{"segments": [{"speakerId": "S1", "sentences": [{"start": 0, "end": 7, "text": "Good afternoon, everyone, and welcome to the presentation of Metsä Board's results for January to September 2024."}, {"start": 7, "end": 11, "text": "My name is Michael Joutseno, and I'm the CEO at Metsä Board."}, {"start": 11, "end": 14, "text": "Here with me is CFO Henry Cederholm."}, {"start": 14, "end": 19, "text": "So let's go through the presentation first and then take the questions."}, {"start": 21, "end": 24, "text": "Let's start with the Q3 summary."}, {"start": 25, "end": 29, "text": "In the paperboard business, the third quarter remained quite similar to the previous quarter."}, {"start": 30, "end": 35, "text": "Our paperboard volumes increased slightly and prices remained flat."}, {"start": 35, "end": 45, "text": "Paperboard production volumes increased by over 100,000 tons compared to Q3 last year, and by almost 60,000 tons compared to the previous quarter."}, {"start": 45, "end": 61, "text": "Last year, volumes were curtailed by production adjustment measures and major investment shutdowns; in Q2 this year, the production was impacted by political strikes in Finland and the gas explosion at the Metsä Fibre bioproduct mill in Kemi."}, {"start": 62, "end": 71, "text": "However, the past Q3 also included many planned maintenance shutdowns impacting not only volumes but also profitability.<br /><br />"}, {"start": 73, "end": 79, "text": "Delivery volumes in market pulp fell sharply and the main contributor was weak demand in China."}, {"start": 80, "end": 83, "text": "Metsä Board had no deliveries to China during Q3."}, {"start": 84, "end": 93, "text": "The gas explosion at the Kemi bioproduct mill in March led to significant production and sales losses, as well as extra costs in Q2."}, {"start": 93, "end": 102, "text": "We have estimated that the negative impact on our operating result totaled €40 million, including the impact from Metsä Fibre's results share."}, {"start": 104, "end": 106, "text": "In the Q3 operating result."}, {"start": 106, "end": 126, "text": "We recorded €23 million in insurance compensation, including the impact from Metsä Fibre result share. Negotiations with the insurance consortium to compensate the remaining estimated financial losses are continuing after the review period. We then renewed our dividend policy."}, {"start": 126, "end": 139, "text": "According to the new policy, our target is to pay a dividend of at least half the result for the financial period over time, taking into account the company's future investment and development needs."}, {"start": 140, "end": 143, "text": "There is no major change to the previous policy."}, {"start": 143, "end": 149, "text": "Dividends will continue to be an essential element of our capital allocation."}, {"start": 151, "end": 157, "text": "After declines in 2022 and 2023, the trend in paperboard delivery volumes has been upwards.<br /><br />"}, {"start": 157, "end": 162, "text": "In 2024, we have witnessed moderate growth in every quarter."}, {"start": 162, "end": 171, "text": "In the third quarter, deliveries were 14% higher than in the same period last year and 3% higher compared to the previous quarter."}, {"start": 172, "end": 177, "text": "Year to date, delivery volumes totaled over 1.1 million tons."}, {"start": 177, "end": 182, "text": "I think this is a good achievement, given the challenges we have faced earlier this year."}, {"start": 183, "end": 185, "text": "Also visible in the graph."}, {"start": 185, "end": 190, "text": "The demand growth was rapid in the first quarter and was driven by restocking activities."}, {"start": 191, "end": 198, "text": "After that, demand growth has slowed as a result of higher living costs for consumers."}, {"start": 198, "end": 205, "text": "Purchasing behavior remains rather cautious, and more consumption is directed toward services than products."}, {"start": 206, "end": 212, "text": "And here are the paperboard sales, split by region and by product volume."}, {"start": 212, "end": 216, "text": "Export sales have strengthened in each market area compared to last year."}, {"start": 216, "end": 228, "text": "EMEA especially has performed well, despite the fact that Asian import volumes have continued to grow in white kraftliners, deliveries have been stable."}, {"start": 228, "end": 246, "text": "The explosion at Cami Fibers, sorry, Metsä Fibre Kemi bioproduct mill, somewhat affected our Kraftliner production and deliveries. Even though we managed to restart the production with dried pulp and by using alternative energy sources quite quickly after the accident."}, {"start": 248, "end": 254, "text": "Now let's move on to Market Pulp, which has shown a lot of volatility recently."}, {"start": 255, "end": 261, "text": "Metsä Board's year-to-date market pulp delivery volumes increased compared to the corresponding period last year."}, {"start": 262, "end": 268, "text": "However, volumes fell sharply in Q3, largely driven by the low activity level in China."}, {"start": 270, "end": 275, "text": "Metsä Fibre's total delivery volumes in 2024 are somewhat behind those of last year."