasing in this dramatic saw milling market? Why isn't the forest owner getting paid? Yeah, we are the biggest forest owners. I think that is one reason. We are the biggest private forest owner in Europe, and we can secure a safe and stable supply, and I think for all parties, the best thing is to have a stable price on raw material because then you can plan your activities in the forest due to what's needed in the forest, thinnings, clear-cut, and things like that. I think that is the main reason. One good thing for us just now, as I mentioned, is the decision to leave publication paper, and by that decision, we haven't been forced to import any wood, more or less, during the first and the second quarter. That has contributed well also. We have a stable supply and- Was it possible to quantify that effect? Not really, but it is a substantial effect, I would say. Okay. Thank you. Your next question comes on the line of Cole Hathorn from Jefferies. Please ask your question. Morning. Thank you very much for taking the question. Just following up on the Wood products. You're calling out the sawn timber business, potentially up as much as 50% quarter on quarter. Could you give us a little bit more color on the trade side, where I imagine pricing will be up less than the sawn timber, just so that we can understand the dynamics of that part of the market and just remind us how much of the Wood division, your traditional sawn for construction is versus the other components? The European market has announced a number of things with the New EU Forest Strategy, the Fit for 55. Could you give us your initial thoughts on how you're thinking the new Forest Strategy will impact your business, firstly from ability to harvest versus the forest sink debate, and then secondly, the prioritization of the EU on using wood in construction, because my outlook there of using wood in construction is very positive. Thank you. Yeah, if I start with the strategy from the European Commission, and Toby can say some words about the Wood business. First of all, we welcome, of course, the idea to achieve a 55% emission reduction, but we do not fully share the Commission's view of the role of the forest and the forest industry. I think the most important thing and the best contribution we can give from the Forest side is to continue to manage the forest as active as we can. It is a fact that it is the growing forest that can contribute with the net binding capacity of carbon, and for us, it's more than five million tons per year. The reason behind that is for every tree that we harvest, we replant two to three new ones, and for each new generation that comes up, we will have a 30%, 40% higher growth and all that kind of things. The other and even more important thing is that we can supply more raw material to the market when we increase the production in the forest and the growth in the forest, and by that, we can replace plastic with paper, we can replace fossil-based fuels with biofuels, and we can replace steel, concrete with solid wood constructions. Here for us only that give another five million tons per year. Then, of course, we should always try to reduce our emissions from our industry, and that we also do every time when we look into new investments and things like that. I think that is the basics. I don't like the idea that you can maybe see and read about when it comes to looking upon the forest as a carbon sink. That's not the right utilization of the forest. We have the best forestry in the world in the Scandinavian countries, and let us continue to do that in the best way. I think that is also what will happen now. We don't know really, to be honest. This is not a decision from the Commission. Now it will be discussed nationally, it will be discussed in different working groups and things like that, and the devil will be in the details. It's really important for us now to follow what's inside. When you say we start with no clear-cutting, but that will not be the case, of course, but what kind of restrictions will occur and how can we handle that? I think also one important thing is to see that there is no basis for having to choose between the use of forest and the protection of biodiversity. We can and we have balanced that in a good way in many years. If you look into Swedish forest today, you have more dead wood, you have more broadleaf trees. It hasn't really disappeared any species from the Swedish forestry the past 20, 30 years. We have more than doubled the standing volume in Swedish forests since 1950. At the same time, we have more than doubled the harvesting level annually. That is a true success story. I believe that when we start to discuss this into details, we can also show the good thing by actively continue to manage our forests. Yes. I can add just to clarify on the Wood business Cole. We have around 70% of the sales from the wood businesses, the sawn products, and 30% roughly is what we call wood supply, which is more like a traded type business, like you say, but with maybe some kind of additional conversion operations on the wood before it's sold. The