Norske Skog ASA (NSKOG) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Norske Skog's Second Capital Markets Day since our reintroduction to the Oslo Stock Exchange in October 2019. Very happy to see so many faces here today in the audience and also hopefully, online. My name is Even Lund, I'm the Investor Relations Manager in Norske Skog. I will not be talking for too much today, but I thought I would perhaps say a few words about what's happened since we were in this room 2 years ago at our last CMD in 2021. Our enterprise value is more or less the same, but we have come a long way with our strategic transition. We've invested a little more than NOK 4 billion since 2021 -- since the CMD in 2021. We have a little more to go, about NOK 1.2 billion before we have completed the final containerboard conversion we have announced so far at least in Golbey, the conversion of PM1. PM1 was originally built in the early '90s. It actually entered the market in the early '90s when it was a really, really weak newsprint market. So it started off actually not earning any significant cash flows for the first 2 or 3 years. But since then, it's been an amazing newsprint machine for us, earning significant cash flow and we hope it will continue to do so for several decades when we have completed this conversion. This is our portfolio when we were here 2 years ago, we had 1.4 million tonnes of newsprint capacity, 400,000 tonnes of SC magazine paper capacity, and 400,000 tonnes of LWC magazine paper capacity. Now after the conversions, which will be completed in the second half of next year, we'll have around 1 million tonnes of newsprint, 200,000 tonnes of SC magazine paper. This, of course, excludes the Saugbrugs PM6 machine, which is temporarily idled, 400,000 tonnes of LWC magazine paper and 800,000 tonnes -- or 760,000 tonnes to be exact of containerboard capacity. So it will be a dramatic shift in our portfolio, and we will have approximately 1/3 of our production capacity in a growing market. And we have been through huge upcycle in the publication paper market. As you can see our last 12 months financials are quite a bit better now than what they were 2 years ago, and we are in a cyclical business. It goes up and down, but we think we have competitive assets that will continue to earn us strong cash flows for the years ahead. So here's the agenda for today. First off, Geir Drangsland, our CEO, will give a few words on the fiber processing industry and Norske Skog as a whole. Then we have invited almost all of our mill directors, not everyone were able to come, but most of them were here today to present the industrial sites, the core of our business, our 5 industrial sites. Then we'll have a small break with a snack and some Q&A, if you have any questions, 15 minutes. We'll go into the markets, we'll present both the publication paper market, the packaging paper market and our raw material markets, energy and fiber. Then Rune will give a few words on the financial position and the financial development in the company before we close out with a few concluding remarks from Geir and a Q&A session after that. So hopefully, this will be a good and insightful teach-in for everyone in the audience. I'll now give the word to Geir Drangsland, he's our largest shareholder, our CEO, and has 25 years of experience from the fiber processing industry.