}, {"start": 276, "end": 285, "text": "In September, Metsä Fibre announced that it will adjust production due to market conditions during 2024."}, {"start": 285, "end": 290, "text": "Demand for market pulp has been at a good level in Europe but slower in China."}, {"start": 291, "end": 295, "text": "However, buying activity in China picked up in September."}, {"start": 295, "end": 303, "text": "At the same time, pulp demand in Europe has softened slightly, mainly driven by lower activity in printing and writing."}, {"start": 303, "end": 304, "text": "End uses."}, {"start": 305, "end": 311, "text": "Unlike hardwood pulp, the supply of softwood pulp has been limited for several reasons."}, {"start": 312, "end": 319, "text": "First, there have been a lot of planned, but also unplanned, as well as market-related shutdowns."}, {"start": 320, "end": 325, "text": "Earlier this year, political strikes in Finland limited pulp production."}, {"start": 325, "end": 330, "text": "Additionally, the global logistical bottlenecks have persisted throughout the year."}, {"start": 331, "end": 338, "text": "Softwood pulp prices have risen sharply in 2024 in Europe but have now started to decline."}, {"start": 339, "end": 343, "text": "In China, the price changes have been more moderate."}, {"start": 346, "end": 359, "text": "And now the key sustainability figures and the year-to-date development, our target 3.2 has shown an improvement, but has still not reached the target, which of course is zero."}, {"start": 359, "end": 360, "text": "Accidents."}, {"start": 361, "end": 372, "text": "The share of certified wood fiber was at 92%, which is above our target of over 90%. Fossil-based CO2 emissions have also been well managed."}, {"start": 372, "end": 380, "text": "Scope one totaled 138,000 tons, very much in line compared to the last year's development."}, {"start": 381, "end": 387, "text": "Energy efficiency and water usage are moving in the right direction but lagging behind the targets."}, {"start": 388, "end": 392, "text": "And now I will hand over to Henry to present the financials.<br /><br />"}]}, {"speakerId": "S2", "sentences": [{"start": 392, "end": 394, "text": "Thank you, Mico, and good afternoon."}, {"start": 395, "end": 400, "text": "Our quarterly sales have remained fairly stable, landing at €499 million in Q3."}, {"start": 401, "end": 404, "text": "Year to date sales were just under €1.5 billion."}, {"start": 404, "end": 407, "text": "While in the comparison period, they were slightly above this."}, {"start": 407, "end": 413, "text": "The positive impact from increased paperboard volumes was offset by lower prices."}, {"start": 413, "end": 415, "text": "The operating result for January."}, {"start": 415, "end": 416, "text": "September."}, {"start": 416, "end": 420, "text": "€73 million was well behind the corresponding period last year."}, {"start": 420, "end": 422, "text": "\n€121 million."}, {"start": 422, "end": 427, "text": "The operating margin for the review period was 4.9%."}, {"start": 428, "end": 432, "text": "And now let's take a closer look at the items that affected the result."}, {"start": 432, "end": 433, "text": "Starting from July."}, {"start": 433, "end": 437, "text": "September compared to the same quarter last year."}, {"start": 437, "end": 443, "text": "Our paperboard deliveries increased by almost 50,000 tons and supported the operating result."}, {"start": 443, "end": 456, "text": "Higher pulp prices had a positive overall impact on profitability, even though the cost of purchased pulp was higher. Other variable costs, such as energy and chemicals, became cheaper, whereas food costs remained stable."}, {"start": 457, "end": 468, "text": "The results share from Metsä Fibre was higher and, as already mentioned, Metsä Board's Q3 operating result includes a total of €23 million in insurance compensation."}, {"start": 468, "end": 474, "text": "This includes the impact from Metsä Fibre's results share, which accounted for almost half of the compensation."}, {"start": 475, "end": 482, "text": "On the negative side, the main contributor was the lower folding boxboard price, which also had a negative impact."}, {"start": 482, "end": 492, "text": "Q3 maintenance costs and employee costs were higher, and finally, depreciation has increased due to major investments completed last year."}, {"start": 492, "end": 497, "text": "Then, moving on to the whole review period January to September."}, {"start": 497, "end": 501, "text": "We have a lot of the same result elements as in the quarterly comparison."}, {"start": 501, "end": 508, "text": "The main positives were increased delivery volumes, higher pulp prices, and lower energy and chemical costs."}, {"start": 508, "end": 517, "text": "On the negative side, we had lower folding boxboard prices, increased food costs, more maintenance, and higher depreciation."}, {"start": 517, "end": 522, "text": "The sale of unused emission allowances was €20 million lower than in the previous year."}, {"start": 523, "end": 530, "text": "Metsä Fibre's profitability was weakened by lower pulp volumes and higher wood costs, among other factors."}, {"start": 530, "end": 537, "text": "And finally, both the mill explosion and political strikes in Finland have had substantial impacts on our results."