price development that Ulf mentioned is really applied to the sawn products. The traded products go at much more lower trading margin, even though we have had a strong Q2 from wood supply. It's normally quite seasonal. We have a strong Q2, and then it has a weaker period in the second half of the year, just due to seasonal reasons. Thank you. Your next question's on the line of Oskar Lindström from Danske. Please ask your question. Good morning to you all. Three questions from me. The first one is on what's called force majeure. Are you seeing any impact from the threat of closure of Sweden's last cement plant due to not getting its environmental permit renewed or likely not getting it renewed? Do you see any similar impacts in other countries causing sort of a shift from, or an acceleration of the shift from cement to wood? Also, any impact on either demand and/or supply from the flooding in Central Europe? That's my first question. Do you want me to take the other ones? No, can we start there? Yeah, it's a very good question, Oskar. We are, I think all a little bit surprised about the cement plant. It's really hard to gauge what's going to happen there. If it will be closed down, I think that will have a big impact on the Swedish building industry, and I heard some figure here that between 200,000 and 300,000 jobs were threatened if this will come through. I cannot really believe that this will happen. It would be 100% crazy, of course, because you need to replace that cement with cement from places where you don't produce it in the same environmentally friendly way that we do in Sweden. I cannot really believe that this will come through. If it comes through, I believe that it will have a negative impact, of course, when it comes to building activities, definitely so. Structurally, I don't like really to speculate. We need, in many cases, a combination between wood and cement, and I think the important thing is to find the right balance and the right combination. So far, and that was the last part of the first question, we haven't seen any negative effects of the flooding in Central Europe. Not material. Logistics is more problematic around, but it's not material. No major things. Yeah. So. Yep. If I can just follow up here actually on this. Are any of your sites facing renewed environmental permits that we should be aware of? No. My second question is on capital allocation. You're now in the middle of the Obbola project, CapEx, and CapEx is going to be high this year and then come down a bit next year as Toby mentioned. You already have a strong balance sheet. You have very strong cash flow at the moment. You must be thinking about what to do with the money sort of once Obbola is completed in terms of strategic projects or acquisitions. What's your own thinking here about growth opportunities beyond? I lost you a little bit, Oskar, but growth opportunities, was that the question? Exactly. Given how strong cash flow you're now getting. More money in the bank usually sort of gets one thinking about what one could possibly buy with that money. That's my question. The first thing just now is that we are 100% focused on delivering on the two big growth projects that we are performing just now. Obbola is a super big project. The CTMP project is also a big one, and at the same time, we are also performing a big billion SEK project in Bollsta. We are 100% focused on delivering on these projects. I think we are all a little bit surprised of the strong cash flow and the strong market situation that we have just now. Last autumn, we were not really sure of what kind of market we should meet for 2021, and now we have this market. Of course, we look into different opportunities, and when we have something to talk about, we will do that and announce that. Would you like to add something, Toby, or? No, I think just that we are very focused on delivering the projects and on time, on budget, and that's, I think, the important focus. They deliver a significant growth for SCA, yeah. It was also quite a big thing to do to divest or to close down the publication paper business. We had to take away 800 people in this region. One thing, of course, the people at mill site, but from my perspective, if we reduce the sales by 20%, we have to reduce the manning all over the place by 20%. That goes also for headquarters and staffs and everything, and we are just now doing that, and that is also what you can see in our figures. We have been very focused on also delivering on that. That's called an exit project. We have a lot of things to do just now just to deliver on what we have promised. Yeah, that sounds good. A final question. Your growing forests bind about five million tons of CO2 per year, as you mentioned, and then your products substitute as well. What would be the level of CO2 sinking every year if you stopped harvesting and stopped replanting? I think that would be negative because I think this is an important part of the debate because, if you just stop harvest, short term, you will continue to grow and maybe add some more carbon in the forest for a short while. If