Billerud AB (publ) (BILL) Earnings Call Transcript & Summary

I don't know how you feel. I feel super good to have a live audience because I have enough of teams. I know there are many of you on the webcast, but I would like to thank you to have come, and I hope you will enjoy this afternoon as much as we will do. So before I start, priority #1 is safety. And do I click here, I think I do. Here we go. And I just want to remind yourself to find the exits. There is assembly place at the parking lot if there's an evacuation, you have some fire extinguishers and you have a defibrillator in the lobby. And because of COVID, we placed you a little bit far apart, I hope you don't mind. And also during the mingle, please keep your distances. And for those of you who are following us over the web, I hope you're safe and you know what to do if something happens. Okay. So before we start, I want to introduce to the team. So I've probably 2 people I don't need really to introduce. One is Lena Schattauer, our Investment Relations Director; and one is Ivar Vatne, our CFO. But I think all the others are maybe a little bit less known. So I thought I will just introduce [ CMT ] and the presenters and please say who you are. Keep it to the point. So I'll start with you, Andreas.

See if this is on. Hello, everyone. My name is Andreas [ Mason ], and I'm the General Counsel of the company. So I'm heading up the legal and compliance work in BillerudKorsnäs. I've been with the company for 9 years since the merger of BillerudKorsnäs, and I have a prior background in corporate law firms in Sweden and in the U.S.

Thank you, Andreas. So I have the benefit of being responsible for human resources in BillerudKorsnäs, and I've been heading that position the last 5 years. And my background is from huge international companies within the pharmaceutical areas such as Johnson & Johnson and Pfizer and lately also within fast-moving consumer goods. So Unilever and [ Ala ] was my prior employment before I was happy to join BillerudKorsnäs.

Thank you, [ Paulina ]. And I'm [ Nina ], the [ VP ] Communication of [ brand ]. And I joined the company 6 months ago, coming from a broad background or marketing, communication and branding and both from the private and public sector. And before joining BillerudKorsnäs, I did the World Expo in Dubai, which is currently running the Swedish participation there. And I'm really looking forward to delivering excellent communication and branding work for BillerudKorsnäs together with my team. Thank you.

Yes, [ to do ].

No.

Everyone here in the meeting room as well as online, my name is [ Anna Maria ]. I'm actually [indiscernible], you probably will hear it in my accent. I am heading wood supply at BillerudKorsnäs. Been in the company now 7 months. And my heart actually beats for supply, sourcing and supply chain management. That is my professional background. I have been working in mining in the forest and paper industry, but as well as fast-moving consumer goods business as well as packaging before. So nice to meet you, everyone.

Hello. My name is [ Tore Lundquist ]. I am Head of Operations since August of last year. I came from [ Stora Enso ] into Billerud in 2010. I've been heading up the [indiscernible]. And before I joined this position, I was working for a few years in our solutions part of the business in the United States. I have all in all, about 25 years of experience from the pulp and paper industry.

Good afternoon. I'm [ Michael Nelson ]. I'm heading up product innovation and I joined BillerudKorsnäs 6 months ago. Have a background in fast-moving consumer goods. And the latest I came from Normal Foods, where I head up the Nordic R&D being responsible for product and packaging development.

Hello. I'm [ Matt Hurst ]. I'm the Executive Vice President for Commercial. I'm British. I'm actually based in Stockholm, and I'm happy to say I've just completed my third month in the company. If you look at my professional background, I spent my entire career in B2B companies, my entire career in sales and commercial roles, and I spent the last 16 years working for a company called [ Essity ] in the Professional Hygiene business area. Thank you.

Very good. Thank you. And last but not least, I also would like to introduce our Chairman Jan Svensson, I think many of you have greeted him already. Thank you to be here today, Jan. Good. Agenda. So we have a relatively short agenda of presentation, and we have tried to leave significant time for Q&A. I know from experience that, that's what you're after, and you find that probably more interesting. But we wanted to give you a good overview of our thinking of where we're going, what are the priorities we are having, where we see the challenges, what needs to happen to make us a really performing company. So we start -- I'll give you a quick introduction of our strategy of what I found when I joined the company. Then we talk about the market opportunity with Matt. We talk about innovation, and that's why we have Mikael here today. Then [ Tor ] will take on the operational journeys that we have to go through. Mary will talk about wood supply. And finally, Eva will have to bring all that together and talk to you about the sustainable and balanced finance that this will deliver. Then we go for Q&A. And during the Q&A, we take questions online. So you can already, I think, question soon and provide them, and we go between the room and online and see how the discussion goes. During the break and during the mingle after that, if you are ready for that, you're most welcome to talk to everyone that's -- everyone has a name sheet, and I think the team is really eager to talk to you as well. So take that opportunity, and I'm looking forward to talk to you as well in a one-on-one capacity in the break. Okay. Very good. When I started, I think many of you asked me, so what is -- what did you find? Why did you join BillerudKorsnäs? And I think I'm now 1 year in 17 days or something. And I think over the time, it was very clear that the things I found are probably all what you normally do when you join a company, something is absolutely brilliant. And in some other areas, there are some challenges. But before I go there, I just wanted to let you know even when I joined, I did not realize how tremendous the opportunity for BillerudKorsnäs was. We are really on the sweet spot of trends, on materials of the products we are making and the opportunities to innovate and bring that forward. And these trends are the climate crisis and the circular economy. I mean, you all have heard about [ as a COP2 ]6. And in the [ COP26 ], a lot of discussion about fossil fuel. BillerudKorsnäs is already 97% fossil-free. You have heard about the issues of coal. We don't use coal. You have heard about the challenges with plastic and what has to happen. And I think this particular trend is really the sweet spot where our material with primary fiber really has a role to play. Then we also see a lot of change in consumer behavior and shopping behavior and that drives brand owners and our customers to find different solutions for different of [ these ], in particular, in e-commerce. And I remember, I think I was 3 weeks in the job, and one of my colleagues asked me, "Hey, we are talking to Amazon. So one of different solutions. I want to go from basically their plastic -- automatic plastic packing to to paper packing and these type of things. So a tremendous opportunity, not just from an environmental, but also from the kind of behavior changes that we see in the market. Then finally, a lot of people forget that our material is actually is, I would say, the source for recyclability when it comes to paper and cartons, et cetera, because without new fibers, there would not be any recycling. Today, in Europe, the recycling scores are actually quite disappointing. So I was told in average, only a fiber would be recycled about 3.5x. And that has nothing to do with physics of the fiber nor with the recyclability that has to do with behavior in the market of basically bringing the things to be recycled. And if you take machinery into account, you can probably recycle fiber between 7 and [ 14 times ]. And if you go a step further, there is no reason why fiber cannot recycle endlessly if you treat the fiber and the recycling process in a good way, okay? So renewable resources and raw material is super important if we would stop using primary fibers, you went up with nothing to recycle within a few tons of the fiber. And then finally, digitalization. I mean it sounds maybe funny that I talk about that, but you look at our list of customers, you find a number of them are really, really big, and then it goes very, very quickly and very small numbers. And therefore, the digital opportunity for us to sell online and have an online relationship with most of our customers is actually a huge opportunity for us because at the end of the day, once we have created a relationship, customers don't want to talk to us every day. They want to order their staff. They want to follow their orders in our systems, and they want to have their product on time in spec and full, et cetera. And clearly, that's an opportunity. That's the external ones. The internal one is probably as big. As you know, we have been a company who came from many, many different parts of the industry, put together in 2012. And I think even since 2012, not all the integration has been done properly at the point of saying we are [ one ] BillerudKorsnäs. So we are currently also running in parallel to our strategy process to harmonize our processes, to do best-in-class on [ those ] and then digitalize them to make our working internally much more efficient, cheaper and also more effective for our customers. So these trends are super, super good for us going forward. So what did I found and all this -- most of you have already heard them, so I will be very quick. What was great I talked about that, excellent market positions, sweet spot of trends. And then one thing we often underestimate, we have a huge amount of very dedicated and very qualified people in the business, okay? So when you look at the performance of the past of BillerudKorsnäs, it's not because of the people. It's how the people were challenged to basically deliver the energy on one direction which was maybe lacking but not the quality and the people in themselves. And then finally, the same for innovation. There's an enormous amount of technology, IT and other capabilities in BillerudKorsnäs, but maybe it wasn't so focused and so commercial in the past. And these are the good things where it's just very simple to put focus in good system to get a better result. Then what were the challenges? Clearly, I mean, if you have accidents, the company is the #1 in safety. We work in inherently quite dangerous industry with big machines, lots of chemical reaction and things like that, and we have to get better at this. I think we have made progress and [ Tor ] will talk a little bit about that later, but still that is on top of the agenda. Lack of common vision and focus on the core. I mean, when I joined BillerudKorsnäs, we had solutions, we had ventures with lots of different other businesses, and I think you've heard about them. But if you compare those to really our core, they're relatively marginal, okay? And I have learned in my long career that if you want to succeed, you focus on a very few things and do them very, very well. So our strategy is actually a lot about focus of the core business that we have which is very competitive. Production stability. Over time, I think we lost a little bit of plot. We have stability, which is not in line with industry best practice. We need to get there. You're all aware of our adventure with [ KM7 ], which I think is now under control, and you have seen the results already this year, how well they have -- it's going. But production stability overall is still a big, big thing for us where we see enormous opportunity for organic growth. Finally, financial performance. You know all about that probably even better than I did when I joined. It was not so great. And I heard already this morning when we released our press release that some of you were a little bit disappointed that we didn't put the EBITDA target sky high. But you know what, we have never reached that EBITDA target, okay? So I think we will walk and once we know how to work very solidly, then we start to run. So that is why, in my view, in the debate we had with [ Eva ] and the team, it was really -- we want to be a minimum of [ 17% ], and that basically sets a bar that actually want to be better. But let's get there first. And you can see on the slide compared to our peers, we have lost a bit away on profitability in the past. I think the management team before I arrived, did the absolutely right thing. The company didn't -- wasn't doing too well in the beginning of 2020, and they put a plan in place of saying. We only do 4 things, which I think is the right thing to do. Ramp-up [indiscernible], cost and efficiency programs, safe and stable production competitive wood supply. And I think these were exactly the right thing to do. And as you all know, during the quarters, I have never changed that. I think this is the right thing to do. What it lacks now is, I think, a future direction in the next 5 years, the next 10 years. And what we have done is we take -- took these priorities and integrated them in the overall strategy. So what is the strategy? Well, in very simple terms, it's setting the priorities of our business going forward. And maybe what is different of the pass is that we did not put the assets into the middle and then said, "Okay, now we have these machines what will we do with them? Okay. We started by actually looking at a much wider way of saying where the market moving, where -- which regions are growing, where are the opportunity? Where really is the brand owners and customer segments that we think can -- will have a competitive advantage using packaging materials that we are making, and we started from there. So I remember in March, May -- March to May, we really, really focused on that with a long debate with the Board as is the right direction, what is our capabilities, can we actually leverage on those. And only then we went back to tourist organization and say, "Hey, can we make these things? And what is the best way of making them? And what assets, therefore, needs to be prioritized and what assets less so? And in which assets we need to grow? And in which asset we actually -- innovation capabilities for added value even keeping the growth or the production at the same level it is today? And then finally, the question came to Mary and say, "Hey, Mary, where [ it would]?" Okay. We're in a tight wood basket in Scandinavia, as you all know, Sweden probably tighter than some of the neighboring countries, but still, okay? And if we want to grow in a good way, 3% to 4% year-over-year-over-year, which we haven't done in the past yet. Clearly, we need raw materials and fibers. And basically, what we will do this afternoon is take you through the strategy. So Matt will talk about commercial. And he will talk about why priority on [ cartonboard ] and containerboard? Why do we think the U.S. is a great market to grow while Europe still remain our core? What are our choices we do in liquid packaging board? Why do we think value added in sack and kraft is so important. Then [ Tor ] will tell you why do we need a little bit more CapEx to move from maintaining of what we have to move it into best-in-class, in particular, of modernizing some of our factories and not just doing the CapEx to maintain them exactly as they are. Finally, I think you also realize, I always said [ 25, 26 ], It's very hard to be precise on the date, we will run out of organic volume growth opportunities. And then the question at some stage will become, should we buy a factory and convert it? Should we build our own mills somewhere else and where? Or can we have existing assets in our stable, so to say, that we can further change and add productivity move away from being a forestry organization to a proper wood sourcing organization, using the tools and the processes and the things that you have in the industries all around the world and apply that to our fiber supply. So very important change. And Mary, you will talk about that a little bit later. Then you all know that a strategy with our 3 major building block is deemed to fail. So if you don't take care about sustainability, if you don't have the right people and if you don't have a good business system behind, all this will either be very painful or very slow, okay? So when we talk about sustainability, there are clearly 3 areas. There's one area, which is the whole area, which was a bit towards our customers, recyclability materials, strong materials, how can we give them solutions that they can shine and contribute to their customers and their consumers at the end. Then in operations, it's all about our scientific target to be 100% fossil-free. But then, in the next 10 years, people will start to argue well, biogenic CO2 is also important because it's CO2 at the end. It doesn't matter if it comes from a tree or from a fossil. And what is our view there? And then finally, in wood supply, being a little bit less of its size, but still, we have transport logistics and inter within our shunting cost within the factories, how do we make sure that we are fossil-free and actually us using as little CO2 as we can. When with our people, we will not go in detail except we have time at the end, but it's basically about talent management, succession planning, the right skills at the right time. I think a lot of you in quarter 3 asked me, so is recruitment of high skills in the country side now easier with COVID, okay, which I thought was an interesting question. But actually, what we see in our mills, there is enormous potential of people who want to work on our mills and all things, but we are competing against other people who sit also bit decentralized. And it's important that BillerudKorsnäs remains a fantastic employer if we want to take the strategy at the right level to 2030. And then finally, I've already mentioned it, one BK is really about this, I would say, the integration debt that we have to bring our systems and processes and methods to the 21st century and be one company, not different mills with different systems and different ITs. Good. That was basically the strategy in a nutshell. And I'm sure you said, "Oh, Christoph, this was so boring because you never go into the detail." But that's why I brought my colleagues. And then we'll now go into the detail and tell you a little bit and give you color. And I hope that we have an exciting Q&A session after all these presentations when you get to see a little bit in the kitchen of what these ladies and gentlemen are doing for living. Good. Well, having said this, Matt, may I ask you to come and I'll hand you over this little click.