Thank you, Even. Good morning, all of you. Very nice to see you. It's a lot of familiar faces here, a lot of clever people, analysts. Probably some of them know almost more about the company than we do, and a lot of people here who has invested a lot of money in the company. So we are happy here to share with you not only information but also that we could have arena for a physical meeting and not everything should be on a digital arena. And I'm very proud to be the CEO of Norske Skog. I have followed the company for some years, but I've only been the CEO for nearly 3 months. So I'm accumulating knowledge all the time to achieve knowledge to be a good decision maker. And I'm very proud to introduce you to some of the clever people that we have in the organization, both mill directors and also some of the key executive from the head office. Norway, we are a part of a region in Scandinavia, which have one of the best sources of fiber wood. Norske Skog is one of the key players in the Nordic region and the biggest refiner of fiber in Norway. And we also have, of course, operations elsewhere in Europe and in the world, so that's the DNA of the company to refine fiber. And there are 2 main sources to do that the end products to consumers, is the energy supply and it's the fiber. And we add things to get excellent quality through the process. So the sourcing, we have long-term competitive green electricity contracts, it's very valuable for us. We have internal heat production through biomass and waste-to-energy boilers. We have evenly balanced exposure to recycled paper and fresh fiber. Focus on short in- and out-bound transportation and efficient logistics, large industrial sites and paper machineries yielding fixed cost efficiency. That's, in a way, the platform for resisting. So how is it going with the company regarding the profit and loss accounts and the balance sheet. And as you can see here, in a time line for 2015 until now, last 12 months, revenues are fluctuating. And you here see a proof of the price fluctuations through '21, through '20 and up from NOK 10 million, up to NOK 15 million in '22. It's not because volume, it's because prices accelerated. Now prices are dropping and you see the correlation here from what's left in the EBITDA. Here, it's the price. It's very sensitive when we achieve prices, its impact is enormous on the P&L. But net cash earnings also from operation after subtracting maintenance investments, it's always making money, which is a good sign and strength and the healthy sign for the company. Net debt been for some years, very low compared to equity base and the total assets we disposal. Now it's increasing due to more than NOK 4 billion invested last 2 years in conversions to containerboard. Here, we have made some deduction, even for compensation from the insurance company for the landslide in Saugbrugs so that, in a way, release some of the debt amount in the balance sheet. So this is a map where we are having operations. In Norway, we have 2 plants, it's Skogn. They have 3 machines running for producing newsprint. Very, very good machines. It's a very favorable site, very good site, very clever people, very experienced. They have also on the logistics side, [ Long ASX ], the main road crossing almost all of the country for inbound and outbound logistics. They have deep sea harbor for transporting to the customers far, farther away. They have a regime for energy supply, which is very favorable. And the profitability of Skogn is very, very good. So we know about the decline of demand for newsprint, but still on the mill gate cash cost, it's a world-class within its segment. And we have Saugbrugs in Halden, where there are 3 machines, only producing SC supercalendered paper for publication paper. There was this land slide where the biggest machine producing 260,000 tonnes is for temporarily not producing, of course, due to the damage. So we have the #4 machine, which always has been going, still producing approximately 100,000 tonnes, but we are starting up in machine #5. Per Ivar Berg, the Mill director, he will go deeper into it. So we will, in short term, produce -- have an output of approximately 200,000 tonnes, and we have been very well treated by, If, the insurance company, and we have achieved NOK 2.4 billion in compensation for the damage. That's the component. They do the payments for insurance of reestablished buildings and taking care of the landslide, the materials, and we get cash compensation for the machinery and we get the cash compensation for interruptions for 18 months. So that's NOK 2.4 billion, which is making us able to -- and also, they have allow us to have optionality to reinvest in other things than SC, which also has a value, too. So now the company has focus in which direction and which kind of income streams should we create in Halden. They are very clever people, but I will come back to it. I think on energy savings, on reducing cellulose, using TMP instead, they are also world class. I don't think there are other producers in the world producing SC as cheap cash mill gate cost as Saugbrugs. Golbey in France, there are 2 machines. As Even