}, {"start": 537, "end": 543, "text": "The losses caused by the explosion were partly offset by insurance claims received in Q3."}, {"start": 543, "end": 548, "text": "Although negotiations with the insurance consortium are ongoing."}, {"start": 550, "end": 559, "text": "In Q3, the comparable return on capital employed jumped to 7.3%, and for January to September it was at 4.3%."}, {"start": 560, "end": 563, "text": "Rolling 12 months was at 3.4%."}, {"start": 563, "end": 569, "text": "These are still low percentages and clearly below our target of over 12%."}, {"start": 569, "end": 574, "text": "Capital employed at the end of the period totaled roughly €2.5 billion."}, {"start": 576, "end": 580, "text": "Our cash flow has been unsatisfactory and has declined this year."}, {"start": 580, "end": 591, "text": "Working capital has been growing from a very low level at last year's end, due to an increase in operational activity and the completion of a major investment last year."}, {"start": 591, "end": 600, "text": "In addition, dividend payments from Metsä Fibre clearly dropped by €10 million this year compared to €83 million last year."}, {"start": 601, "end": 607, "text": "Combined with low profitability, this has kept the operating cash flow negative for almost the entire year."}, {"start": 607, "end": 614, "text": "The rolling 12-month operating cash flow was €112 million, and free cash flow was €25 million."}, {"start": 614, "end": 615, "text": "Negative."}, {"start": 617, "end": 623, "text": "Our net debt rose to roughly €350 million, the highest level in the last five years."}, {"start": 623, "end": 631, "text": "In 2024, liquidity decreased due to unsatisfactory cash flow and dividend payments of roughly €90 million."}, {"start": 631, "end": 636, "text": "In addition, interest-bearing debt has increased somewhat since the end of 2023."}, {"start": 637, "end": 647, "text": "Our leverage is now at 2.0, which is still below our maximum target level of less than 2.5, and that's all from the financials.<br /><br />"}, {"start": 647, "end": 649, "text": "So now I'll hand it back to Mika."}]}, {"speakerId": "S1", "sentences": [{"start": 650, "end": 651, "text": "Thanks, Henry."}, {"start": 652, "end": 658, "text": "So let's look at investments before turning to ongoing and future investments."}, {"start": 658, "end": 662, "text": "Let's recall two major investments we completed last year at Husum and CME."}, {"start": 662, "end": 665, "text": "Both projects are still in their ramp-up phases."}, {"start": 666, "end": 676, "text": "In Husum, we have increased the export capacity by 200,000 tons, which we expect to be fully available on the market in 2026."}, {"start": 676, "end": 686, "text": "In CME, we increased annual Kraftliner capacity by 40,000 tons, which we expect to be fully available on the market in 2025."}, {"start": 687, "end": 698, "text": "Next summer, there will be a longer shutdown at the integrated mill when the new evaporator units at Metsä Fibre Kemi bioproduct mill will be installed."}, {"start": 700, "end": 716, "text": "During the installation, which is expected to last two months, we can utilize the same special arrangements we did this year to keep production running and ensure our customer deliveries as part of the \\\\$110 million investment in Kemi."}, {"start": 716, "end": 721, "text": "We bought an unbleached pulp production line from Metsä Fibre."}, {"start": 721, "end": 724, "text": "This transaction was closed in September."}, {"start": 726, "end": 734, "text": "And during January to September, our total investments were €121 million for the whole year."}, {"start": 734, "end": 740, "text": "We estimate the total investments to be €175 to €200 million."}, {"start": 740, "end": 750, "text": "The estimate has increased from the previous estimate of around 150 million, due to the purchase of an unbleached pulp production line from Metsä Fibre."}, {"start": 752, "end": 756, "text": "And now, our ongoing and planned investments."}, {"start": 756, "end": 761, "text": "Earlier this year, we made an investment decision to renew the paperboard machine in Simpele."}, {"start": 762, "end": 767, "text": "This is now ongoing, with an estimated investment value of €60 million."}, {"start": 768, "end": 776, "text": "The next steps in Simpler will be the renewals of the paperboard finishing area and mechanical pulp production, as well as a new power plant."}, {"start": 778, "end": 788, "text": "At the Kyro board mill, we have started a program to improve the performance of the current barrier board and expand its end-use areas in Horsham."}, {"start": 788, "end": 793, "text": "The second phase of pulp mill renewal will include a new pulp drying machine."}, {"start": 794, "end": 799, "text": "The first phase included the new recovery boiler and a turbine, completed in 2022."}, {"start": 800, "end": 809, "text": "And finally in Horsham, we have started a program for new products on the current BM2 White Kraftliner production line."}, {"start": 809, "end": 815, "text": "The aim is to find innovative solutions for the growing food and food service packaging segment."