Thank you very much. I think I just got my brief, which was "don't be boring." Okay. So I'm going to spend a few minutes talking a little bit about our market opportunity and also our commercial strategy. And I'm going to start with some strategic choices. And those choices we have made is relevant to our business areas and the role that we would like our business areas to play within the total portfolio. So if you look first to paperboard, we consider Europe to remain our powerhouse, and we'd like to ignite growth with some focus on North America. If we look to liquid packaging board, here, we'd like to accelerate growth, but with some select opportunities. And if you look to sack and kraft, this is going to be very much about improving mix through profitable applications. And what I'm going to do over the next few slides is give you a little bit more color as to how we've landed upon some of those choices. In addition, we've reexamined the role that innovation plays within the company, and we'd like to strengthen its contribution back towards the core, and we're going to do this by stepping up impact-led innovation. And my good friend and colleague, Mr. Nielsen is going to come up after me and be as equally interesting, I hope. Okay. So let me paint the biggest picture. The paper and board market. It's big. It's really big. It's about 420 million tons big. And we choose to play in what you can describe to be a relatively large niche, which is primary fiber packaging. And this particular part of the market contains product segments such as container boards, cartonboards, sack and kraft papers and liquid packaging boards. And we think we are really well equipped to complete in this space. Why? Free things. We've got access to really good quality raw material. We've got a really competitive manufacturing footprint, which, by the way, only happens to be almost exclusively powered by biofuels, and we've got huge knowledge and expertise. And what we're able to do is match those things up. And we're able to develop sustainable packaging grades, and these packaging grades delivered superior performance that enable us to meet some of the toughest demands that our end users have. And if I give a little bit more color to that, our materials are really, really well suited when characteristics like strength, like durability, like attractiveness, like appearance, like product purity, like sustainability or even runability are important purchase considerations. So we start from a really good place. You could say that actually in this big world of packaging that BillerudKorsnäs is actually quite a small company. But if you look to our serviceable available market measured in terms of capacity, you can actually see that we are the fourth largest player globally. And actually, and as Tor will share with us a bit later, we've got a super strong platform from which to grow. So as we start to think about growth and as we start to think about our investment choices, we would like to say that we are clearly prioritizing board over paper. And we're making that choice after carefully assessing our ability to serve our customers across an entire business cycle and after assessing the competitive dynamics, the growth rates within the market segments and the financial attractiveness back towards ourselves. And if I just give one small example, maybe I talk here to containerboards where the primary fiber portion of the market is expected to grow by some 2%, we have a superb position, #2 position on semichemical fruiting in Europe. And here, we're providing products predominantly towards the fruit and vegetable producers in Southern Europe. And the reason they choose us is because our product performs the best in humid conditions. So it's very simple. We're going to continue to focus on areas where we've got a complete set of advantage. If you look from a geographical perspective, Europe today represents about 70% of our packaging material sales. It is and it will remain our home market. We see that there is attractive opportunities for us to continue to grow. If you look to the other parts of the world, if you look to the Americas, here, we're kind of excited. We see there is a really good opportunity to grow. And specifically, we're talking about cartonboard and containerboard. And I'm going to share a little bit more detail with you on this over the next couple of slides. If we look to the other parts of the world, if you look to Asia and maybe the rest of the world, our intent [ series ] to grow with the market and take selective opportunities as and when they arrive. So now I pause. I take a sip because I'm going to share with you a little bit more on North America. So why is it that we believe we can succeed with cartonboard and containerboard? Well, this is a story about opportunity, and it's a story about opportunity in the land of opportunity, okay? If you look at the addressable market in the North America, it's absolutely huge for primary fibers. If you looked at the underlying domestic capacity, it's somewhat limited and one could argue that maybe that the competition is less fierce right at the top of the pyramid where performance characteristics are so important. Thirdly, we believe, after our assessment, that there's going to be a strong pull from brand owners and independent converters based on the prevailing market structure. And I'm going to go now into cartonboard just to explain this a little bit further. So if you looked at cartonboard today, the market is estimated to be around 6 million tons, it's pretty big for primary fiber, and it's going to grow. We estimate it's going to grow another 1 million tons by 2030. Secondly, there's a growing preference in North America for packaging to be produced and constructed from FBB, so folded boxboard construction, over and above SBS constructions. Now for those that don't know, FBB, Folded Boxboard construction, is the preferred construction that exists in Europe, and it's been there for quite some time. It also happens to be the construction that underpins our own [ Crownboard ] range. And you could say, why is there a growing preference? Well, actually, this is simply associated with cost and sustainability advantages that come from lightweighting. And for those of you that don't know, lightweighting is effectively about producing same level of performance, but with less fibers. And this is a story we already recognized to say, "Hey, that's going to fly with brand owners. That's going to fly with converters given the existing trends that are out there." And then the third feature, I think on the North American market is kind of interesting is if you looked at the folded carton converters, about 36% of the industry today is independent. What does that mean? They've chosen not to vertically integrate and produce their own packaging materials. So what -- well, I think and we think there's quite an exciting opportunity here. We think it's an opportunity for some long-term positive some relationships, but particularly with big friendly Swedish company like ourselves. So all in all, in North America, we're very excited to say, yes, we feel there's something clear. Let's then move to liquid packaging board. Liquid packaging board is our biggest segment. We've got a leading position within the global category and actually the leading #1 position when it comes to long life ambient packaging. If you look at the market, we have some annual demand of around 4 million to 5 million tons. This is actually the smallest market in which we play today. But we're overweight in this position compared to the other markets in which we trade in. If you look at the growth rate of the liquid packaging road market, we expect it to be positive, some 1% to 2%, but this growth will be predominantly skewed towards markets outside of Europe. So if we stand back again, I would also conclude to say, "Hey, look, we are really well positioned to compete in BillerudKorsnäs, why? Well, 2 things. We've got relationships with every major customer in the market. And secondly, we're kind of famous for producing really high-quality board. And what we will do is with the volumes we allocate towards this business segment, we will pursue growth selectively and will do so by optimizing our mix with our customers, with our products and with the markets in which we're playing using the board system that we have in manufacturing. And then the last point, I think relevant to talk around in liquid packaging board is that together with our customers, we will continue to work on improving the product portfolio and we'll improve it towards demands that we see that need to come up in the future. Specifically, I think in liquid packaging board, the industry needs to start to solve the sustainability issues longer term, specifically around recycling. And if we can find a way to help our customers to help them find alternative to the aluminum they're often put in on our products, then we're going to be in a really good place with society. Okay. Now to sack and kraft. Sack and kraft, relatively speaking, is a smallest of our business areas, makes up about 25% of our net sales last year. And here, the materials that we are providing are suitable for quite a broad range of applications. And these applications range, they range from building materials to food, to retail, to hygiene, to medical. So it's a very broad portfolio of applications. And I think important to recognize that the competitive intensity varies between applications in this space. And it also varies within an application depending on its position within the business cycle. And why do we see this competitive intensity? Well, it's simply down to substitution effects, it's simply down to the fact that there's lower barriers of entry. So what are we going to do within this context? We will focus our energies towards a portfolio of applications that deliver sustainable quality returns over the entire business cycle. And if we stand back and ask yourself what does that really mean? It's about matching where we feel that we've got superiority advantages in terms of the products we produce with perspectives that our customers have towards value. What does that mean? It means we are interested in finding those applications where value is a relevant discussion where total cost is a relevant discussion. And we're kind of not wanting to put so much effort into those application areas where it's all about price, okay? If we then say -- if we look at sack and kraft, I think another exciting opportunity in this particular space relates to brand owners. And we're really pleased that actually a number of brand owners are actively reaching out to us. No demand generation needed, they're coming to us and they're coming to us to help them try and solve how they switch from going from plastic to paper in their own packaging solutions. That's quite incredible. So when it comes to sack and kraft, I think we're quite clear that we are not going to invest for growth, but we will continue to invest to add value and for innovation. And when it comes to innovation, one particularly important development area for us is going to be around barriers. Okay. Now I've kind of given you a little bit of color so far on where it is that we're going to play. But we're also really confident about our ability to win in these spaces as well. And why is that? Because we've got a really compelling value proposition. It's built on free [ legs ]. I've talked already a little bit about in this presentation about producing superior products. And we will continue to produce superior products and services measured in the eyes of our customers. The second leg that we talk to is about being the easiest to do business with. And this goes beyond reliability. I think as Christoph mentioned, our customers need us to be able to service them in the way and through the channels that they need us to. And the third pillar, the third part of our value proposition is about being the most sustainable choice. And actually here is something that we have a competitive advantage around. We are widely regarded to be best-in-class. When the indices come out, we were at the top or we're somewhere near the top of them. Why? We've already told you about the biofuels. We've got 100% of our raw materials come from responsibly sourced service -- sources. So at company level, we've got a really nice story. But actually, we're finding really smart ways to bring this down to our customers through our superior materials, through our superior services like our Boxlabs that we have and our intelligence and expertise we're able to enable our customers to develop their own climate smart solutions. And I think at this point, I'm now going to call my friend, Mikael to the stage, and he's going to share a little bit more about how we'll look at impactful innovation.