you then include the product side, then it will be negative because if you cannot really supply the market with the renewable fiber, then you have to increase the use of fossil-based materials and fuels. I think it is already from the day one a negative thing. I think we are losing the debate. We don't have the ability to come through with our arguments. The thinking and the debate in Brussels always stop at the forest side, which is not the right thing to do. You have to include the possibilities and the potential we have when it comes to substitutes. We have to improve in the communication here. Even short term. Yeah I think it's negative. The argument, again, about biodiversity, that's not an argument. You don't have to choose between the use of forest and the protection of biodiversity. You can do it both. We can always do things better, and we will always look into possibilities to do things better, but we can do it both. Yeah. That's an important debate, no doubt. Thank you. Those were my questions. I think, Oskar, you had a very interesting article in "Svenska Dagbladet" the other day written by Björn Hägglund. He was the [Dean of Faculty of Forestry in the Swedish University of Agricultural Sciences], but he's been the CEO of Stora and so on. That was very well-written and well-structured. I think you have a lot of good facts in that one. We will try to spread that article, really. I think that is the best one written in this field. It was very good. Yes, I agree. Thank you. Your next question comes on the line of Justin Jordan from Exane. Please ask your question. Thank you. Good morning, everyone. Good morning, Ulf and Toby, well done to every SCA employee for a very strong first half performance. I've got three separate questions. Firstly, just following up from Cole's earlier question, we're now three months on from, I guess, the first deliberations from the EU taxonomy. Can you just give us an update as to what that might mean for SCA and potentially the proportion of your revenues that may be taxonomy-aligned? Secondly, just on forests, clearly, I know you're constrained from being a net purchaser of forest assets in Sweden, can you update us on where you are in forest purchases in Estonia and elsewhere across Europe? I've got a follow-up question, please. I can take the first. Obviously, it's a moving picture and developing picture with taxonomy, but we do expect to have to then do some reporting from the beginning of next year. I think one thing it's important to note is in the first stage, we'll be reporting how much of our business is eligible for taxonomy according to the two environmental targets which have been worked through by the European Commission so far. There's still four which remain, which will come in the future. According to those two, then as we understand, we will then identify how much of our company in terms of sales and OpEx and CapEx is eligible. That doesn't mean that they're aligned. It will come later then how much of that business is aligned. That's really the kind of measure of whether you're environmentally sustainable or not in your operations. The first stage is really just to identify eligibility. It's not a key if more or less your business is eligible, it's just really how much of your business is covered by the parts which are established today. I think it's important to recognize that in the first stage, and that's how it will be for the first two years, basically. We expect with the two climate targets, and particularly Climate Change Mitigation, which is one of them, that the Forest really meets that target very clearly. The rest of the business is still unclear today. Probably the main climate target, which is still to come around sustainability, will cover our other businesses very clearly. With the targets as they are today, it's not clear whether they will cover the industrial businesses or not. When they come, we expect them very much to be part of the transition to a circular economy. I think it's still hard to give clear answers, I'm afraid, Justin. I think, in summary, we'll expect to be reporting basically only on eligibility, but that clearly the Forest will be part, and we'll have to work through to see if the rest of the business is covered in this first wave or will be covered later on. Okay, we have the question about, I don't know if I get you right, was the question how much where we are in our program for buying? Yeah, can you, sorry, repeat, Justin? Sorry. Can you repeat the question? Sure. Clearly, you're the largest commercial forest owner in Europe. You're concluded from being a net forest purchaser in Sweden. Clearly, you have clear plans to expand elsewhere in Europe, particularly Estonia. Can you just update us as to where you are on your previously announced plans to be a net forest purchaser elsewhere across Europe? No, we have a plan to acquire 100,000 hectares of forest land in the Baltic States, so that is Estonia and Latvia. Yes. We are at around 50 today, so we're around halfway. Okay. Thank you. Just one final question for me. Clearly, SCA, anyone who's tracked