}, {"start": 816, "end": 819, "text": "And now the near-term outlook."}, {"start": 820, "end": 828, "text": "Overall demand for consumer products continues to be impacted by consumer purchasing power and general purchasing behavior."}, {"start": 829, "end": 831, "text": "Seasonally slower."}, {"start": 831, "end": 842, "text": "December may have some impact on demand, and we therefore expect our paperboard delivery volumes to decrease slightly from Q3, but average sales prices to remain stable."}, {"start": 843, "end": 847, "text": "Total costs, excluding pulp costs, are expected to increase.<br /><br />"}, {"start": 847, "end": 851, "text": "In particular, wood costs and fixed costs are rising.<br /><br />"}, {"start": 852, "end": 860, "text": "Maintenance costs will be clearly lower than in Q3, and the positive impact from this will be at least €10 million.<br /><br />"}, {"start": 861, "end": 869, "text": "Sales prices of market pulp fell in October, so the average price in Q4 is likely to be lower than in Q3."}, {"start": 869, "end": 877, "text": "However, demand for softwood pulp is expected to remain stable in Europe, North America, and China."}, {"start": 877, "end": 881, "text": "Demand is normalizing after a very slow Q3."}, {"start": 882, "end": 888, "text": "The claim settlement process regarding the explosion at the Kemi bioproduct mill will continue."}, {"start": 892, "end": 896, "text": "And we expect our Q4 operating result to be weak.<br /><br />"}, {"start": 896, "end": 908, "text": "Unfortunately, from Q3, the guidance does not take into account the insurance compensation included in the July-September operating result, nor possible insurance compensation for Q4."}, {"start": 911, "end": 916, "text": "To summarize, the paperboard market has picked up from last year's very low levels."}, {"start": 916, "end": 928, "text": "However, the strengthening of overall consumer product demand has been slower than expected, as consumers' purchasing power continues to be negatively impacted by the high cost of living."}, {"start": 929, "end": 932, "text": "Consumption has been focused more on services than on products."}, {"start": 933, "end": 944, "text": "The trend in variable costs has been mainly downward during this year, with the exception of wood costs, which increased by 7% from the comparison period."}, {"start": 945, "end": 947, "text": "Fixed costs have remained more stable."}, {"start": 948, "end": 954, "text": "Our strategy is to grow in fiber-based packaging materials and to renew our industrial operations."}, {"start": 955, "end": 967, "text": "We implement this strategy with investments that are improving our competitiveness, accelerating our target of being fully fossil-free in production, and developing future products to replace plastics."}, {"start": 968, "end": 974, "text": "We have renewed our dividend policy to better reflect our future investment and development needs."}, {"start": 974, "end": 987, "text": "At the same time, dividends remain an essential part of our capital allocation, and we aim to continue to distribute dividends of at least half the result for the financial year over time."}, {"start": 988, "end": 993, "text": "And with that, we end our presentation and are now ready for your questions.<br /><br />"}, {"start": 993, "end": 995, "text": "Thank you very much for your attention.<br /><br />"}]}, {"speakerId": "S3", "sentences": [{"start": 998, "end": 1005, "text": "If you wish to ask a question, please dial Pound Key five on your telephone keypad to enter the queue."}, {"start": 1005, "end": 1012, "text": "If you wish to withdraw your question, please dial Pound Key six on your telephone keypad."}, {"start": 1017, "end": 1021, "text": "The next question comes from Robin Santagata from Carnegie."}, {"start": 1022, "end": 1023, "text": "Please go ahead."}]}, {"speakerId": "S4", "sentences": [{"start": 1026, "end": 1027, "text": "Yes."}, {"start": 1027, "end": 1031, "text": "Good afternoon, and thank you for taking my questions."}, {"start": 1031, "end": 1035, "text": "First of all, I have a question relating to the pricing of paperboard."}, {"start": 1035, "end": 1052, "text": "In Q3, when I analyze your numbers, I find a scenario where you experienced mid-single digit sales price declines on average in Q3 compared to Q2 in your paperboard business."}, {"start": 1052, "end": 1054, "text": "First of all, is that correct?"}, {"start": 1054, "end": 1064, "text": "And secondly, what is the reason why have prices declined in paperboards?"}, {"start": 1064, "end": 1066, "text": "And what is the outlook for Q4?"}]}, {"speakerId": "S1", "sentences": [{"start": 1067, "end": 1068, "text": "Yes."}, {"start": 1068, "end": 1074, "text": "The prices have not declined; the differences are coming from the mix."}, {"start": 1074, "end": 1075, "text": "Pretty much."}, {"start": 1075, "end": 1078, "text": "So, that is not the truth and is concerning."}, {"start": 1078, "end": 1083, "text": "Thank you for our estimation; prices are expected to remain stable."}]}, {"speakerId": "S4", "sentences": [{"start": 1085, "end": 1085, "text": "Right."