Thank you, Matt. So as Matt already mentioned, we reexamined the role of innovation, but we also did some adjustments in how we run innovation during the last months. For the last 4, 5 months, we changed our innovation process and also the related governance structure of our projects. And the ambition was to drive transparency in projects and portfolio to really strengthen their commercial focus and also to drive prioritization to make sure that we invest where we get the best back of it. We did some really basic stuff. We introduced one process regardless if it is short-term application development or a longer-term innovation project involving new technologies. We also established some very basic tools, which [ I'm ] used from the FMCG world to give us a good steering of the portfolio. So we know when the innovation hits the market. We know the total value we have in the pipeline, and we know how disruptive versus how core innovation we are. What defines our innovation agenda item? Well, we are committed to challenged commercial packing for a sustainable future. And what does this mean for us? Well, if we ask our customers and brand owners, this is the answer that we get. And this is actually the result from a survey that we did earlier this year. And as you can see, sustainability recyclability, plastic replacement, it's all among the top comments. You also, as Matt already mentioned, find barriers in various comments and barriers means a lot of things. It can be the more traditional extrusions when you laminate a plastic film to a board or to a paper or it can be more new advanced technologies when you have a dispersion of a barrier that you pour into paper and build up the barriers by that. And we think that those more advanced barriers will be the solution going forward to meet the future sustainable materials. Of course, there are also other drivers for us. We have legislations. We have regulations. We had a single-use plastic directives that came earlier this year, that also gives input to us when we define our innovation agenda. What is good is that we have a solid base to build from in terms of doing innovation to meet those trends. If we take food, as an example, it's really important to understand what you would like to pack in a certain material. You need to understand how the product interact with the material and vice versa, how the material interact with the food. You need to understand if you should protect versus water vapor or if you have oxygen or if you have grease and fat that you need to control. All this will be packed together when you do the solution of the barriers. We also have a very strong foundation within sustainability, as you know. We are using virgin fibers. We are 97% fossil-free in our production. So we can do this really good. And the basic material we are using in terms of the paper also have very good properties. So when we start to build barriers on this, we start already on a high level. To produce a very good barrier product, it's really important -- and if you want to have that easy recyclable, it's really important that you have thin resource-efficient barriers or layers. And to get this, you need to work with certain technologies. We already mentioned the dispersions and how you build that. You also, of course, need to have the technology in form of cut in [indiscernible] to put the barriers on the paper. If we can produce the paper and you also add a vacuum coater, you can metallize the surface, put a small thin film of metal on the surface and then you can remove, for example, amino [indiscernible]. So all this will help us to build a sustainable materials for the future. We also continue to invest in Paboco. And we do this together with ALPLA, which is a strong partner, one of the world-leading partners in bottle manufacturing. And I know you have seen this project before, but I think we are in a very interesting phase now when the first generation of the paper bottle has been launched together with some pioneering brands. And we are also, at the moment, accelerating the development of the next generation of the paper bottle. The next generation will be a paper bottle with a fully integrated bio-based barrier, and it will hit the market in early 2023. But for the moment, some brands like Coca-Cola and also L'Oreal has done or is doing market trials with volumes of the of the paper bottle, and we also have Procter & Gamble coming in starting to do a market launch and test next year, early next year. But it's also important that we continue to innovate on our core and also drive superiority. And I think that the Pure Supreme is a good example of when we drive superiority. In this case, it was enabled by the new board machine at [ Gildan ], which made it possible to further improve this material. We could make a material that was has better strength and stiffness, and we've got a very good customer feedback saying that it now runs better on printers and on converting machines. We also have the [ Oakley ] project where we worked very close to a brand owner. And this is a brand owner that is known for their strong sustainability agenda. [ Oakley ] came to us with a request of developing a new secondary packaging for the Asian markets. And for the Asian markets, you have a very demanding climate. The request on [ Oakley ] was to have something that reduced the carbon footprint. It should be based on recycled fiber, and it should have an FSE claim. But really challenged the conventional here and also understanding the needs of this customer, both in terms of performance and in terms of sustainability, our experts at Box Lab could design a box made of our virgin fiber that meet all those criteria. And in fact, we reduced both the cost and the environmental impact with this new material. So it ended up with having a 35% reduction of the carbon footprint -- sorry, a 50% reduction of carbon footprint, 35% reduction of packaging material, and we also reduced the water consumption with 58%. So before I end, I just would like to emphasize that for our innovations, it's really important that we work close with our external partners close with customers and brand owners to make this happen. It is also really key that we have the commercial focus in all projects we are doing already from the beginning, and we also see barriers and, in particular, dispersion barriers as one of our main focus area going forward.

All right. Thank you, Mikael. I would suggest we have now a break, about 20 minutes. So for the online audience, maybe if you're back at 10 past 2 and the same for us. We are back at 10 past 2. And please take the opportunity to talk to us in the break, and I think the exit is over there, and we have a coffee in there for you. Good. Thank you. [Break]