you as a shareholder or an analyst for a number of years will know you're incredibly prudent in capital allocation. If I was, I don't know, a private sawmill operator in Europe or North America right now, I'd be sorely tempted to run the maximum number of shifts I could or potentially add some more capacity to my milling production. I guess, given the strong demand we're seeing and what seems like exceptionally strong pricing outlook for W ood in Q3, what's to stop there being less disciplined peers adding more capacity to ultimately, I suppose, have a supply side response? I appreciate it won't be SCA doing it, not everyone else in the industry is as disciplined. Maybe I can take it first, and then, yeah. It all comes down, in the end, to the raw material. You can't add capacity if you haven't got access to the raw material, and that's why our sawmill business is very closely linked to the forest and the raw material sourcing we have. Of course, right now in a strong market, everyone's making good money, and we're optimizing our production, of course, to optimize. I think, in the long run, there's no point building extra capacity if you haven't got saw logs to be able to saw. Yeah. I think also that might be the big question mark going forward, to get access to saw logs. For a sawmill, 75% of the cost is related to the raw material. If you don't control that one, then you're lost, definitely. That's the reason also just now I think why we cannot. We run at full capacity, you cannot really add too much volume to the market as it is just now. Okay. Thank you both, and best wishes for the second half of the year. Your next question from the line of Johannes Grunselius from Kepler Cheuvreux. Please ask your question. Yes. Hi, everyone. Most of my questions have now been answered. Maybe you could help me on the CapEx side, what to expect in numbers for this year and also 2022. Any changes from the last update there, please? Hi, Johannes. Yeah, I can just update. For current CapEx, we expect SEK 1.2 billion-SEK 1.3 billion for the year, and that's our normal level. For strategic CapEx, we expect SEK 3 billion-SEK 4 billion this year, and the largest is the Obbola project, of course, and then we expect SEK 2 billion-SEK 3 billion next year. Okay. Same as before? Same as before. Yeah, no significant change. Yeah. Also on the cost side and the cost inflation theme, it seems to me that you will have quite stable cost here, Q3, Q4. Could you talk a little bit about this? Are there any sort of areas where you see a big cost inflation at the moment for you? Also, if this could hit the industry, in terms of your competition? Thanks. As I said, we've had a very stable cost level, Q1 to Q2. Where we can see increases, of course, is in the Logistics part. There you can see quite substantial cost increases. You have questions about mix and things like that, and the worst scenarios you've seen when you go overseas, and we are not too present overseas, so we have been a little bit protected from that one. Otherwise, I think we've done a good job. We have a central purchase organization, and as I said, when we took the decision to leave publication paper, we also put very clear targets for each part of the company, and they have all more or less delivered on that. One thing was, of course, to really keep a close eye on the cost side. What is maybe I think the biggest cost for us is, of course, the raw material and we have, as I said earlier, a good situation when it comes to wood supply, which is good. We might see some small increases in sawlog prices and things like that, but no major things. I think we are in good control for the coming quarters now. I don't know if you'd like to add something, Toby, here or? No. Maybe I could just to give a little bit more, I think as we’ve mentioned, the wood supplies is the main raw material. When it comes to other materials or chemicals, we do see increases. We have relatively limited maybe compared to others more in publication paper and other segments that are more intensive in terms of other materials and chemicals. We also do have the Logistics area where we have seen maybe around SEK 30 million higher logistics cost versus Q2. We expect an increase also Q3 from a bit restricted access to containers and higher container prices and so on. I think more disturbing in that perspective is the service level. Yeah. Okay. Understood. Maybe a final question from my side. You have an interesting chart there on page 11 showing that also the deliveries of kraftliner have increased pretty dramatically, I would say, over the last year in Europe. Where are we now in terms of capacity constraints in Europe? At this point, are you actually seeing that there is a lack of kraftliner material in the market? Is that something you see now, or is that something that could happen in the coming months? It seems that deliveries have come up so much, but I suppose there is a capacity constraint at some point in Europe. That's my question. Yeah, that's a good question because we don't really know. What we saw when Oulu came on stream and added 400,000 tons