UPMMY - UPM-Kymmene Oyj

Massimo Reynaudo: Hello, everyone. Welcome to UPM's Quarter 4 Results Webcast. I am Massimo Reynaudo, I'm the CEO of UPM. Here with me is Tapio Korpeinen, the CFO of UPM. The year 2025 has been characterized by escalating geopolitical and trade tensions with multiple impacts and also on our business environment. During the year and in response to the situation, we intensified our actions to both sharpen our competitiveness and to execute our portfolio strategy. This resulted in the fourth quarter in a visible improvement of our performance in most of our businesses. Compared to the previous quarter, our cash flow resulted very strong, too. Our quarter 4 EBIT was EUR 355 million compared to EUR 418 million 1 year ago or 1 year earlier. The quarter 4 EBIT margin was nearly unchanged at 15.3% versus 15.9% in the previous year. The operating cash flow in quarter 4, as I said, was strong at EUR 720 million. And our net debt decreased while we also paid out the second installment of the dividends. During 2025, we launched a significant strategic initiatives that continue to transform the company. In February, we acquired Metamark to accelerate the growth in Adhesive Materials. In May, we sharpened the focus in our Biofuel business and discontinued the Rotterdam biorefinery development. When it comes to biofuels, during the year, we made good progress with our turnaround plan and the business go back to profitability in the second part of the year. In September, we started the strategic review of our Plywood business. And in December, we announced the plan to establish a graphic paper joint venture that would encompass the UPM Communication Paper business and Sappi graphic and paper operations in Europe. While doing all of this, we took decisive actions to improve performance and competitiveness across all our businesses. Just as an example, in the fiber business, we mitigated the pulp and wood market challenges in Finland with production curtailments in the fall. And we entered into a long-term strategic partnership with Versowood that strengthened our position in the wood market. I'll tell you some more about this later. In the Adhesive Materials business, we restructured our production footprint globally and we reduced capacity in Europe and in the Communication Papers business. Measures were taken also in all other businesses and functions. Finally, we intensified our actions to improve the working capital efficiency, which resulted in the cash flow I talked about earlier. I will go now into some more detail for each of the business segments. Let's start with the Decarbonization Solutions. Here, the various end markets developed positively during the 2025. In Energy, the electricity demand in Finland grew by 3% during the year -- during the 2025. The growth was driven particularly by the electrification of [ heating ]. But in the coming years, this growth is expected to be complemented by growth in data centers currently under construction and by the green transition. Over the 5 coming years, we see the annual market growth rate to accelerate in a range between 4% and 7% in line with several other predictions on the same matter. We are in a strong position to capture the value this situation creates. In fact, there is a strong demand for 3 things. Sites with easy access to high voltage grid connections were to establish new operations. There is a demand for CO2-free energy -- electricity and there is demand for baseload power, and we have the 3 of them. In the meantime, we are well set to maximize the value creation in the current volatile and weather-dependent market. For example, in 2025, we achieved EUR 10 per megawatt hour higher sales prices compared to the average market prices. In quarter 4, the Energy business achieved a comparable EBIT of EUR 54 million, marking the best quarter in 2025. But if we move to biofuels, there as well, market prices for advanced renewable fuels increased during the second part of 2025. Our business improved its performance each quarter throughout the year and is back in profit. Going forward, the implementation of the RED III regulation, renewable energy directive regulation will support a positive market outlook. In Biochemicals, the business has now initiated the commercial phase with the first customer deliveries of industrial sugars taking place in quarter 4. We will continue to introduce further products to the market during the first half of this year, the next step being the renewable functional fillers. We reconfirm that the demand and interest for our biochemical products is robust. You may also have seen from the release this morning that we plan to start reporting UPM next-generation renewables, which consists of Biofuels and Biochemicals as a separate reporting segment starting from January 2027. With