Am I on here? Thank you, Christoph, and welcome back from the break, and I hope you have enjoyed the program so far. It's all about sustainable and profitable growth. And Matt has told you that he wants to sell more cartonboard, more containerboard and more liquid packaging board. And of course, for me and my operations team, that means that we need to push the boundaries of our volume output from our mills, and we have a plan for that. So the mission within operations is quite straightforward. At all times, we want to maximize the capacity utilization at our mills at the lowest possible cost. It's our job, so to speak. But we also want to do it with premium quality products, and we want to do it with good delivery service to our customers. So the strategy that we put forward in operations, we have 3 choices that we are going to focus on. So first, up until the 2025 mark, we will focus on continued efficiency improvements at our mills. We will also look at particularly the board mills with debottlenecking investments to push that capacity boundary a little bit higher, so we can get more product out. And of course, still a very important building block for growth is the continued ramp-up of our big investment in Gruvön. Looking beyond 2025 and towards 2030 to continue the growth, we would need to make a little bit more bolder moves. So we're assessing our current production footprint to see where can we make good changes to improve and increase our capacity. And on top of it, we are open for M&A opportunities in our targeted segments or in assets that we can convert into our targeted segments. So that's the summary. But first then, let me talk a little bit about safety. Christoph said in the beginning, this is our highest priority. It will always continue to be so. Our vision here, of course, is that no one should be injured in our paper mills or in the forest operations. And that goes for our own employees as well as for contractors. So we're not performing top level here, as Christoph also alluded to. I would say we're about average in the industry. We have made improvements over the years, in particular, I would say, on the contractor side. Few years ago, the contractor lost time injuries were double than our own employees. Now they are on the same level, but still a little bit too high. So we need to push this improvement agenda furiously forward. And we have set ourselves a target in 2025 to go down to manufacturing industry standards, which is below 1.5. We can see it's a long way to go there. We have a trajectory going down. We need to improve by 25%, 30% a year here in our KPI, which is lost time injury frequency rate. We are making good strides here. I just want to show you this trend. Over the current year, we are actually precisely on that curve that you saw on the last slide. We are looking to improve by about 30% this year, and I am very happy about that. Our employees are very happy about that. Our contractors are also very happy about that, and we're going to continue this trend. So going forward here and getting out of the COVID framework, if you will, we're also looking forward to having much more on-site face-to-face safety trainings and most importantly, visible leadership out there, which is the most important factor to really improve the safety culture, which is what we're working on here. All right, back to growth. What you see here is a time trend of our production volume output, 2017 up until what this year will end. So naturally, you see here, at least '17, '18, '19, it's not growth. It's actually a decline in volume. If you look at the efficiencies of this time, it's not growth either. It's rather a sideway movement. So we haven't really managed that in the way that we have set out to do. So why not then? Well, several reasons behind this, of course. The biggest one I would argue is the 2 major investment products that we had in Skärblacka and Gruvön. When you make brownfield investments like this, when you take something out and put something new in, you will have a dent like this. It's sort of natural. Secondly, over this period, we've also had a little bit of a sluggish market. So we haven't been able to really fill our production capacity in the way that we had wanted. And thirdly, there was a bit of a split focus within operations when we organized our company into 2 divisions where we split up the operational framework into 2, that took away some of the benefits of having 1 agenda in the operations network. So from 2020 onwards, we have changed back. So we are now 1 team in operations. We can drive 1 agenda forward, which is very good, if you want improvements to get done. We're sold out. So we are -- we have more than we can produce, which is also very, very good. And those 2 investments they are coming into a good place. And as you see in 2020 and what we think about this year, we have turned the page and we're turning this thing around and we're quite comfortable that we will continue the growth journey going forward. So about growth then, we want net sales growth. And of course, that's about production, but it's also very important that we have the right product mix in our system. So we want to have more valuable products and also place them in such a way that it makes our company more productive. So that's a very important factor. Then price, of course, is a big lever for net sales improvement. And then again, efficiency is really the core of my job. And talking a little bit more precisely on efficiency, what are we going to do to make a difference here in the coming years? Well, we are focusing on 2 major things to increase the stability of our production. The first one is maintenance. So what we are setting ourselves up to do here is to create a maintenance system, which is really generic for all manufacturing industry, and we want to lift ourselves all our sites to the same level, implement the same way of working. So we're implementing 9 maintenance processes. We're taking a third-party company from the outside to audit ourselves. This is being done now over the fall. And the results from that audit, we will have a gap from where we stand at the different mills to best practice. This gap is going to be filled by actions, and we're going to be helped by this company to formulate those actions and then just move forward and raise our performance there. This will help stability and also cost, of course, within maintenance. The second part is CapEx. So you need investment money in our industry in order to maintain it, but also in order to develop it. And for the last few years, the nonstrategic base CapEx level, this is below the next generation of future platform MG and those, the recovery boiler in You have a base level that we use to improve ourselves and to maintain our mills. So during the period of the big investments, we have deliberately depressed that level a little bit. So down to where we are. Of course, we do the necessary parts, but the development piece has been put a little bit on hold for some time. Now we have decided to take that back, go back to a sort of normal level and even a little bit above it so that we can get an opportunity to catch up a little bit and to start developing. And this will also both improve stability, and we have -- we will have a positive capacity creep because we'll use it to do some debottlenecking. Some examples of what you do with this money, you have to exchange equipment that goes obsolete and modernize it. So it's about electrical infrastructure. It's about control systems that needs to be modernized. It's about critical equipment here and there that you need to -- you can maintain them for a while, but then you have to exchange and then upgrade. So we will do these things. And we will, of course, also work then on bottlenecking, as I said, and to increase the quality of our maintenance work. There's also now a fast development of predictive maintenance gadgets, if you will, that you can have out in your process that talks to you and tells you how the equipment feels and when it needs to be maintained. So that's good. We will try to expand that agenda as well. And then, of course, energy efficiency is always interesting, and we will go for energy efficiency investments with very short payback, use some money also for that. So those are the efficiency focus areas, maintenance and base CapEx. Going back to the board Now with the new investment in good ramp-up, we have a new situation on the board side, where we have 4 board machines. They have all good coating capabilities, meaning that they can make good print surfaces. They are all qualified for liquid packaging board. One is on the lower grammage range scale. One is on the high grammage range scale and 2 are in the middle. This creates a perfect piano for us to play the board game. And this is where, of course, we do the containerboard, the liquid action and the cartonboard products. And we will now optimize this system, not single machines, but the system so that we get the best quality product for our customers, the best run series, the best output and all these things. So with the continued ramp-up and qualification of KM7, this is going to be a good play for us. Now looking a little bit ahead, what are then the future a little bit bigger as a bolder moves that we can make in our system to continue growing. Well, what you see on the screen is what we have assessed to be technically possible. So take Gävle mill, for example, this is our biggest board mill that we have in our system. It is also our most complex board mill. And eventually, you will have to make a little bit bigger investment -- reinvestments there, for instance, there will be a recovery boiler coming around 2030 somewhere. When we do these things, we also need to set up that mill for a future game. And if we do the right things in the pulp mill, if we introduce CTMP in the board, we will suddenly have fibers left to actually put a new board mill, board machine there. If the CapEx is feasible, if we can get wood at commercial good terms and, of course, if math can sell it, that is a possibility. In survey, there's a monster machine there as well. There's more capacity hidden inside it, so we want to take that out. With the new recovery boiler there, we also have a possibility, if feasible, to expand the pulp mill there to make more of our own pulp. Today, we use quite a lot of external pulp in So again, if there is wood available and if that is a good deal also CapEx-wise, this can be done. In Gruvön, both KM7 and the floating machine PM6 can be further expanded. As with all paper machines, you never really reach the end game. You can always play with them to make them bigger, and this is already what we're looking at actually on KM7. In Skärblacka, we had a recovery boiler where we have spare capacity inside it, but the pulp lines that we have there are maxed out as it is today. So there is an opportunity there also to increase the pulp volume to meet the capacity of the recovery boiler, if feasible and if there is a wood. So that's about the growth agenda. Now finally, then moving into sustainability. You've already heard that we're a sustainable company. Our production footprint runs on 97% biofuel. So there's 3% of fossil CO2 that we emit to the atmosphere. A few years back, we committed ourselves to the science-based targets that came out of the Paris accords to keep the global warming below 1.5 degrees. And we have committed then to a 59% fossil CO2 reduction up until 2030. We are moving along with this plan. We're already purchasing all our electricity with fossil-free certificates. We have decided to build a backup electricity boiler in Gruvön to take away fossil top load from that mill that will be installed in April of next year, and we have the recovery boiler in Frövi that will improve our energy efficiency. The next step then mill by mill, and we're starting in Gruvön already decided, we will do a fossil oil conversion going from normal fossil oil to green oil alternative. And with this -- and that fuel is more corrosive. So you will have to change tanks and pumps and pipes and so forth to be able to handle it. We're going to do that mill by mill. The next step is to also convert the liquefied petroleum gas or propane that we use in our MG production. That is a little bit more of a stretch. The market for such green fuels isn't really mature yet. So we have put that a little bit further ahead. And then the final step that you see here is conversion of natural gas, that isn't relevant anymore because that was connected to our mill, which, as you know, we have divested. So we are -- have applied for and will soon get new goals that is in line with the science-based targets with the natural gas taken away. So this is the plan that we're following, and we are well into it. So at the very end here now, I want to present to you with sort of a vision for the future. As Christoph alluded to, CO2 is CO2, wherever it comes from. And of course, we do emit green or biogenic CO2 from our mills. We do. And there are talks amongst regulators that also this CO2 will be sort of targeted for something. So we want to prepare for this. And actually, we have told ourselves that this must be an opportunity for us. We have 5 mills where we're very concentrated amid this CO2. So we are looking at technologies now for carbon capture and storage. We're already having a program with University together with our cost per mill around this, but we will look more into this technology. We will also look into what other things can you actually do with the CO2? Can it even be a revenue stream in the future? We don't know, but hey, there must be technologies coming, right, Mikael, around these things. So we choose to see this as an opportunity. And I'll leave you with that thing as a very cool vision for the future. So I would now like to welcome and introduce my dear colleague, Mari, who will talk to you about the competitive wood supply.