}, {"start": 1085, "end": 1089, "text": "So, we can compare the mix in Q3 to that in Q2."}, {"start": 1089, "end": 1093, "text": "What should we expect going into Q4 in terms of mix?"}, {"start": 1093, "end": 1098, "text": "Is it similar to Q3, or is it better or worse?"}]}, {"speakerId": "S1", "sentences": [{"start": 1099, "end": 1100, "text": "Similar to Q3."}, {"start": 1100, "end": 1100, "text": "Pretty much."}]}, {"speakerId": "S4", "sentences": [{"start": 1102, "end": 1103, "text": "All right."}, {"start": 1104, "end": 1108, "text": "Um, the second question I have is related to capacity utilization."}, {"start": 1109, "end": 1112, "text": "Um, you have expanded capacity in Horsham."}, {"start": 1112, "end": 1116, "text": "You have expanded capacity in Kemi as well."}, {"start": 1116, "end": 1120, "text": "In Paperboards, deliveries are still at market levels."}, {"start": 1120, "end": 1123, "text": "Demand is quite soft."}, {"start": 1123, "end": 1133, "text": "What is the current capacity utilization in Paperboards, and how do you plan to manage it in Q4 and into the winter?"}, {"start": 1133, "end": 1139, "text": "EBITDA in the paperboard business is coming quite close to break even."}, {"start": 1140, "end": 1151, "text": "Do you plan to curtail production due to market reasons, or what is the outlook in terms of production?"}]}, {"speakerId": "S5", "sentences": [{"start": 1151, "end": 1151, "text": "Okay."}]}, {"speakerId": "S1", "sentences": [{"start": 1151, "end": 1167, "text": "The capacity utilization rate at the mills you mentioned, including Husum board mill number one, the subsequent export line, and the Kemi mill, are running at full capacity because they are in the ramp-up phase."}, {"start": 1167, "end": 1175, "text": "Of course, they are not having full capacity yet, but as far as the operating rate is concerned, they are running pretty full."}, {"start": 1175, "end": 1179, "text": "But then, at the other mills, the situation is worse."}, {"start": 1180, "end": 1191, "text": "During the first quarter, we were very close to full capacity utilization, as you may remember, but then in Q2 and Q3, the order inflow weakened."}, {"start": 1191, "end": 1197, "text": "And for that reason, we have already taken downtime to curtail production."}, {"start": 1198, "end": 1205, "text": "And we will do so also during Q4 if the order inflow remains weak."}, {"start": 1205, "end": 1212, "text": "So we take downtime, and it's also possible that we have temporary layoffs."}, {"start": 1212, "end": 1216, "text": "We have negotiated this."}, {"start": 1216, "end": 1223, "text": "So it's possible to have these layoffs still during Q4."}, {"start": 1223, "end": 1226, "text": "But that is pretty much the situation."}, {"start": 1226, "end": 1230, "text": "So, I understand."}, {"start": 1230, "end": 1232, "text": "Yes, they are speeding up."}, {"start": 1232, "end": 1235, "text": "And then, the other mills are production lines."}, {"start": 1235, "end": 1237, "text": "They are taking downtime."}]}, {"speakerId": "S6", "sentences": [{"start": 1238, "end": 1238, "text": "Yep."}, {"start": 1238, "end": 1239, "text": "Yeah."}]}, {"speakerId": "S4", "sentences": [{"start": 1240, "end": 1245, "text": "And if I may, the last question is related to a recurring issue with paperboards."}, {"start": 1245, "end": 1262, "text": "I read that one of your continental European competitors, the largest one, said last quarter that there's essentially a price war when it comes to consumer boards in Europe at the moment."}, {"start": 1262, "end": 1271, "text": "And essentially, someone needs to shut down production in order to align with the current demand situation to get prices up."}, {"start": 1271, "end": 1287, "text": "Would you subscribe to that kind of comment that there is a bit of a price war happening in virgin fibre consumer boards, or is that something you don't see or believe?"}, {"start": 1287, "end": 1291, "text": "You believe it's simply a soft market?"}]}, {"speakerId": "S1", "sentences": [{"start": 1291, "end": 1292, "text": "Yeah, I wouldn’t say so."}, {"start": 1292, "end": 1296, "text": "At least we are not at war with anybody."}, {"start": 1296, "end": 1306, "text": "We said that our prices will be stable during Q3, and the same statement applies for Q4."}, {"start": 1306, "end": 1310, "text": "So I don't really emphasize that statement."}]}, {"speakerId": "S4", "sentences": [{"start": 1312, "end": 1312, "text": "I understand."}, {"start": 1312, "end": 1313, "text": "Thank you very much, Mika."}, {"start": 1313, "end": 1314, "text": "Thanks."}]}, {"speakerId": "S3", "sentences": [{"start": 1318, "end": 1322, "text": "The next question comes from Andrew Jones from UBS.<br /><br />"}, {"start": 1323, "end": 1324, "text": "Please go ahead."}]}, {"speakerId": "S7", "sentences": [{"start": 1327, "end": 1328, "text": "Hi, gents."}, {"start": 1328, "end": 1334, "text": "Uh, a bit of a follow up to the last question about what's needed to actually stabilize the market."}, {"start": 1334, "end": 1338, "text": "I mean, this situation clearly isn't sustainable.<br /><br />"}, {"start": 1338, "end": 1342, "text": "We thought we were on a bit of a recovery track earlier in the year."