this, there will be the opportunity to have enhanced visibility into the performance as well as the potential of this high-growth segment. We turn the page and look now into the Advanced Materials. Well, here, the label materials market development in 2025 was relatively stable with growth rates remaining modest. To put it in numbers, in Europe, the demand grew by 2% compared to 2024. In North America, the growth was on a similar, which means about 2% level in the first 3 quarters of the year, but it slowed down and ended up with a minus 1% in quarter 4. In this context, 2025 has been quite a transformational year for our Adhesive Materials business. Here, we took significant actions to sharpen competitiveness and to secure the future growth. The business streamlined its organization and closed 3 production lines in Germany, France and in the U.S., relocating production to lower cost sites in Europe and in the U.S. This will improve its fixed and variable costs and competitiveness in general going forward. In parallel, it started focused growth investments in the U.S., in Malaysia, in Vietnam and in India to accelerate the growth in high potential or high-margin areas. Finally, it acquired Metamark in the U.K. and then work to integrate it with the previously acquired sites in the graphics space to build a platform for the development of this higher-margin segment. As a result of all of this, the business was able to grow clearly faster than the market, and it is in a good position entering 2026. However, the slow growth environment due to that, we were not able to simultaneously improve margins. Significant part of the profitability improvement actions and the benefits from the acquisitions is still to materialize and will be more visible in 2026. The Specialty Materials business delivered robust results in terms of profits and margin despite all the market turbulences. Gradually, the demand for label, release and packaging materials normalized in quarter 4. This, combined with our efficiency measures and declining variable costs resulted in a good quarter 4 EBIT improvement, up EUR 20 million year-on-year.The Specialty Materials business entered 2026 in a good position to supply a growing market demand and with low investment needs. Moving ahead to Fibers. Fibers experienced a volatile 2025, impacted by trade uncertainties, currency fluctuations and low prices. However, to put things in the right perspective, if we look at the whole year 2025 and despite the fluctuations, the pulp demand was robust. Global shipments continue to grow at a healthy rate at around 3%. Hardwood pulp shipments grew significantly more than that, whereas softwood pulp shipments decreased moderately. Fibers South, our platform in Uruguay continued to strengthen its position as a world-class low-cost business platform. Our cost during 2025 decreased by about USD 25 per ton, in line with our plans and what we communicated earlier. And the cost decrease is expected to continue still into this year and into the next year as optimizations continue. To give you some examples of these optimizations, our plantations are increasingly reaching harvesting maturity that improved wood sourcing costs. Besides that or linked to that, we will improve our inbound logistics costs further. On top of this all, we're working to identify debottlenecking opportunities both in Paso de los Toros and Fray Bentos. Or in general, during the second part of 2025, the hardwood pulp market prices in China increased gradually, but they are -- but significantly from the very low levels that they touched during quarter 2. The Fibers South performance in quarter 4 reached an EBIT of EUR 78 million or 21% of sales, an improvement versus quarter 3 despite the maintenance shut in Fray Bentos in quarter 4. On the other hand, when we talk about Fibers North or our platform in Finland, it continued to experience low softwood pulp prices and high wood cost. Its EBIT remained at EUR 11 million negative in quarter 4, albeit EBITDA positive. On the positive side, the pulpwood market prices in Finland have decreased significantly and roughly 30% from the peak and at the end of the year. But due to the length of the supply chain, the benefits of this cost reduction come typically and progressively with a delay, and therefore, they will be visible in 2026. Another relevant fact is here that we have entered a strategic partnership with Versowood, the largest private sawmill in Finland, and that will help to structurally improve our position in the Finnish wood market. Before we move ahead, I just want to recall your attention to the fact that the UPM Forest business will be included in the Fibers North business from January 2026 onward. We will then start to provide additional financial information on the 2 parts of the UPM Fibers reporting