Thank you, Tor. First, I will do a little bit of move here because I think so we may have an accident. Have to do that. But hey, I must say that I love it when Tor is talking about operations and, of course, from wood supply. We want to make sure that his dreams and visions and plans are coming true. So what I will talk to you about today is that how we are building competitive wood supply at BillerudKorsnäs as well as then about the transformation that we are driving in this area. So that's my focus for today. I'm pressing the wrong buttons here. Which one is it? Now it works. Good. So our -- actually, the problem was not here. It was here. So our mission in wood supply is, of course, that we secure a competitive supply of wood fiber to operations in line with our growth ambitions. And what we have done is that we have set 4 strategic choices or made 4 strategic choices to deliver on this mission, and you see them here. So what we will do is that we focus, first of all, optimizing our fiber consumption. And Tor, a little bit already talked about that previously. Then secondly, we will focus on building partnerships, long-term partnerships sourcing partnerships. And then thirdly, we will work on securing competitive fiber availability as well as then developing lean, green and flexible wood supply chain. Before I actually open up these and explain them a little bit more detail, I would like to actually tell you a bit more about wood supply what is actually that we do in wood supply at BillerudKorsnäs? So we are consuming 10.5 million cubic meters of wood annually, and that actually translates into a purchase spend of SEK 5 billion. And with this money, with this volume, we are one of the biggest consumers and purchasers of wood fiber in the Swedish market. In our supplier base, we have approximately 90 wood fiber suppliers, and we are doing business with approximately 4,500 private-owned forest owners. And as you probably know, we have a long-term supply agreement in place with BillerudKorsnäs, and that represents approximately 10% of our annual wood consumption. We are mainly sourcing from the domestic market. So 70% of our volume is coming from Sweden and the 30% is then from Baltics, from Finland and Norway. As an organization, we have actually very deep knowledge and roots in forestry. We excel that. And of course, I want to maintain that and build on it. But at the same time, we are actively working on building, sourcing excellence into our organization. So my vision is that actually wood supply will be by organization that excels in sourcing, but as well, we have deep knowledge of forestry. And I think you resonate with my logic here when you reflect what I was explaining previously. But I want to add 1 more thing to emphasize that, and that is that 24% of our annual volume, we are actually harvesting on behalf of the forest owners and 76% we are actually purchasing from our suppliers with supply agreements. Responsible sourcing is, of course, very important, and it's an essential part of sustainable wood supply, and we have set certain requirements on that. First of all, we are sourcing only from regions with growing wood stock. All of our wood suppliers have signed supplier code of conduct with us, and that is actually a precondition for doing business with us. We control 100% the origin of wood so that we know where it comes from, and that sustainable forest management practices have been applied. And then we as well encourage forest certification by our suppliers as well as private forest owners. And as a matter of fact, what we have is a group certification program that we are offering for private forest owners. And our ambition is that we have 260 private forest owners engaged in that program by 2024. And in the end of last year, we have 230. And of course, we have been working on that further with private forest owners now during this year. We believe that sustainable forest management practices, they are essential for preserving biodiversity, and that's why we are working so hard on this aspect in our wood source. When a tree is harvested, the ambition is always that we utilize the full tree efficiently and effectively, the whole tree, all of the parts for the best purpose that you can utilize the parts. Basically, after harvest, what happens is, of course, that the main part of the tree is delivered to the sawmills. And then while the pulp put that is coming from thinning and the final harvesting as well as then the wood chips come from the sawmill processing, those are actually delivered to pulp production and that is actually the product that we are supplying them to Tor in the end. We have previously stated and told that, and I think you know that the fiber availability is actually very good on the market at this moment. But at the same time, I think we all know and we are aware of the long-term pressure that is put on forestry as well as we know about the predictions that the demand for wood and wood fiber may actually be increasing in the Nordic region. This pressure on forest, it is, of course, coming from the forest debate and this political debate that we are having. And they are views in this debate that state forest should be actually a static carbon While on the other side, there are views that were saying that actually growing forest is positive for the climate change because of its ability to absorb CO2. What we know, of course, is that wood fiber is a very nice, sustainable option for replacing fossil high-emission materials. And that is actually triggering, of course, the interest and trend to utilize and consume more wood and wood fiber in the future. Preserving biodiversity, I think, is on high agenda for all, but it somehow seems that we are not able to agree how we should approach that in the future. Conclusions from this forest debate, these political discussions as well as the developments that may actually impact the wood market are not known -- they are unknown and they are in the long term. But of course, we have considered those when we were developing our wood supply strategy as well as when we were defining our 4 strategic choices. And I would like to now tell you a little bit more about those choices. How are we actually building competitive wood supply pillar Well, first of all, we will be optimizing our fiber consumption. And how we do that? Well, we will analyze our consumption, and we will work on our raw material mix. We will evaluate our hard and softwood mix. You saw actually the split in the earlier slide, and we will work on increasing the use of CTMP like already referring as well. And we will assess the share and split of pulp -- internal pulp production versus the externally sourced share. And the whole purpose of this is, of course, to find savings in raw material use, in the cost. But then if you put it in the kind of 1 sentence, the goal is to utilize the fibers in the optimal manner. Our pulp consumption is 3 million tonnes per year. We are actually sourcing 13% externally and CTMP share of the whole of that 3 million is 6%. So it gives you the magnitude. Then what we will -- the second strategic choice, it concerns about developing relationships with our suppliers, and we will be working on and building partnerships with our like-minded suppliers. And we want to deepen and strengthen our relationships with our key strategic suppliers. And this, we, of course, do in order to create win-win situation so that we can actually have a good fiber business and that we can grow together. That is the purpose. And of course, I would not be working on supply and sourcing if I did not say this as well that the ambition is to harvest the end-to-end benefits from the cost and efficiency improvement actions that we intent and want to actually drive with our partners then the third choice that we are making. We are actually working on building competitive fiber availability through supplier-based development and diversification. So what we want to -- maybe I explain first at the high level. So what we want to do is actually that we grow selectively our business with some of our current suppliers. And then what we don't want to do is to develop new sources of supply outside our current sourcing reach. And if we talk about the current supplier base, we want to continue growing our business with the private forest owners. We are today already seen as a reliable partner there, and we want to continue that journey. Then we will be focusing on the sawmill business. And there as well, I have been interviewing a little bit how we are perceived, and we are actually seen as a strong and reliable partner in that segment. So there is an opportunity to grow with those partners in that area, and then we will work on securing that we have a steady supply of fiber coming from the Then in terms of developing new supply sources. Well, we know that Norway has potential and harvesting region. And there is an opportunity for our suppliers and us to work on Norway as a region. But there are as well other potential regions that we are currently looking into in order to identify and, of course, develop the alternative sources of supply in the longer run. The ambition behind supplier base management and this development is really that we deliver volumes for growth. But then there is as well the second aspect that we want to manage the supply risk those, for example, supply interruptions, availability or cost-related risks. So we want to work on those. And then finally, the fourth choice. We are developing our wood supply chain. We actually want it to be lean, green and flexible. When you look at the wood cost -- the total wood cost, 50% of it is actually what 25% is logistics and 25% is harvesting. So with this information, we know already and based on the analysis, of course, that there are opportunities to actually do cost and efficiency improvement in this and impact the wood cost positively. 60% of our fibers are moving on wheels, 26% on rail and 13% on sea. What we want to do is actually work on finding sustainable solutions with our logistics partners to contribute our science-based target delivery on the group level as well from my team point of view. And then finally, concerning this flexibility, we are working on developing our ability, how we are able to actually steer and manage the material flows in the chain in the most optimal and flexible manner. So this is really a question about supply chain management and building that competence further in our organization. We do that, of course, by developing processes and the tools that part. But as well, there's a lot of data that can be utilized. Digitalization is, of course, an option in there. And I have to emphasize here as well, collaboration with suppliers so that we actually have an end-to-end supply chain, and we harvest benefits from this whole chain. So in summary, our mission is to supply with competitive terms, wood fiber to tour and operations so that we can actually -- not only he, but we together, we can actually fulfill our growth ambitions. And how do we do that? Well, we are actually taking a supply and sourcing perspective to this in order to develop it. And it is visible in our wood supply strategy as well as the strategic choices that we are making. So we will start with optimizing our fiber consumption in order to seek fiber savings. We are working on the long-term relationships so that we have actually partnerships that grow together and we harvest benefits together. We are developing the supplier base in order to grow with our -- selectively with our current suppliers and developing new sources of supply. And that's for the reason that we deliver volumes for the growth, but as well that we manage the supply risks. And then finally, we are focusing on developing the wood supply chain so that we become lean, green and flexible. If you put it in 1 sentence, how are we actually building competitive wood supply at BillerudKorsnäs? It is through sourcing excellence. That is our ambition. Good. But now you have actually heard about our strategy. You have heard about the strategic choices that we're making commercial, in operations and in wood supply. Now it is time to translate that into finance. So let me hand over to our CFO, Ivar Vatne, who will be talking about our balanced and sustainable financials. I promise to click this button.