said, in 1990, the first one was built. Until now, there has been 2 machines producing newsprint, the one has been stopped because had made a decision to rebuild one of them for containerboard. That is in progress. Also Yves is here, Mill Director for Golbey. And this is also where we have the highest output of paper. It's really AAA sites, also a very good energy supply, good premises for the downstream for the customers are to takeoff of the products. And we have Bruck in Austria. And also Enzo is here, who will inform a little deeper about that, where we have had 1 newsprint machine and 1 LWC publication paper machine, the LWC machine is running, but we are also there converted. There, we actually have come to the finishing line, and are producing LWC. So we are very proud and so I'm very happy with your management. He's done an excellent job almost within the limits of money that you were allowed to use to make it within the time line and also perhaps the most valuable thing of all. The feedback from customers regarding quality and on-time deliveries is very good, so this will be a good and profitable project, I promise you. So thank you for that. And also, we have a mill in Boyer with 2 machines. One of them is producing newsprint the other one LWC and they are approximately 30%, 40%, robots is for the domestic market and the rest is for serving customers, India, China and other the parts of Asia. This is to show you a little to visualize situation regarding investments. So you see the acceleration here for '22, '23, more than NOK 4 billion. So out of this total program NOK 5.4 billion, NOK 1.2 billion remaining. So the cash attack on the balance sheet is, in a way, we are almost -- we are getting towards the finishing line here as well. And still with this, we still have a very strong balance sheet with good cash positions after spending this. So it's the containerboard, very much of this. It's waste-to-energy to energy supply. It's Green Valley Energie in Golbey. We will come back to that, energy efficiency. And also in Saugbrugs, TMP, they are excluding recycled sourcing of the -- sourcing of the recycled raw material in Skogn and just using fresh fiber and it's standardized and lenifies the processes up there that will give value to us. We are sure of that. So there is also just to visualize the history for where paper newsprint that we see SC has been -- how it's been. Coming years, it will be more when we introduce income streams to you like this. Also here, to visualize a little for you. This is the new machine in Bruck, sensors factory in Bruck, started Q1 in '23. Spending is EUR 120 million, capacity, 210,000 tonnes of containerboard. Marleen is also here. She is in charge of sales for containerboard, and we also do some analysis for you, for how it's going there. Is this the improvement of the energy supply situation in Bruck started in second quarter '22. Net CapEx, EUR 72 million, 50 megawatts heat. It's made us more independent from gas and the fluctuation in the energy sector are making [ risk ] release for the mill gate cash cost for the products we produce in Bruck and it has improved the mill a lot. And there we see a picture on the ongoing containerboard transversion in Golbey. Starting second half '24, it should be -- net CapEx here is around EUR 300 million, and the capacity is 550,000 tonnes. So it's 2.5x the output. So it's large mill, large machine. And this is the energy supply in Golbey, which is very favorable. This is the biomass boiler JV starting second quarter '24. We have equity share EUR 5 million and capacity is 125 megawatts. So these are what's going on, which is, as the management focus from Norske Skog for the time being to get to the finish line here. And this is a picture of Saugbrugs in Halden. The rockslide on 27th of April, damaging buildings and machinery. No one physically harmed. And that was actually not obvious because in the area where the land slide came into actually the building, normally -- actually a lot of people there. So it's yes, really a reminder of what can happen. Excellent effort from person and other stakeholders to the mill following up a wide range of task after the rockslide. It's very focused here to clean up. And this is the settlement, some money we already have achieved. Some will be more in the near future. And these days, we collected as cash, and there will be a residual of NOK 0.6 billion when we start to rebuild equipment. And also, we have actually achieved -- Amund, the CEO, Amund Saxrud and I had the dialogue with If and we actually achieved acceptance to rebuild, been given optionality to rebuild just within the fiber, but this should not necessarily be an SC machine. And that's an important task for the management and the Board in company now to see how should we spend the money to the best for shareholders and our employees to collect income streams for the future. Yes, it's clever people down there. It's clever people in Saugbrugs. I think they have the lowest mill gate cost per tonne of SC. They had done a lot on the energy side to improve their consumption of energy. They have almost -- Even [Foreign Language].