segment, meaning Fibers South and Fibers North starting from quarter 1, 2026. Now when it comes to Communication Papers and Plywood, both had a solid end of the year in terms of EBIT performance. The graphic paper markets were challenging in 2025, impacted by tariffs and the related uncertainty. The European graphic paper demand decreased by 8%, although the decrease moderated slightly in quarter 4 at 5%. The North American demand development was weaker and demand decline increased slightly in quarter 4. In markets that are oversupplied, we closed production at the Kaukas and Ettringen paper mills in quarter 4 reducing our capacity by 13% and our fixed cost by EUR 70 million annually. In quarter 4, we also sold the earlier closed Plattling paper mill in Germany. Communication Papers quarter 4 performance has been relatively strong with EBIT totaling EUR 110 million and boosted by the annual energy refunds. Once again, the business generated a very strong free cash flow that was up to EUR 362 million in 2025, despite the challenging market conditions I've just described. When it comes to Plywood, the dynamics were different in the different markets it serves. In the LNG shipping segment, demand continued to be strong. In the industrial end segments, it continued to improve. And in the Construction segment, it was stable, albeit on a relatively low level. In this environment, Plywood reported a robust quarter 4 EBIT of EUR 16 million or 15% of sales, which made quarter 4 the best quarter of the year. When talking about plywood, as you may remember, we announced the strategic review of the UPM Plywood business in September. We see plywood as a very good business with strong positions in the mid- to high-end market segments in Europe and globally in the LNG segment. The business has strong customer partnerships, operational and commercial excellence and a diversified portfolio of distinctive products. It has shown over time that it is able to provide good profitability and cash flow in different economic cycles. On the other hand, despite it has the scale of a midsized company in Finland, so relevant per se, absolutely relevant per se, it is the smallest of the UPM businesses. With this strategic review, we want to assess whether acting as a separate entity or as a part of a different entity, it could create even further value. The strategic review contemplates different possible future outcomes, including maintaining the status quo, a divestment, a partial demerger or an initial public offering. At this point in time, all options are in play and the review is expected to be concluded by the end of 2026. We closed 2025 with an announcement in December, an announcement about the fact we signed a letter of intent with Sappi that shall lead to the creation of a joint venture in the graphic paper market. As a reminder, we are planning an independent graphic paper company owned 50% for each of the 2 parts, UPM and Sappi, 50-50, which would include what is within the perimeter of the UPM Communication Papers business in Europe and in the U.S. and Sappi's graphic paper business in Europe. The transaction would create a more efficient, adaptable and sustainable graphic paper business. It will also create structurally competitive cost base and ensure supply security for the European and global customers. For UPM, the transaction would have a positive impact on profit margins, balance sheet and leverage. The numbers are here -- the key numbers are here represented in this slide. With the successful execution of this initiative, UPM would no longer have direct sales exposure to the declining European and North American graphic paper markets. The definitive agreement is expected to be signed during H1 during this first part of 2026, and the closing of the deal is expected to take place by the end of 2026. So by closing with this part, with this portfolio initiatives, the ones that I mentioned now about Plywood and Communication Papers, but also the other activities and investment, Decarbonization Solutions, Advanced Materials and then the Fiber business, we aim to change the profile of the company, increasing its focus on growth and improved margins and leverage. The future UPM would have an attractive portfolio made by Decarbonization Solutions, Advanced Materials and Renewable Fibers. In fact, all these businesses operate in growing markets and UPM has shown a strong track record of realized growth already above GDP in the past years in this perimeter. Focused innovation and investments targeted to combine sustainable renewable feedstock and CO2-free energy into high-margin products for customers all around the world will be the catalyst for an accelerated profitable growth ahead. But I'll pause here, and I'll hand it over to Tapio for some further analysis on our quarter 4 results.