Thank you, and good afternoon. So sustainable and balanced financial leases on the screen. And before we go into that, I just want to take a couple of minutes looking a bit in the rearview mirror, a bit of the financial performance that we had over the last couple of years. I'm going to start a bit with a busy slide, and this is illustrating 4 of our main KPIs that we are pursuing and looking over the last couple of years, and you can see also an indication of the target range that we've had set for itself. And I think it's fair to say that if you do a bit of evaluation of how we've done, it's a mixed bag. There's some positive uncertainty also some on the delivery of where we thought we would be. And starting on the left-hand side of that chart, looking into our net sales, yes, there has been a certain volatility in the performance. But actually, overall, we done pretty good. And on average, we're not too far off from the target range that we have set ourselves between 3% to 4%. And moving then completely on the other side of the chart and looking at the debt leverage that we've been able to achieve over the years, you would say that actually, for the most of the time, we've been in a very comfortable position and actually sitting with a pretty strong balance sheet. Yes, this has certainly been enabled by the babies divestment that we did back in 2019. Now moving into the middle of the chart and building also on the point that Christoph made in in introduction, in profitability, in particular, we had a pretty long period where we clearly only delivered, and we're on the very low end of what we had expected to see. We know the reasons for it. And there's not a very big surprise that one of the really big items have been when we are starting up our new flagship machine in and the impact that has on our financials. That logic in terms of profitability deterioration flows very nicely and logically into the return of capital employed, and you see a very similar pattern. And in essence, we've added quite a lot of new investment and CapEx into our balance sheet, and we're still working to get the full value out of those investments. Now there is an however, and there's some good news. And you hopefully also can see that on the last bar on the chart in particular in the middle that we are now starting to see really good evidence that our profitability transformation is underway, and it's working. And yes, it is true, that have been helped by very good market condition and market tailwind for most of 2021. But I would definitely claim that we also have a large part of that because we've done extremely well on some of the internal priorities that we set for ourself. And I'll come back to that in a second just to give a little bit more flavor on the progress there. Round it up in terms of our fifth and last target that we pursue in terms of our dividend. And in essence, you can say that despite the profitability level falling and despite having a higher CapEx outflow over the period, we maintained the dividend flat in terms of SEK per share at SEK 430. And that has meant that for some periods, we moved up higher into the percentage of net profit, as you can see illustrated on the chart, but it also meant that we've been able to offer good returns for investors and on average, a yield between 3% to 4% per year. Now then I want to go back to the point I just made a minute ago in terms of what kind of progress have you made on some of the priorities that we mobilized and routed around the organization some years ago. And I know there's one particular piece that I think 98% in this room are just waiting to see. And that is what's happening in. And I think this chart actually illustrates a lot of the journey that we've been through, in essence, also illustrating the really good progress that they may make. And if you just think a little bit about what's happened since we started that machine before the summer of 2019. Yes, the first quarter, we had more trouble than we anticipated. And yes, the negative impact that we had to flush through our financial were pretty sizable. But from then, and I think this is illustrating in the chart, I don't know how easy it is to see the chart. But you're basically looking at the monthly output from the KM7 machine, split between coated versus on materials. And let's not kid ourselves the real value and some of the true potential is found in the coated materials. This is where some of the attractive position that we really want to pursue. And you can see the momentum we've been carrying up. And now we reached also a state where we are 60% of the mix is coming from coated materials. We are in a position now to produce pretty much any material type that this machine was designed and configured to produce. We have achieved a milestone also illustrating some of the bubbles on the chart ahead of business case and very, very good specification, result and feedback from both customers and the printers, et cetera. So excellent progress on KM7. But I just wanted to allude a little bit to the point that Tor made in his part that if you want to understand the value and the potential of what's going on, it's not only about just what volume are getting out. The mix piece is extremely important. And putting those into a combination will give you a real flavor of how we have been able to succeed. So great news on KM7, quarter-by-quarter, great progress, and it's more to come. I want to move into another part, and that is our ability and how we have performed on our cost and efficiency program. So this was a program that we launched in the fall of 2019. And quarter-by-quarter, we've pretty much been able to deliver on what we have said and actually for the last year, been able to accelerated it ahead of time. We have raised the ambition already once from SEK 600 million to SEK 650 million. And we going to raise the ambition yet again, slightly stretching the time horizon we're looking for, but we are now going after a combined SEK 750 million with all of the building blocks in place by the end of 2022. And as a reminder, this program was designed to go after what we call structural savings in all of our cost buckets and in particular in fixed cost and variable cost, we can draw the line between those. And when the program is close to completion, we expect to see roughly 2/3 of the benefit landing in the variable cost and roughly 1/3 of that coming into fixed cost. It's also natural to assume that in about a year's time, we will come back with more information talking about how we're now planning to drive a cost agenda and how we're going to drive the whole cost to the next level, yes, when we come to second half of '22. Moving on, and you already got a glimpse of this some minutes ago. Our balance sheet is strong, and it keeps getting stronger. Quarter-by-quarter, we bringing the net debt down and the leverage ratio improves. You can see that illustrated with 2 of the green bubbles on the chart, we are below of what we had set aside. And it's very much helped by an excellent operating cash flow delivery during 2021. The CapEx going forward, I think you already heard Tor explaining why we do raise that guidance now to SEK 1.5 billion to SEK 1.7 billion over the coming years and are we going to use it for. And there's no new guidance on the recovery boiler versus what was said in our Q3 report. We expect that to be completed in the beginning of 2024. That should leave us with ample room on our balance sheet to pursue any opportunity that comes our way to kind of fuel the growth momentum going forward. Right. Let's move into the part around financial targets. And in essence, you can see that the targets are kept relatively unchanged. The reason why we reached that conclusion is that we believe that they're actually still very relevant. Relevant for we want to do and also in terms of reflecting in a pretty good manner, ambition level that we set for yourself. Starting to the left, the net sales of 3% to 4%. You heard Matt what the spends are in terms of product, in terms of region. And you also heard some of the points from Tor on how we're planning to enable that from an operational point of view. The profitability piece is kept at above 17%. And I want to stress the last point because it is above 17%. And we've had a long period of time of clear on the delivery and now we have great momentum. In Q3 now in '21, we delivered 17% EBITDA, first time in years. Now we want to establish ourselves and keep that consistency and then we're going to build from there. The last 2 boxes on the chart, and you can probably even argue that more in terms of the policy, in terms of our net debt leverage and also on dividend. We keep them relatively unchanged versus what we have today. The reason is simple because we believe it reflects in a good manner the risk profile that we're willing to take as a company and also our ability to offer an attractive return for our shareholders. You can see the fifth box, which is not on the screen, which we have previously talked about is return on capital. And we've taken the decision for the time being to suspend that target because literally, we don't find it relevant for the time being. We're still getting out a lot of the value potential of the heavy investment rounds we've done, and this will take time. And naturally, we will assess from time to time if we feel that the time is right to put that back. But this is now, for the time being, the 4 targets you see on the screen that we will be pursuing and ourselves on. Continue a little bit and just to give you a bit of a visual road map of the journey we have in front of us. We're going to start talking about the net sales on this piece. This is not necessarily a forecast. It's illustrating the building blocks we have in front of us over the coming 4 years to deliver the growth rate I just showed you on the screen. And the relative size of those building blocks, yes, in a pretty good manner illustrates the size or the relative size of what we expect those points to have in our pursue growth. And there is no doubt that volume and the right mix will be the core components. And we will still continue to keep a very close eye on price management and certainly have that very, very tight on to the radar. Last arrow indicates that, yes, there will come a point of time. We will say that we are getting close to the absolute maximum what we can get out, and we will need to find further capacity to fuel our growth, keep the momentum up, through an expansion of our existing sites and/or M&A. And I can just translate that same logic into the profitabilities. So looking at some of the same building blocks that I just showed you net sales, they're highly relevant also for what we expect on the profitability piece. And there's a couple of pieces I just wanted to what we've added and I just want to comment on. We do expect -- you just heard Marty going through her priorities of certain efficiencies and more benefits coming from the wood supply organization. The last piece I want to explain because it's not necessarily 100% intuitive. We do expect over time to hit by inflation in several pockets of P&L. With continuous focus and delivery on our cost program, we believe it can reduce that impact pretty significantly. So it's a very big tool for us to still keep inflation under control. We succeed with few and these good building blocks, we have a very good view and very good confidence in our ability to deliver on the targets that we just showed some slides ago. So with that, I just would like to invite my colleagues back on to the stage, and I'm going to hand it over to Christoph to facilitate, which is hopefully a very good and productive Q&A session. Thank you.

Thank you, Ivar. I suggest you just stand up and do a leg stretch, and we will start in 2 minutes while everybody gets on the scene. And we start the Q&A immediately after that. Stand here, I cannot see you properly actually. All right. Good. So I suggest we do Q&A. So the question at me and then I would turn around and find someone who can answer them. So that's the deal. We have also people online. I think we're going and ask question, we as a computer and Lena will bring them up. But maybe I start with the first question in room. Any one of you would like to ask a question, and then we move to the online and play ping-pong back and forth. Please. And maybe -- because I don't have a piece of paper, we limited by one question at the time, and we can make many rounds. So that it's easier to get the right answer for the question. All right.

My name is Linus larsson, and I'm here representing SEB. And thank you very much, BillerudKorsnäs, for inviting us for physical interaction this way, very nice and very informative so far. I have one question split into 2, if that's okay?

Linus, I knew it. I knew it.

And it's the old analyst tactics and it's relating to growth but interlinked with wood supply. And I think it's -- what you're talking about in that context is extremely relevant and interesting. But I'm also curious and maybe starting with Tor in your presentation. I'm curious about what you did not talk about when you talk about your various mills? You did not mention Carlsberg. That makes me very curious about Carlsberg, of course. And if you could just say a couple of words how that fits in? Because there, you have a reasonably big pop operation a rather small paper operation integrated. You have, if I'm not mistaken, a recovery volume from maybe early 1980s and replacement coming up in the not-too-distant future. And in various ways, it may seem a bit peripheral. Do you agree with that? And what's the future of Carlsberg? To me, it looks like a bit of an up and out -- up or out situation? And the second part of this...

Why don't you stop there and let Tor answer and then I come back to you. Tor, please.

Yes, Thank you for the question. I did not mention Pietari either in my presentation because it was connected to board growth. So that's why I primarily talked about the board mills. But both Carlsberg and are important pieces of our second craft puzzle. We have 4 of those machines. And like the board machine, piano, we also play that piano in concert, if you will. So cost per Pietari, Gruvön and are interconnected in that respect. We optimize the system as such. So Carlsberg and are core assets, and we will continue to maintain them, continue to keep them competitive. And as Matt talked about, what we want to do there is find innovations to boost the value rather than the volume.

Great.

Go ahead. Now...

Christoph, make an attempt to make the second part of my question somewhat shorter. And maybe then towards Anna-Maria. When you talk about building long-term supply agreements, and I understand that is absolutely crucial for any growth in this industry or to maintain the volumes that you have for that matter. But would that potentially include transactions where you would invite your wood suppliers to become owners of your company or part of your company? And I'm thinking about something along the lines of what Board did at Husum where the local wood supplier became a minority owner of their pulp mill, not the board mill, but the part meat in Husum?

Thank you for the question. Of course, you are quite right. I'm happy that I conveyed the message that indeed our strategy is to build partnerships in order to secure the wood supply, but as well to work on the cost and efficiency and -- because we feel that we are actually able to offer and be a really nice partner suitable like-minded suppliers, like I would say. But this kind of partnership, it can always entail different levels and different types of collaborations. And of course, if there would be an opportunity, if a window open for this kind of, I think, what you are describing, we would, of course, evaluate and consider it. So yes, so this -- yes, that is my answer.

Thank you. Maybe, Lena do you have a question online before I turn around to the audience here?

Yes. We have got a question from Robin Santavirta at Carnegie. Expansion in North America sounds like an interesting opportunity. How will you do that? Will you produce paperboards in Sweden and export to North America? Or are you looking for M&A or organic investments in North America? And a follow-up to that is how big...

We do the follow-up in a second. Maybe I turn to you to and you, Matt, to take that question on, and we start with you, Matt.

I've got to stand out. I can't sit down too long. At the moment, we're describing an organic story. We've already started our journey. You can see I think in my presentation, if you can remember it, a very small part of our business to date, the Americas and an even smaller part today is actually in North America, but we do have established routes to get our products made from our 4 board meals into North America. Of course, then what we need to do is to continue to build out our organization as we continue to grow that customer service, it will be sales. We need to put in place the right infrastructure. But yes, the plan is we can get our product across the water and what we hear from our customers is the value proposition we're giving them when we're already doing that today, they are very appreciative towards.

Tor, do you want to expand a bit how we will operate and run the supply chain?

Yes, of course. And just adding on to Matt, we are already now building knowledge and experience and how to get our supply chain over from -- mostly Frövi at this point over to North America. But of course, if there opens up an opportunity to be on the ground there, as I said in my presentation, we are open for M&A possibilities when they open up and are interesting for us, either in our segments and in interesting geographies like North America and also for conversion possibilities there.

All right. So follow-up?

The follow-up was how big do you expect North America to become for you in 5 years?

I think that is something for you.

May be that big. That was -- I talked to me in low before. I think the opportunity as we see it, I come back, this is a big opportunity long term. The market in North America for cartonboard 6 million tons; for containerboard, it's about the same. So there's a huge opportunity here. And I maintain that we've got very attractive value proposition to go and exploit that market opportunity. And I explained to us, why people are actually trying to want to do business with us as well. So I come back, huge markets, 6 million tons for containerboard, 6 million tons for cartonboard, and we think we can go and take our fair share.

Okay. Please.

Johannes Grunselius, Kepler Cheuvreux. Thanks for the CMD, first of all. I have a question on the market growth rate you are referring to in the presentation and in your discussions, like liquid packaging board, for example, 1% to 2%. And I can see containerboard is a 2% -- primary containerboard about 2% market growth rate. Isn't those quite modest growth rates? I'm just thinking about all the pledges brand owners have committed themselves over the last years. You have talked about these growth rates, I guess, for a few years. Are these very moderate? Or do you still believe in those growth rates? That's my question.

Okay. Matt, do you want to take that?