}, {"start": 1342, "end": 1345, "text": "Now we're sort of seeing that go the other way."}, {"start": 1346, "end": 1365, "text": "Clearly, capacity needs to come out in this market given how low operating rates are, and looking at the VC cost curve, it appears that you generally have a number of assets close to the top end of the mill, including Tako and Cairo as well."}, {"start": 1365, "end": 1368, "text": "They're all above the 80th percentile according to that."}, {"start": 1368, "end": 1372, "text": "Now, first of all, do you think that's accurate?"}, {"start": 1372, "end": 1383, "text": "And secondly, if a large player like yourselves doesn’t remove significant capacity, how can you expect others to do the same?"}, {"start": 1383, "end": 1386, "text": "I mean, clearly something has to change."}, {"start": 1386, "end": 1387, "text": "I mean, are you cognizant of that?"}, {"start": 1387, "end": 1392, "text": "And do you think that you would have to be the player to take that action?"}]}, {"speakerId": "S1", "sentences": [{"start": 1394, "end": 1394, "text": "Yeah, you're right."}, {"start": 1394, "end": 1398, "text": "We have indeed curtailed production capacity."}, {"start": 1398, "end": 1421, "text": "And if the situation continues as it is today or was during Q3, we will continue on this path. This does not necessarily mean who's who, but rather, other mills in Finland. At the moment, of course, we do not have any plans to close down any production lines."}, {"start": 1421, "end": 1428, "text": "We take these temporary layoffs knowing that the market situation is not normal."}, {"start": 1428, "end": 1436, "text": "The purchasing power of consumers is still weak or uncertain."}, {"start": 1436, "end": 1444, "text": "People are not spending as much money on products as they used to."}, {"start": 1444, "end": 1447, "text": "They are using it for services and so on."}, {"start": 1447, "end": 1452, "text": "That will likely change when purchasing power improves."}, {"start": 1452, "end": 1453, "text": "It remains to be seen."}, {"start": 1454, "end": 1464, "text": "Then, of course, the Chinese are still quite actively involved, for example, in Turkey and the Middle East, and markets of that nature."}, {"start": 1464, "end": 1468, "text": "And when, when the situation in China improves."}, {"start": 1468, "end": 1473, "text": "I mean, the purchasing power of the Chinese people is getting better."}, {"start": 1473, "end": 1483, "text": "And the economy is getting better in China; that problem will probably change the situation, but at the moment, we don't have any plans."}, {"start": 1483, "end": 1487, "text": "To close any capacity."}]}, {"speakerId": "S7", "sentences": [{"start": 1489, "end": 1489, "text": "Okay."}, {"start": 1489, "end": 1492, "text": "I mean, I'm just observing those trends that you've talked about."}, {"start": 1492, "end": 1502, "text": "I mean, clearly we could do with improvement in consumer demand, but the structural issues of higher wood costs, I don't think are going away."}, {"start": 1502, "end": 1513, "text": "I think also, you know, looking for an improvement in China might be optimistic, given that we might have a Trump presidency coming down the road to impose tariffs on the country."}, {"start": 1513, "end": 1518, "text": "I mean, those large Chinese mills are still ramping."}, {"start": 1518, "end": 1522, "text": "And, you know, we should be seeing more capacity going into next year."}, {"start": 1522, "end": 1524, "text": "It doesn't feel like any of this is changing."}, {"start": 1524, "end": 1528, "text": "So, I mean, someone's got to close something."}, {"start": 1528, "end": 1534, "text": "And again, you know, you've got a number of mills there and taking out some fixed costs."}, {"start": 1534, "end": 1545, "text": "I would imagine that, you know, probably improves your margins and I guess would also help the shape of the industry."}, {"start": 1545, "end": 1547, "text": "But, um, I don't know."}, {"start": 1547, "end": 1554, "text": "I think, yeah, I guess there's no question, but I think it's food for thought, at least."}, {"start": 1554, "end": 1575, "text": "Just one follow-up on the financials for Q3, could you talk us through the moving parts in terms of the delta for the FX move, the additional maintenance, and other factors? You mentioned there was no real mix effect, but could you provide some numbers around these factors?"}]}, {"speakerId": "S1", "sentences": [{"start": 1575, "end": 1576, "text": "Okay, Henry."}, {"start": 1576, "end": 1576, "text": "We'll take this."}]}, {"speakerId": "S2", "sentences": [{"start": 1577, "end": 1577, "text": "Yeah."}, {"start": 1577, "end": 1578, "text": "So."}, {"start": 1579, "end": 1589, "text": "So what we commented on the paperboard delivery volumes is that they are expected to decrease slightly on a seasonal basis compared to the last quarter."}, {"start": 1590, "end": 1595, "text": "And as Micah already referred to, the prices are expected to remain stable."}, {"start": 1596, "end": 1604, "text": "Costs are expected to increase somewhat, mainly due to wood and fixed costs."}, {"start": 1604, "end": 1605, "text": "Increase."