Tapio Korpeinen: All right. Thank you, Massimo. So here, you can see our EBIT and cash flow by the quarter for last year and '24. And from this, you can see that our fourth quarter EBIT increased significantly from the previous quarter, third quarter in '25, but decreased 15% from the last quarter of the previous year. And as Massimo already mentioned, the EBIT margin as such for the fourth quarter was at the same level as it was 1 year ago. Most of our businesses improved their performance from the previous quarter. As we have guided earlier, we booked the annual energy refunds in Communication Papers in the fourth quarter. And then also in the fourth quarter, we booked the increase in the fair value of our Forest in Finland, which was EUR 72 million. We had the same items benefiting the fourth quarter result in '24 as well. Only this year this year in the fourth quarter, they were slightly smaller. Operating cash flow was very strong in the fourth quarter, totaling EUR 720 million. This includes a working capital release of EUR 460 million for the quarter. Part of that release is seasonal by nature, which you can sort of see if you look at the previous years, but a large share is structural, thanks to our intensified efforts and measures that we have taken during the year to improve working capital efficiency permanently. Net debt then continued to decrease from the previous quarter. Net debt to EBITDA was 2.29x at the end of the year. And we will continue our efforts to increase cash flow and strengthen the balance sheet during this year. And here on the left-hand side, you can see our fourth quarter EBIT as it developed compared with the fourth quarter last year. Sales prices continue to be the biggest negative driver impacting particularly Fibers, but also Communication Papers and Specialty Materials. Variable costs decreased significantly year-on-year as well, but their positive impact was still smaller at the UPM level than the negative impact from lower sales prices. Perhaps worth mentioning is that for the yearly comparison in Finland, wood cost still was on the increase, so year-on-year, still increasing. Delivery volumes were slightly lower and fixed cost broadly stable in the fourth quarter. Changes in the exchange rates had a EUR 20 million negative impact on the fourth quarter EBIT as compared to last year's fourth quarter after hedging results. On the right-hand side, you can see the sequential comparison to the third quarter of '25. Sales prices decreased also in this comparison, but variable cost decreased then more. In this slide, this bar showing the lower variable cost includes also the benefit of energy refunds in the Communication Papers that were booked in the fourth quarter. However, if you exclude them, variable costs in other areas -- in other inputs decreased more than sales prices. Delivery volumes were broadly stable, while fixed costs were up seasonally. In this quarter, by the way, we had also the maintenance shutdown in Fray Bentos, which went according to plan and somewhat lower cost than what we had guided earlier, about EUR 22 million impact on the quarter. Then the other bar on the right-hand side, that includes the fair value increase of Forest assets, which was EUR 75 million higher in the comparison to the third quarter. This page summarizes UPM's currency exposures. As many of you know, most important currency in terms of our exposure is the U.S. dollar. We look at the impact on the 2025 result as compared to the previous year. Changes in currencies reduced UPM's comparable EBIT by about EUR 50 million after the impact of hedges. And here is the outlook for the first half of 2026. We expect our comparable EBIT in the first half of the year to be approximately in the range of EUR 325 million to EUR 525 million. In the first half of 2025, by comparison, our EBIT totaled EUR 413 million and the second half EBIT in '25 was EUR 508 million. In the first half of this year, '26 compared to the second half of '25, UPM's performance is expected to benefit from moderately higher sales prices and delivery volumes and moderately lower fixed costs. Performance is expected to be held back by continued weak Communication Papers markets and also by increased costs during the early phase of the production ramp-up at the UPM Leuna refinery. Currencies started the year at similar levels compared to the second half of 2025. In the second half of 2025, comparable EBIT benefited from the timing of energy refunds and increased fair value of Forest assets. So as I mentioned earlier, those were booked during the second half of last year, and these items are not expected to take place during the first half of 2026 in similar quantities. Then looking year-on-year in the first half '26 compared to first half '25, UPM's performance is expected to benefit from lower variable costs and moderately higher delivery volumes. Maintenance activity is expected to be lower than in the comparison period. Performance is expected to be held back by continued weak Communication Paper markets and also the increased costs during the production ramp-up of UPM Leuna biochemicals refinery. In the beginning of the year, currencies are negative in terms of their impact on comparable EBIT when comparing to the first half of 2025. Then the fourth quarter now was the second quarter that we were able to decrease net debt and that while we also paid out the second dividend installment during the fourth quarter -- second dividend installment for the 2024 dividend. And as I said, we aim to lower our leverage and bring the net debt to EBITDA back to below 2x in a timely manner. Our CapEx estimate for this year is EUR 300 million. the cycle of large investments in Paso de los Toros and Leuna is behind us and our maintenance investment needs are consistently below EUR 200 million per annum looking forward. And finally, the Board of Directors has today proposed an unchanged dividend of EUR 1.50 per share for the year 2025. The dividend represents 113% of UPM's comparable earnings per share for '25 and is equaling a dividend yield of about 6%. And now I'll hand it back over to Massimo for the summary and some final remarks.