I can try. I mean this is our best assessment as we have today. We're working with a large number of external inputs, as I guess most other companies are, and then we make our own judgment based on those inputs as well. Are they conservative? I would say is realistic as we see them as they are today. That's the best answer I can give.

And I think I may add to it. I mean clearly, if you cut paper or cartonboard in different segments and subsegments, et cetera, there are clearly those which are growing faster and some which are growing slower. So this is just a real big average. And I think what we wanted to portray to you today is it's 6 million tons. So there's 1.25 million tons, which we see to the end of 2030. And on top of that, within that, we want to play in the premium segments, which probably should grow a little bit faster than the average.

Maybe I can just continue on the same question. Do you see any signs of like, let's say, increased market growth because of plastic substitution, e-commerce taking market share and these things? Or is it still too early to say?

Let me talk a little bit about that. I think everybody in this company, BillerudKorsnäs, is super excited by the opportunity to replace plastic. And I think a lot of consumers would agree with us, a lot of brand owners do as well. However, plastic is an excellent packaging material for what it does, okay? And I think a lot of brand owners, while they want to push towards paper, there will always judge still does their product arrive at the right quality and the right spec, so to say, at the consumer. And therefore, I think paper has clearly opportunity to go there where we fulfill the product need. Don't forget that. Nobody will take our wonderful idea of Paboco and put something in it and then it doesn't work, okay? So we have to prove with our material that we can be a reliable, cost-effective and quality substitution to plastic, okay? So I think everybody talks about it. I think there will be a shift. I think Mikael is challenged by a lot of technical issues. Clearly, today, brand owners have big packaging machines. They have a machine park installed for FloWrap, for example. And we cannot just say, here's a piece of paper. It works as well, but you have to change your total asset base in order to pack your products. So we have to be realistic. But what I see in the market is that overproportionally the solutions to replace plastic are with us in primary fiber, and especially when it comes to food products, food safety, purity, quality and things like that. And on top of that, that is why we bet on barriers and in particular, also on paper barriers because it's our paper volumes, in particular, which are very good suited for this type of plastic reinplacement. But I'm not standing here and say, plastic will be dead within 5 years. I'm not, okay? Plastic is a very good packaging material, which lots of environmental and sustainability issues. And I hope, to some extent, they will be solved like recycling and things like that. But there are many applications where paper has no disadvantage whatever, and we will go into these niches. And that is why we like to talk to you about these big, profitable niches and primary fibers. Because if you compare to the world market on 420 million tons, it is a niche. It's only 76 million tons. And yes, we will be one of the will take over business from plastic.

All right. Lena?

Yes, a question from Oskar Lindstrom of Danske Bank. What will happen with your solutions business?

Okay. Let me take that. Solutions, we have a number of business what I think a widely called solution in fact. We have managed packaging, we have venture. We have a solution business and mats business, and they all have slightly different meanings. So managed packaging is a service business where we basically develop a packaging for brand owners, and we qualify the suppliers, and we help them to to really have a fantastic sourcing strategy for this type of packaging. We have ventures, which was basically a number of businesses that were acquired over time from a very small, like venture capitalist approach and say we saw interesting insights in that business, and we wanted to participate. And then we have mats business in solution, which is basically talking directly to brand owners and developing solutions for them, which then would use our material at their chosen converters in order to create a product, okay? So as I said, focus is we'll do the magic to deliver growth and profitability, okay, undoubtedly. BillerudKorsnäs is basically a fantastic material -- packaging material supplier based on primary fibers, and that where the focus is. So what we will do now over the next months and 6 months, a year, we will review what are the synergies and what are the leverage we can get out of the smaller business that we have on the site, which are relatively marginal. And how can that enhance mats and and marries and basically our combined core to make it fly faster. And if we come into a solution that this is a great idea and there is great leverage or synergy, we will keep them. And for those businesses that we don't feel that don't fit in our stable, we will find different solutions. In the room Or is there a follow-up question from Oskar?

No, no. Not from --

Good. Questions in the room? Or we hand back to Lena. You seem to be busy, Lena. Okay. Go over it.

So we have also had a Finland and Nordea on the line. He would be interested in hearing more about our vision to -- on how to address the Americas market opportunity in FBB? If we choose to increase FBB capacity in Americas, would the initial investment cost include a fiber line? Two Too, what hurdle rates or investment criteria would be applied?

Ivar, do you want to take that?

Me? I'm the lucky one. But I think it's just almost a repetition of what Matt and already said that the ambition has been laid out, and we're looking for option along the way. But I think for the next years, we are good. I think that's at least unless you want to build on that.

I will sell it. This will make it. We may do clear.

That's right. Okay. Anyone in the room? Guys you must have told such a convincing story that's a 0 question. I can't believe it. Do you have one?

Yes. Martin Melbye at ABG, Sundal Korea. You talk about profitable revenue growth to 2030, but without specifying a potential level, can you indicate sales in 2030, please? We know that 3% to 4% sales growth target, but CapEx is also needed to deliver this.

While you take 3% to 4%, you multiply that over 10 years, and that is approximately where we will end up. And I hope really that in a few years, I will stand here and say, we have taken up that target as well because our success in the U.S. was so big and the same applies for profitability, as Ivar stated. Let's learn to walk. And let's go to the 17% EBITDA. And if we see that over cycle, we can do more, we will come back with a more ambitious target. I think it's important that we get to what we promised first and then we make new promises. Yes, please.

I'm just curious about why have you suspended your return on capital target? And I know that you addressed it in your presentation, but you have your margin targets, you have gearing, you've got payouts. So in theory, we should be able to figure that out what it's going to be. Is it because you have big CapEx plans or M&A? What's the situation?

I can take that. It's a good question. And you're right, we could still have kept it. And even if we said that for the next period, we can lower the target. So the rationale we did was to say that for the time being, we are so far from what we believe is a good competitive return on that matter. And it's not really the relevant point to now really focus on for the next year. We will still report it, and you will still find that in our different reports and as a matrix that we also internally have, but it's not one of our core 4 KPIs for the time being. And then we will do the assessment if we come further down the line to potentially reinstate that. That's the choice we've done.

And you can believe me, I will behind working capital. I think to even with the increased ideas of what we think we need to do. We will always ask the question that every CapEx we spend is either absolutely mission-critical or will deliver higher growth, better productivity, type of things in our thing. And I think in our production. I think what we should not forget, and I think there was some comments this morning by some of you who are following us. When we do these additional CapEx, it's the cheapest way for us to basically create more productivity and more output, okay? The CapEx as we are talking about is about modernizing our factories instead of just making sure they work, okay? And I see the opportunity when Tor talks about the OE or productivity improvement over the years, that is really where this is coming from. If you take something you don't see, you see things when they're really happening. You saw Gävle had an issue in June or in May, June, we had the problem with the water after the torrential rains in Gävle. But what you don't see are all the minimized little stop here and there, which are not planned. And that is what we have to go out of the system. And that is what Tor meant when you said preventive maintenance, but also new technology to monitor the machine so that we intervene and plan stop to do maintenance work before the machine breaks down. And that is, I think, for me, is a key driver of productivity increases, at least until 2025. And then we need to have new capacity coming from somewhere. All right? Lena? Or should I move first to you, Lena? Lena, do you mind? We take Lena first and then we move back to you.

Okay. Then a question about innovation from Robin Santavirta. So regarding innovation in paperboard where do you find the largest potential? Is it lightweighting? Is it plastic free coatings, printability Or is it something else?

I think in terms of paperboard, it can be both actually. Lightweighting is probably a very interesting area going forward. And we also think that barriers can feel place also in paper was, I would say both of them are really important and relevant for us.

Yes.

Thank you. I'd be curious maybe if you could describe a bit in relation to financial targets and performance, how the management team is going to be incentivized?

Okay. So look, we are a good Swedish company. We pay base salaries. We have basically our bonuses. We have long-term incentive Currently, the long-term incentive is about earnings per share, which runs over 3 years and basically renew itself every year. We have short-term incentives, which are about 12 months. And I can tell you one thing in my team, you just don't listen now, people leave because they don't like their boss. It's not the money. The money must be right and correct and really good, but they would leave because of me or because they find a fantastic opportunity. And therefore, I think we, as a team, we really will work hard on 2 things: a, that we are a great team and that we have this ambition to deliver this strategy. And I always things that you need to create a vision and then you let the team coinvent. And this is our strategy. This is not my strategy, okay? If Tor doesn't believe in it will never happen anyway, okay? So all of us are super engaged in this. All of us we want to make this happen. And all of us even more have the responsibility to make sure that our talents and great people we have in the company, also excited by this to deliver and to stay with us, okay? So one of the things I haven't addressed, which we maybe should have addressed in more detail is winning with people, which is a program that Lena has developed. We have -- this is probably the only consistent strategy in BillerudKorsnäs since you joined. And there are 2 particular aspects that we have broken out. One is succession planning and talent management because we need -- I want to have all of you to develop the talent who will take my job, your job and the level below, et cetera. And the second part is, we need to make sure that we create a new generation of skilled people coming in and running through the company. I think when you look here, you could say, well, there are lots of new faces and new people coming to BillerudKorsnäs. And my view is it's very hard if you bring too much DNA -- new DNA into the company too quickly, okay? You need to grow from within and ideally replace in your succession planning by the people within and they are better than what you can find in the market. Sometimes it doesn't work because you need experts or fields you don't normally deal with, or sometimes your pipeline runs a little bit dryer, and then you go outside and bring them in. But ideally, you want, I don't know, 20% of new people against 80% of the thing and bring them in, otherwise, you create a culture which is difficult to manage.

Maybe if you allow me, Christoph, just one last comment that on the short-term incentive program or basically the yearly bonus you can refer to. It typically is somewhere between 2 to 4 KPIs. They could change year-on-year. We have a discussion with the Board in terms of what was the right level and they are. And I don't think I said too much that what we now presented on driving net sales and profitability going forward will be instrumental part on that. I think that's pretty much what I just will have?

Thank you. Lena, please?

Yes. Mikael Doepel at UBS. He writes like this. Given the need to develop new products, would it make sense for you to integrate downstream to converting operations, which would bring you closer to brand owners compared to mainly supply and converters as you do today?