}, {"start": 1606, "end": 1610, "text": "There are annual maintenance shutdowns at the mills."}, {"start": 1610, "end": 1613, "text": "Are less than in the previous quarter."}, {"start": 1614, "end": 1616, "text": "And then, of course, the market pulp situation."}, {"start": 1616, "end": 1622, "text": "Market pulp situation: Sales prices dropped in October."}, {"start": 1622, "end": 1627, "text": "And we expect that the demand will stay stable in Europe and North America."}, {"start": 1627, "end": 1636, "text": "But then in China, the kind of low demand level has started to normalize at the end of Q3."}, {"start": 1637, "end": 1638, "text": "So that remains to be seen.<br /><br />"}, {"start": 1638, "end": 1641, "text": "But I think those are the main elements."}, {"start": 1641, "end": 1645, "text": "Uh, the effects I forgot to mention will be slightly negative."}]}, {"speakerId": "S4", "sentences": [{"start": 1650, "end": 1650, "text": "Okay, Henry.<br /><br />"}, {"start": 1650, "end": 1650, "text": "Thank you."}]}, {"speakerId": "S3", "sentences": [{"start": 1656, "end": 1663, "text": "As a reminder, if you wish to ask a question, please dial Pound Key five on your telephone keypad."}, {"start": 1671, "end": 1671, "text": "Okay."}, {"start": 1683, "end": 1687, "text": "The next question comes from Andrew Jones from UBS."}, {"start": 1687, "end": 1689, "text": "Please go ahead."}]}, {"speakerId": "S7", "sentences": [{"start": 1693, "end": 1698, "text": "Yeah, I'll have one if no one else is asking about the CapEx for next year."}, {"start": 1698, "end": 1707, "text": "Any changes to your plans in light of declining profitability; could we see a lower CapEx spend in 2025?"}]}, {"speakerId": "S2", "sentences": [{"start": 1708, "end": 1715, "text": "Well, we are always very critical in all our CapEx decisions."}, {"start": 1716, "end": 1720, "text": "So, obviously, there are no material changes."}, {"start": 1720, "end": 1732, "text": "We have certain plans in place that we are looking at, but obviously, we have no sort of major projects decided at this stage."}, {"start": 1732, "end": 1739, "text": "And of course, next year, the CapEx level could stay the same unless there are new decisions.<br /><br />"}, {"start": 1739, "end": 1743, "text": "Looks like it could stay lower than this year anyhow."}, {"start": 1743, "end": 1748, "text": "But that of course remains subject to the new project decisions."}, {"start": 1749, "end": 1750, "text": "Yes."}]}, {"speakerId": "S8", "sentences": [{"start": 1752, "end": 1752, "text": "Okay."}, {"start": 1752, "end": 1753, "text": "Thank you."}]}, {"speakerId": "S3", "sentences": [{"start": 1757, "end": 1761, "text": "The next question comes from Robin Santagata from Carnegie."}, {"start": 1762, "end": 1763, "text": "Please go ahead."}]}, {"speakerId": "S4", "sentences": [{"start": 1767, "end": 1768, "text": "Yes, thanks."}, {"start": 1768, "end": 1770, "text": "It's Robin again."}, {"start": 1770, "end": 1778, "text": "Um, just a quick one related to the insurer and insurance repayment you received now in Q3."}, {"start": 1778, "end": 1781, "text": "Uh, do you mind clarifying that?"}, {"start": 1781, "end": 1786, "text": "How much was, you know, Metsä Board and how much was Metsä Fibre."}, {"start": 1786, "end": 1792, "text": "I'm mindful it might be in the report, but there's a large number of reports out today."}, {"start": 1792, "end": 1795, "text": "So that split would be helpful."}, {"start": 1795, "end": 1802, "text": "And then, what is the outlook for Q4 in terms of insurance payments?"}, {"start": 1802, "end": 1807, "text": "I do understand that you don't have the exact number, but what should we expect?"}, {"start": 1807, "end": 1812, "text": "More repayments are to be booked in Q4."}]}, {"speakerId": "S1", "sentences": [{"start": 1813, "end": 1813, "text": "Okay."}, {"start": 1813, "end": 1814, "text": "Henry will take this as well."}]}, {"speakerId": "S2", "sentences": [{"start": 1814, "end": 1815, "text": "Yeah."}, {"start": 1815, "end": 1815, "text": "Yeah."}, {"start": 1815, "end": 1816, "text": "Robin."}, {"start": 1816, "end": 1819, "text": "Uh, the split is about 50-50."}, {"start": 1819, "end": 1822, "text": "You can assume the split is between Metsä Board and Metsä Fibre."}, {"start": 1822, "end": 1831, "text": "And unfortunately, we cannot indicate anything relating to the timing of the remaining claims."}, {"start": 1831, "end": 1841, "text": "What we can say is that while we remember that the damages totaled about €40 million, we have now received €23 million."}, {"start": 1841, "end": 1844, "text": "So you will get a rough idea of what we are talking about."}, {"start": 1844, "end": 1851, "text": "Also remembering that we have a certain own risk period from the total damages."}, {"start": 1851, "end": 1856, "text": "So it's fair to assume that more than half has now already been received."}, {"start": 1856, "end": 1860, "text": "But what comes to the remaining part and the timing of that?"}, {"start": 1860, "end": 1865, "text": "Unfortunately, we don't have that information and don't want to really speculate on the timing."