Massimo Reynaudo: Thank you, Tapio, and this is just going to be a brief recap of the main aspects we have seen so far. So we ended a complex year 2025 with improving performance in most businesses, strong cash flow and decreasing net debt. 2025 has been a transformational year. Across all our businesses, we launched a number of important initiatives aimed to ensure competitiveness and continued performance in the short term, while preparing to change the company profile for continued success in the long run. The future UPM will have a portfolio of innovative and sustainable materials and solutions. It will be focused on growth, improved margins, robust balance sheet and disciplined capital allocation. All of this as a base to support solid returns. Our Board is confident on the UPM's ability to create value and has proposed an unchanged dividend of EUR 1.5 per share for the year 2025. And this ends the prepared part of our presentation. And I think with Tapio, we are ready to take your questions.
Operator: [Operator Instructions] The next question comes from Linus Larsson from SEB.
Linus Larsson: I'd like to start off, if I may, with Fibres South. You did give some comment, but if you could provide some additional comment on your EBITDA performance as it is right now and where we are in terms of cost per tonne. You said there is still some improvement ahead in 2026 and 2027, but how much, please?
Massimo Reynaudo: Yes. When it comes to the, let's say, the cost improvement potential, we have indicated earlier on, I believe it was in October, we estimate that potential across the next couple of years in the scale of EUR 15 per tonne. And that's -- yes, that's about that metric. Then when it comes to the EBITDA performance in quarter 4, I'll leave to Tapio to provide some more color.
Tapio Korpeinen: Well, let's say, we give the EBIT at this point, as said, we will give some further lines on the performance then when we start reporting during this year. But I would sort of remind you of the fact that we had the maintenance shutdown in Fray Bentos during the quarter. So that had that sort of EUR 22 million impact. And even with that, we had an EBIT of EUR 78 million or 21% of sales. So if you look at the EBITDA margin, which we will get some more transparency on then later on, that obviously is at a healthy level as it is. And as I said, then we will work on the cost side more.
Linus Larsson: Sure. And the cost improvement that you're seeing, is that a linear, gradual improvement over a 2-year period? Or is it more of a step change on an earlier time horizon?
Massimo Reynaudo: Well, as I've commented earlier on, this comes from improvement, for example, in maturity of the plantation, wood supply, wood cost, logistic improvement. So we are talking more of a gradual and progressive improvement, no big step change. Those have been realized, implemented and materialized already in 2025 or before.
Linus Larsson: Great. And then if I may shoot a second question, please, regarding energy in these volatile markets, if you could please update us on your hedging. How much of your volume in your Energy division is hedged in the first quarter and for the full year 2026, please?
Massimo Reynaudo: Well, look, I will leverage the fact that Tapio leads also the Energy business and he is the most knowledgeable person in this room to talk about energy and transfer the question to him.