Let me take that. Look, I worked in a converting business and it's a tough business, okay? And yes, in certain circumstances, that would make sense, like other people believe it makes sense to own a forest in order to have a paper mill, okay? I think -- what I like for BillerudKorsnäs is the independence to pursue the market opportunities that we see because we are not changed to a forest or change to downstream converting business. I think the brand owners should always be free to choose the converters they need, okay? It's either in regions, in countries and things like that. And I don't want to be limited by that. We can ship our paper easily across geographies as we just alluded about the U.S. And the second part is, I think with sourcing strategy, we will open new opportunity to source fiber and even if you look at BillerudKorsnäs or something which is based on both directions and integration, it was only 10% of our business, okay -- of our supply needs, okay? So I think being a partner honest partner to the downstream and honest partner to the upstreet is a very, very good position to be in order to drive a business which really looks at the market and is not limited then to move one way or the other. Now a lot of skeptical people looking at me. Do you have any questions? Please.

Maybe I can take another one then. How should we interpret the net debt to leverage target that you basically reiterate now? I mean at least in my numbers, you have the strongest net debt-to-EBITDA in 6, 7 years or something like that. Are you happy to stick with a very strong balance sheet? Or how should we sort of view this target?

So typically, when we get the question around capital allocation, we typically would say, well, that's a Board decision. And that's not something that we per se have. So I mean we have our Chairman here now. And I know I'm putting a little bit on the spot, but maybe if he wants maybe to say awarded about capital allocation, would you take it, Jan? Do you have a microphone to give to you, please?

Well, a little bit caught on that one. But of course, I mean, you should see these -- all these targets over time. So -- and it wouldn't be wise to stretch those targets too much. We also know that a few years down the line, if everything goes as the team has explained, we will need capacity somewhere somehow. And then to change the target just because at the moment, it looks rather good. I see no point in that. I think the target is a measure of our risk willingness as it looks today.

Thank you, Jan. Thank you.

Thank you.

Lena?

Yes, we have a couple of questions about capacity expansion. So if I take the first one from Robin Santavirta. You talked about measures to grow capacity after 2025. Does that mean that you plan no meaningful capacity expansion before that other than capacity creep and improved efficiency?

Tor, do you want to go for that?

I will go for that. And thanks for that question. This is what I tried to explain in my presentation that we think that short term, we do have quite good leverage within our current footprint for efficiency improvement, product mix improvement, which will also boost capacity. And as I said, we're looking at bottleneck investments with a little bit of higher capital usage, all these things will bring us more capacity over this period. So it's not that we are not going to expand. We are. But then what we think is that after this period is gone, we sort of have filled up our system and got to a little bit of more of a stretch than we are today. So then we would have to do bigger things at the mills or with M&A activities.

Very good. In the room? Lena?

Yes, on the same topic then, capacity expansion. We have scale in Oskar Lindstorm from DaskaBank. And he says -- he writes that you say that you have enough capacity for the 3% to 4% annual sales growth until 2025. But after that -- or by '24, '25. But then you will need more capacity, and you're open to both greenfield, brownfield and acquisitions. So he ask 2 questions then. The first one, you must have some idea about the main options and what your preferences are, which are they? And the second question, could you please talk about this as well as what type of assets you would consider acquiring?

Okay. Do you want to take that?

Yes, I can at least start.

Yes.

So the building blocks that I showed on the slide, the possibilities we have in Gävle, the Frövi board machine, the board machine in Gävle and the fluting machine in Gruvön and also the expansion possibilities which would support the board mills really with pulp. All of those are quite big chunks in themselves, and they compete with each other. So since they are not completely investigated, we don't really know yet what type of CapEx levels each of them have, but we will after all these assessments have been done. And then we will, of course, pick the ones that suits us best. Same thing goes for anything that we would do outside of the company. Also that if an opportunity arises, that will also compete with these buildings that we have internally. So we will choose which one we will do and in what order based on really the fundamentals of CapEx woood supply, what type of product we need and so forth. So I think that we have a good outlay of opportunities there that we can choose from.

And I think there is also another perspective here, as I mentioned before, I think after this month of debating where we should go and where should we prioritize growth. And is it cartonboard? Is it second craft and things like that, where the opportunity? I think for me, it's much easier today because we have said it is cartonboard and containerboard. It's liquid packaging board. And the focus of volume expansion is there. While in second kraft, it's more about sophisticated products, innovation, very specialty papers and things like that. And that took away, at least when I arrived, like a little bit is, okay, we need to do this. We need to do that. But how do I prioritize and how do I actually we set the tone, okay? And having done this now, I think, yes, we have an organic opportunity. Yes, we will acquire something if we find the right opportunity in the right market with the right wood supply. And therefore, we have many options. And I think today, it's maybe not us acute, okay, in terms of capacity need. But in the future, there is no preference, so to say, in itself. All right. Good. We have maybe time for 1 or 2 more questions, and then -- you have -- how many do you have?

2.

2?

Yes.

Perfect. Okay. Okay.

So Mikael Doepell at UBS is coming back to the question about capital returns. What minimum returns do you require for any upcoming investments? Or is the focus more on the strategic growth opportunities and future investment could bring?

I can only say from my side, and I'm hopeful you can also build on that, Christoph, it's the latter. And obviously, when we do any financial assessment, we will analyze that from different angles and parameters. Obviously, this is one of them. There's nothing I would say here that we have a specific number that I would go out with but we will analyze this to make sure that this is a good investment for us. It's a good shareholder return. And yes, use different KPIs on that. I don't know if you want to add anything on that?

Look, in my mind, I mean, you're correct, Ivar. But in my mind, it's very simple. The return hurdle rate for safety investment is nearly 0, okay? It's too important. So return hurdle rate to fix something and the mill will be down is also pretty low because if the mill stops, we have a problem, okay? And then all the other additional investment when it comes to automization show me the return. When it comes to modernization, show me the return. When it comes to new capacity, show me the return. Clearly, they're above of what the average of the company is and very significantly above if there's higher risk, okay? So we do that exactly like most companies would do it, except for the safety one, where we are absolutely clear, we will invest in the health and safety of our people. And that is, generally speaking, a smaller part because as Tor also alluded to, it's about a culture change.

Yes, a follow-up then from on capacity. Can you please give a rough estimate of how much capacity in ton per year that you believe you can add in the coming 3 to 4 years period in your existing assets?

Maybe I take that because I was educated by lots of people in this fantastic team. Tonnage is not always a relevant indicator because what we are selling is actually money, okay? So light weight paper can be incredibly low in tonnage and incredibly valuable in money. So that's one answer. The second answer is what we are looking for is to find the right mix of products and touch and customer mix. So we have customers who buy very expensive products from us, but also require us to do something which is maybe less profitable in itself, okay? So it's a mix. So I think the whole discussion how much tonnage we will deliver in the future et cetera, is only relevant when we talk about long-term capacity expansion, et cetera, to fuel the growth to have product to sell, okay? I think I would like to bring that discuss much more into the growth discussion, contribution discussion and EBITDA discussion at the end because that is really what matters. And that's mix, that's price and to some extent, volume. Good. Very good. All right, ladies and gentlemen, you nearly did it. I'm in between you and refreshment. And if you would like to leave the stage, I will just finish our session and go on. Can I just ask you what time is it so that we...

3:40.

3:40. Excellent I will not take 20 minutes. Don't worry. Good. Thank you. Thank you very much for all your questions. It's clearly for us, the most important of you go home and that you got what you needed and that you have a better insight in our company and a better insight to judge what you think we can do and not do. My view is always that clearly, a key component that is the team and the people. And you have met today a long -- a big part of them who will deliver that, and it's not just them, but it's also their teams. And I think to finalize and to conclude, I just want to reiterate clearly what we are trying to do. First, we try to reach our targets. And once we have reached them or we're close to them, then we will become more ambitious. Second thing is in commercial, it's clearly the board area where we're going for growth. In terms of region, Europe is our powerhouse and the U.S. is the fantastic opportunity on North America as such. We will pursue liquid packaging board with select opportunities, and there are many around those. And we will try to innovate and create great added value in second kraft, but we will not obligatory will not expand volumes per se. In operation, we have moved to increase capacity. KM7 is clearly not full in its opportunity yet. We have all the other board mills in Gävle and Frövi, we see opportunities for growth. And then it comes 2025 or later, we will now start to work on what is the next step in order that we are ready by '25, '26 once we need new capacity when it is. Wood supply. Very clearly optimization of the fiber use partnership, very professional management on the whole supply chain of wood supply, and it's really about sourcing and it's not about forestry. Sustainability, if you've heard Matt, it's really all in the product and what the brand owners need for their customers and their consumers at the end. For tour, it's clearly managing our scientific targets, which we have clear ways how to get there. They all costed out and they are part of our base CapEx we are talking about. And then there's this unknown opportunity, but very clearly important how do we use the CO2, which is the bionic CO2 in order to reduce it actually as a net level rather than just let the trees grow and absorb it again. When it comes to wood supply, what is the solution for fossil-free initially? And then again, how can we improve our sustainable or our environmental impact there? And all these things together, I think you will see we will remain one of the best companies when it comes to sustainability in our industry. Winning with people, we mentioned it. I have one slide here. I will not go through it. It's in your deck. It's basically what we talked about skills to meet the challenge and it's about the talent so that we have a pipeline for the future. And finally, I would like to show you, also, I will not talk much about it in your deck. It's really about how do we get the integration finally done so that when Matt orders something, it flows automatically to Tor who can schedule automatically towards supply who will deliver the fiber and that we have basically a very modern integrated business model that is efficient and fast and transparent. So what I would like you to take away from today? I think the first one, as I said, and all in the beginning is I think we are the sweet spot of market trends, product mix, and an innovation program that can really enhance and leverage our capability. We need to maximize our capacity and utilize it at the lowest possible cost, okay? It will be a journey, but I think we will get there. Build fiber sourcing excellence with deep knowledge of forestry is clearly one of the key points. Sustainability has an opportunity across the business, customers, operations and wood supply and future capacity expansion in own facilities and/or M&A, whatever the right optimized supply chain has to deliver. And finally, people is the only thing which really matters in all businesses, I guess, and their talent and drive are critical for this success. So I would like to thank you for your attention for the whole afternoon. I'm so happy to see you in 3D, and I'm very sorry for those behind their screens, not to be able to be with us today. But thank you very much. I would like to invite you for a few refreshments if you have the time and the opportunity to meet you in person. And for all of those online, I wish you an excellent afternoon evening. And please, if you have any questions or additional comments you would like to make, if you could contact Lena or Ivar and will give you that information. Thank you very much. Thank you.