of annual capacity, that was immediately assimilated in the market. We see less import to Europe from U.S. just now. That can be one explanation. I feel that when we add capacity in kraftliner, that is immediately assimilated in the market, and so maybe we don't know the real need. It's always a combination between kraftliner and testliner, and we use kraftliner for certain purposes and testliner for certain purposes. Many times it's just a question of material efficiency, and that is also what drives prices and the mix between kraft and test. In some areas, you need kraft. When you need strength, when you need wet strength, when you need some other things, then you need to use kraftliner, of course. We feel just now you could sell much more kraftliner from SCA if we just had the production. In 2023, we will add capacity, and today we feel very confident that that will be needed and demanded from the market. Okay, got you. Thank you. Your last question is on the line of Mikael Doepel from UBS. Please ask your question. Thank you. Just briefly following up firstly on the Fit for 55 and Forest strategy. What's the time schedule there to take a decision for the European Commission to make a final decision on that one? That would be my first question. On sawn timber, I think everybody's scratching their heads a bit given the quite significant price increase that we have seen and continue to see. I guess the question there is that how much can the market take before it starts to impact demand negatively? Do you think we are close to that level in Q3 given the hikes, or do you think there's still room for more? Finally, on the P ulp markets in Europe in particular, as you pointed to, seems to be a good demand situation here. Prices have still gone up in June. At the same time, we do see China prices having come down quite a bit. Do you think that's going to have any impact on the European market, i.e., are the European prices coming under pressure now, or do you see a situation where Europe can actually remain quite stable despite China coming down? Thank you. If we start with the market for sawn timber, it's very hard to say. As you know, normally it's a volatile market, even if you're fundamental and structurally you see some positive long-term effects when it comes to sustainability and things like that, which is favorable for wood as a material. Short-term, it's always a question of supply and demand. As I said, for the third quarter, no doubt, we've already set prices and volumes. I also feel that, I think it will be stable in the fourth quarter. Not too much happens in the fourth quarter. After that, we don't know really, will we have a fourth wave of COVID? What kind of support from governments will we see? Can we start to travel or do we continue to spend a lot of money on DIY and things like that? All these kind of questions will have an impact on the sawn timber market. Structurally, I think, it is, step by step, a better position for sawn timber for sustainability reasons and things like that. Short-term, it's always a question about supply and demand and I cannot really give you a better answer than that, I think. You had some questions about Fit for 55, and the strategy that we have now been presented from the Commission is not a decision, it's more like a vision or something like that. After that, we will see more detailed suggestions, and I'm 100% convinced that we have to put in a lot of effort in that process, otherwise we will come out with legislation and things like that will not be positive for the industry. Much more important, it will not be positive for the climate because it will be negative if we have any big restrictions on how to manage the forest and how to provide the market with renewable materials from the Scandinavian forest, then it's not good for the climate. We will see different timelines in different areas and, as I said before, the devil will be in the details, and we will put in a lot of efforts from SCA side, but we will also do from the Swedish forest industry, but also from the European Federation, CEPI, and so on. I think it will be a couple of interesting quarters coming from now on. You had a third, I could maybe take the third one. Yeah. Yeah. Was it on the Pulp you asked about, basically the pulp prices? I'm sure we can give much more color. Basically, when Europe is now at $1,340 per ton, as I've mentioned, and similar level to U.S. China is always a more volatile market with the spot prices, which go up and down. Sometimes there's more or less volumes also sold, and it also sometimes reflects the logistics situation to China. I don't think you can really draw any sort of directional conclusion. The momentum in Europe is still up and is really catching up with the level certainly in U.S., and where it's been in China. We have to see. Mm-hmm. Okay. Thank you very much. There are no further questions at this time. Please continue. Okay. Thank you very much. This concludes this presentation of SCA's second quarter results. I would like to welcome you all back by the end of October. Thank you for listening in.