Tapio Korpeinen: Yes. So well, like we have said before, we don't sort of disclose the hedging rate directly or percentage to our business. But maybe what I'll sort of rather point out to you is that if you look at our result, which is in Massimo's notes already that he told you, we achieved EUR 10 better average sales price during last year for the full year than what the average spot was. So that is coming from 2 sources. One, us being able to create value on the output that we can regulate primarily then, meaning hydro and then also from the hedging results. So we have been able to sort of create value on both ends. And let's say, coming into this year, we are looking to sort of perform in a similar manner. The sort of volatility in the market continues and the year has started with a real winter, which obviously you can see in the spot prices at the moment and in the fact that the hydro balance is dropping quite quickly now in the Nordic area. So in that sense, weather, obviously difficult to forecast any longer term, but the year has started in that manner.
Linus Larsson: Right. But are you then suggesting that the premium that you just mentioned, is that what you expect to achieve in the first quarter as well?
Tapio Korpeinen: That we will see.
Operator: The next question comes from Charlie Muir-Sands from BNP Paribas.
Charlie Muir-Sands: Just in terms of the evolution into the first half of 2026, I know you qualitatively called out a number of the moving parts. But just in terms of the -- a few of the discrete components, am I correct to read that your energy rebate was around EUR 100 million in the fourth quarter? Can you give us any indication on what losses you would expect from Leuna? Should we expect those to be even greater than they were in the second half of '25? And any kind of indication on the path to profitability of that operation? And I think you talked about fixed cost savings of about EUR 70 million from some of your communication paper closures. I just wanted to confirm, should we be thinking about that as a run rate immediately for Q1 versus Q4?
Tapio Korpeinen: Yes, if I'll take that. So in round figures, it was -- the rebate impact was similar to last year. And well, this EUR 100 million that you mentioned is in the sort of right ballpark. Then in terms of the impact of the Leuna refinery, if we now had EUR 49 million negative EBIT in the second half of last year, we still -- as the production is ramping up, kind of in advance of significant sales will have additional costs, so a headwind from the sort of operating cost side, plus then we will have also depreciation kicking in now during the first half of the year. So in that sense, there will be a kind of larger negative impact still during the first half compared to the second half of last year. I would say, for the whole year, this kind of additional headwind will be, let's say, in the scale of some ten millions -- tens of millions. And then maybe on the fixed cost comment, yes, we -- as announced then towards the end of the year, production stopped both at -- or had stopped both at Ettringen mill and Kaukas. So this EUR 70 million fixed cost as a run rate will then benefit us during the first half of the year in the Communication Papers.
Charlie Muir-Sands: If I could just ask a follow-up on Communication Papers. Regarding the joint venture, can you give us an update on the status with the major antitrust authorities? Have you filed with them yet? Have you received any feedback from them yet at all?
Massimo Reynaudo: Yes. All what we can say at this point in time is that we have engaged with them in a dialogue, in a constructive dialogue and work is ongoing on building the necessary, let's say, information and so on, but there is not more than this to share at this point in time.
Operator: The next question comes from Robin Santavirta from DNB Carnegie.
Robin Santavirta: First question I have is related to the H1 EBIT guidance you provide. Now we started the year with higher hardwood pulp prices compared to last year. And I guess you expect somewhat higher volumes in H1 and also lower input costs, plus we have quite significantly less mill maintenance cost in H1 this year versus last year. Still the midpoint of the guidance range is close to last year's outcome. What are the key negatives we should expect in H1?
Tapio Korpeinen: Well, if I comment, of course, one thing you have to remember that last year, we started with the U.S. exchange rate of 1.04. And obviously, that sort of exchange rate impact is mostly felt by -- in the Fibres business. So that obviously is a headwind in that sort of year-on-year comparison. Then we have, as pointed out in the forecast or in the outlook commentary Communication Papers where, let's say, despite our measures to cut and save on fixed cost, then reality is that we have a sort of a declining paper market to work in. We had also -- even if we have said earlier that the direct impact of tariffs has been still small in the sort of low tens of millions of euros for the full year last year. That, in a sense, impact we did not have in the beginning of the year last year. And then perhaps also as a significant sort of point that we just discussed a minute ago that we have the additional headwind even if we do see improvement on the biofuel side, we have additional headwind in the biochemicals. So those are the factors that are then included in the range that we have given.