}]}, {"speakerId": "S4", "sentences": [{"start": 1867, "end": 1868, "text": "All right.<br /><br />"}, {"start": 1868, "end": 1885, "text": "Could you comment on next year's two-month production curtailment when you replace the damaged part? I assume that will also be covered by insurance."}, {"start": 1885, "end": 1892, "text": "Is it then expected that we should anticipate the payment next year, I would assume."}]}, {"speakerId": "S2", "sentences": [{"start": 1892, "end": 1892, "text": "Yes."}, {"start": 1892, "end": 1899, "text": "Our understanding is that that period will also be covered by the business interruption insurance."}, {"start": 1899, "end": 1909, "text": "Obviously, then, the damages will remain to be seen at that time, which we cannot anticipate."}, {"start": 1909, "end": 1912, "text": "But our expectation is that the insurance will cover that period as well."}]}, {"speakerId": "S4", "sentences": [{"start": 1914, "end": 1915, "text": "All right."}, {"start": 1915, "end": 1915, "text": "Thanks."}, {"start": 1915, "end": 1925, "text": "And if I may, a final one, perhaps a bit of a tricky one, related to pulp demand and pricing."}, {"start": 1925, "end": 1930, "text": "What is it that you see now in China and Europe?"}, {"start": 1930, "end": 1936, "text": "Could we see prices starting to increase already in softwood pulp in China?"}, {"start": 1936, "end": 1940, "text": "And, um, what do you experience in Europe?"}, {"start": 1940, "end": 1945, "text": "Is it still price pressure that you see here?"}]}, {"speakerId": "S5", "sentences": [{"start": 1946, "end": 1947, "text": "Yes."}]}, {"speakerId": "S1", "sentences": [{"start": 1947, "end": 1948, "text": "Probably."}, {"start": 1948, "end": 1952, "text": "We have seen the bottom in China."}, {"start": 1952, "end": 1954, "text": "We haven't seen any clear increase."}, {"start": 1954, "end": 1958, "text": "But I mean they are not declining."}, {"start": 1958, "end": 1962, "text": "And in Europe, they still have a decline, as you probably know."}, {"start": 1962, "end": 1983, "text": "And let's see then the price difference of our pulp, or our type of pulp comparing China and Europe; there is still a difference and that might create some pressure on European prices, remains to be seen."}, {"start": 1983, "end": 1987, "text": "But in China, they are not declining anymore."}]}, {"speakerId": "S4", "sentences": [{"start": 1990, "end": 1991, "text": "Amica."}, {"start": 1991, "end": 2009, "text": "Can I ask, if you compare your software power platform, which as a whole is quite efficient—I mean, you have a few very efficient pulp mills and Metsä Fibre has others that are competitive on a global scale in softwood pulp?"}, {"start": 2009, "end": 2018, "text": "Are there places in the world where they produce clearly lower-cost softwood pulp?"}, {"start": 2018, "end": 2019, "text": "However, that then remains to be seen."}]}, {"speakerId": "S5", "sentences": [{"start": 2019, "end": 2020, "text": "Be it."}]}, {"speakerId": "S1", "sentences": [{"start": 2020, "end": 2027, "text": "As far as efficiency is concerned, Hanakowski and Gami are the best ones."}]}, {"speakerId": "S9", "sentences": [{"start": 2028, "end": 2029, "text": "But also when."}]}, {"speakerId": "S4", "sentences": [{"start": 2029, "end": 2031, "text": "It comes to wood raw material cost."}]}, {"speakerId": "S5", "sentences": [{"start": 2031, "end": 2032, "text": "Okay, that's another story, of course."}]}, {"speakerId": "S1", "sentences": [{"start": 2032, "end": 2033, "text": "That's another story, of course."}, {"start": 2035, "end": 2041, "text": "Then you need to check what the pulp wood price is in other areas."}, {"start": 2041, "end": 2051, "text": "But as far as the production efficiency is concerned, no doubt these two mills are really top for sure."}]}, {"speakerId": "S4", "sentences": [{"start": 2051, "end": 2052, "text": "I understand, thank you."}]}, {"speakerId": "S5", "sentences": [{"start": 2052, "end": 2052, "text": "Thank you."}]}, {"speakerId": "S3", "sentences": [{"start": 2055, "end": 2061, "text": "There are no more questions at this time, so I hand the conference back to the speakers for any closing comments."}]}, {"speakerId": "S5", "sentences": [{"start": 2062, "end": 2062, "text": "Okay."}]}, {"speakerId": "S1", "sentences": [{"start": 2062, "end": 2068, "text": "Thank you everybody for active participation, and I wish you a good continuation of the day.<br /><br />"}, {"start": 2068, "end": 2069, "text": "Thank you."}]}], "speakers": [{"speakerId": "S1", "name": "Michael Joutseno"}, {"speakerId": "S2", "name": "Henry Cederholm"}, {"speakerId": "S3", "name": "Operator"}, {"speakerId": "S4", "name": "Robin Santagata"}, {"speakerId": "S5", "name": "Unknown 1"}, {"speakerId": "S6", "name": "Unknown 2"}, {"speakerId": "S7", "name": "Andrew Jones"}, {"speakerId": "S8", "name": "Unknown 3"}, {"speakerId": "S9", "name": "Unknown 4"}], "id": "671a44db1bd8613ce80382cf", "createdAt": "2024-10-24T13:00:11.104Z", "updatedAt": "2024-10-24T13:00:11.104Z", "langCode": "en", "transcriptType": "ENHANCED", "amberscriptJobId": null, "speechmaticsJobId": "3pqm3elvx1", "eventId": "66bdb00dbd875b038e306450"}