Robin Santavirta: That is very clear. Second and last question I have is related to the wood cost in Finland. We have seen quite significant declines. I can also see from data that the Finnish forest industry's procurement of wood raw material has been very low since last summer, many months, almost 50% lower procurement of wood compared to historical averages. How should we now look when we go into the high season of wood procurement in spring? Is the expectation now that pulpwood and even log prices could start to come up towards or to higher levels in the spring and early summer? Or how do you sort of -- what do you bake in, in your assumptions related to Finnish wood cost? And also added to that, the Finnish pulp mills, your former Chairman expects a big pulp mill to close in Finland. You now generate EBIT losses, not EBITDA losses, but still EBIT losses. Are you looking at sort of even terminal closures of any of your pulp mills in Finland?
Massimo Reynaudo: Yes. Let me pick the second question. I'll leave the first one to Tapio. But well, when you assess the profitability of an asset, you don't do it on a base of a quarter. You do it on a long-term perspective. And if we look for a longer-term perspective, and our assets have been profit positive. Our assets in Finland have been profit positive. And they are well maintained. They are of a scale to grant sufficient competitiveness. And we are continuing to work to enhance that competitiveness, the deal with Versowood, what we are operating to in terms of internal improvement and so on. Last but not least, your first question was about declining wood cost. So first, a decision about closing an asset is not something you speculate about or you forecast for. And second, this is not part of our current considerations.
Tapio Korpeinen: Maybe if I comment on the, let's say, questions that you had on cost and harvest and so on. So obviously, why the harvest levels have been low in Finland is that like we have said already, a while ago, a good while ago that the wood prices in Finland have been on unsustainable levels. So that's why wood has not been purchased. That's why also we have seen some moderation on the wood market prices in Finland. Having said that, good to remember that the wood prices more or less doubled in Finland. So if they have come down by 30%, it doesn't mean that they are low. And I would expect that, that will also, in a sense, be something that kind of will calibrate any sort of kind of market dynamics then going forward as well.
Operator: The next question comes from Ioannis Masvoulas from Morgan Stanley.
Ioannis Masvoulas: Just 2 questions from my side. The first, when we look at the EBIT bridge '24 to '25, what sort of fibre cost increase have you seen in your business? Because you talked about pulpwood prices doubling, but you didn't necessarily bought at the peak. So some clarity on that would be very useful. And then the second point, I think in October, you were talking about a $25 to $30 per tonne improvement in Fibres South. Today, I think you're talking about a EUR 15 per tonne improvement. Could you just reconcile the 2 figures? And what shall we be baking in on a 2-year view?
Massimo Reynaudo: Yes. Well, let's put the currency apart. If I mentioned euros, that was, let's say, a mistake. We always talk dollars over there. And then, yes, let me correct it. I think we talked at the time I'm checking in $25 to $30 in 2 years. So I restated that, not $15, but $25 to $30 in 2 years, dollars. And then there was the other question about...
Tapio Korpeinen: So wood cost. So basically, again, point being that when it comes to Finland and wood cost during last year, as we do have a delay of, let's say, at least 6 months from when we buy wood to when we actually consume it at our mills, then we did still see during the last year '25, as said, even in the fourth quarter, a negative impact from wood cost compared to the previous year. Then any kind of benefit from the fact that from summer on, we have seen a movement downwards in the wood market price in Finland, that benefit then will start coming into the bottom line only during this year. And I would say, let's say, more meaningfully from the second quarter on.
Ioannis Masvoulas: Okay. That's very helpful. But if I were to push you a bit, could you perhaps provide a quantum of cost tailwind you've seen realized through your P&L in 2025?
Tapio Korpeinen: No, we don't disclose that.
Operator: The next question comes from Andres Castanos from Berenberg.
Andres Castanos-Mollor: Two questions on the Versowood deal, please. Can you please describe the efficiencies that you will unlock by partnering with Versowood? Meaning why and how partnering with them will make the cost of the pulpwood you need cheaper versus spot prices? And I guess also the complement to this question is, how much of your wood needs in the Northern platform are now covered either by the Versowood agreement and by the forest that you own in Finland?
Massimo Reynaudo: Okay. Let me cover the question about the deal and the logic behind the deal. Basically, Versowood being, as I said, the biggest sawmill in Finland and was in, let's say, -- had an interest for locks to feed is capacity and for a sawmill that is what we could put in this deal and what we did put in this deal. On the other hand, what we are getting through this deal is availability of pulpwood and chips, which is what is important for us, for our pulp production. So this is the, call it, industrial logic behind the deal. I do not have at hand numbers to share when it comes to, let's say, percentages of wood needs covered either way. Let me see, Tapio, do you have anything?
Tapio Korpeinen: Well, let's say one can say in terms of our own forest, obviously, that varies in a sense a little bit depending on the market situation, but round figures, one can say that from our forest we can get -- which is about 0.5 million hectares in Finland, we can get around 10% of what we need. So still majority has to come from -- vast majority from sort of outside sources and don't have a number to disclose in a sense how much this Versowood deal will impact that, but obviously, will be a sort of meaningful increase in our sort of secured wood supply from the synergies that this partnership will give us.
Andres Castanos-Mollor: Okay. Another question, please, if I may, would be on the biodiesel market, good improvement this quarter. And I was wondering if this outcome was sustainable or we are seeing one-off effects because of maybe from buying ahead of the implementation of the new RED III regulations. Do you think this performance is sustainable going forward? And yes, what dynamics are you seeing there in the biodiesel market?
Massimo Reynaudo: Yes. I would say that to answer your question, we need to do -- to go behind what is -- sorry to go and talk about what's behind this performance or this performance improvement. So some elements are linked to, I would say, improved market dynamics and improved prices on the market. But there is also a part which is meaningful that is down to own actions in terms of improved operational efficiency and output out of the Lappeenranta refinery and improved sourcing of crude tall oil and improved cost of crude tall oil, which is the feedstock that we are utilizing for this business. So if we look -- so the market considerations, we leave it to everybody because we can guess about that the same that everybody else can guess, if not acknowledging the improvement that has been visible in the last couple of quarters. But then when it comes to our actions, they are there and they will be continuing to yield results. Now also if we -- in this area, I want to take the opportunity of this question to broader the angle a bit beyond one or a couple of quarters. And because there have been some significant changes in this space with the issuing of the so-called RED, Renewable Energy Directive #3 in Europe. And on the base of that directive, if and when implemented and implementation is going to be driven by the different countries, that is going to be increasing according to a number of sources, the demand for biofuels and sustainable aviation fuels from 6 million to 20 million tonnes in Europe by 2030. So it is a significant step up. And this is going to be coming from elements like increased minimum targets, minimum greenhouse gas reduction targets in transportation. A minimum target needs to be achieved of 14.5% for all transformation modes. Then when it comes to aviation, there is a target to increase the use of sustainable aviation fuel from 2% in 2025 to 6% in 2030. Besides that, by 2030 as well, let's say, first-generation biofuels made, for example, out of palm oil or palm oil waste will have to be phased out. And Germany, for example, talking about implementation of the directive in the different countries, Germany has made the decision to phase it out latest by 2027. So basically, and without going into further detail, there are the implementation of this directive is going to be changing and changing in a very positive way the general market situation in this space. Okay. With this, I'm mindful of time and that we have used the time that was available. So thank you all for your participation and for the questions that we are being able to answer. Thank you very much. Have a nice day. Bye. Bye-bye.