They have taken away the need for kraft pulp.

Yes. And it's mechanical, which is savings. And they use filler in an efficient way, so it's a very -- and it's not obvious, it's because the management there are very focused on improvements. So I'm very happy about that very well. And we will stay loyal to the mill and make it profitable and for the future, I promise you. So this is just charts where are we and what's the game plan for the -- what we have done. The conversion in France is completed and not as today, where the utilization in Bruck, it takes time to get full utilization, even if we have completed the investment. And in France, it's still ongoing. It will take time until we actually achieve acceptable profit from that machine. But at the end, when we -- at the time in '25, we'll have all mills normalized running with stable speed. This is how the company will look like regarding what do Norske Skog do? What do they produce is 2.350 million tonnes. And this is the components per mill. I don't go into detail now. It's Norwegian. But you see when this conversion in France is done, this is really a AAA site, what we have in France. So that's what we are focusing on and not so much else. I don't focus on too many things at the time. I'd like to focus on a few things but do that focus with quality and see to that, it's done according to the plan. So yes I think next one is Enzo.

Do we have questions with this or...

I think we'll wait with quick Q&A before the break. So after the presentation from the mill directors, we will have a Q&A session. And thank you to you, Geir. Now I will present Enzo Zadra. He's the mill Director of Bruck. The mill that has completed transition both on the energy side but also on the conversion to containerboard. Enzo has been in the company since 2001, so he's a really experienced engineer and he has also been the mill director in Bruck since 2018. The word is yours, Enzo.

Thank you very much, Carsten. Can you hear me in the back? Okay. That's fine. Thank you. Good morning. I'm really proud to be here today and give you an update on our projects we have realized in Bruck, we call them the lighthouse project. And the mill itself -- sorry, I can do it. Okay. Thank you. No, I got it. The mill itself, you can see that in the picture, it's located in the green heart of Austria, in Central Europe. We have excellent road access and rail access as well. That's also important for the future to put more on to rail. And we are really very close to all of our customers. We are operating 2 paper machines, 1 for the production of containerboard, the other for the production of publication paper, and we are backed by our new waste-to-energy plant. We call it K9, boiler 9. And on top of the paper business, we are also creating financial value with the supply of balancing energy to stabilize the European power grid and to prevent blackout in the European Power Grid. The annual production capacity in Bruck is about 475,000 tonnes of paper. And there, we are talking about 210,000 tonnes of containerboard paper, and 265,000 tonnes of publication paper. And what this graph really shows is waste management plant, it helped really a lot to reduce our fossil CO2 emissions. And what happened, therefore, previous costs on CO2 transferred to an ETS revenue position in the Bruck mill. That's very important. And what you can see on the right graph is after the startup of PM3 in Q1, we are now ramping up delivery volumes on a quarterly basis. By the start-up of the new waste-to-energy facility, K9, we have also significantly reduced our gas consumption. These are the blue bars. So it came down. So we have been 1 of the biggest consumer of fossil gas in Austria. Now we are a small consumer and that's good. So it's a lot of biogenic in the energy now in Bruck. And what also happened then was the start of the containerboard production in Q2 this year, we are now increasing the share of recycling fibers in our baseline Bruck. What you can see on the third graph here, I call it a success story. That's really a very good story to tell. Already after the fifth month, after the start of PM3 containerboard, we have almost tripled the production. That's a very good development, this deep curve. And we've already reached our annual target for operating efficiency for containerboard production already after the fifth month. It was shown before, this picture shows our first lighthouse project. Our new waste-to-energy plant together with the fuel storage and the delivery of the RDF and sludge to the boiler. It was started in Q2 last year. Since the beginning of 2023, it's now fully utilized, and it was just taken over from Valmet a month ago. And this waste-to-energy facility delivers really highly competitive energy for the production of containerboard. That's really fantastic. This is a brand-new picture, [ maybe ] 6:00 in the morning. So our second lighthouse project, the brand new rebuild containerboard machine. What you cannot see on this picture is the fantastic stuff around this machine. So they are really ramping up the machine and trying to put a record every week, and they're really pushing up to create value. I have to say, I'm really proud and grateful for the trust placed in us. So I was asked, Enzo can you handle, too, such large project? I told you, yes, we will do. We can handle. In times of pandemic and also conflict in Ukraine, it was a challenge, I have to say. But it was a pleasure and really fantastic to see how motivated the whole project group, the whole project team, production, how dedicated and competent they were on the project. And I have to say they made the project fly. And this was also honored in Austrian politics. So the climate minister, also the Vice Prime Minister, they both joined during the opening ceremony and they told us you're part of the solution, you're part of the transformation to the EU Green Deal, and that was a very nice wording from politics and also very good support. And I have to say both projects, they are the perfect match to grow it well for the mill and, therefore, for Norske Skog. Thank you.

Thank you, Enzo. Thank you for the presentation. Now we will move to France. We will have a presentation from Yves Bailly. He has been a Mill Director at Golbey since 2006 and he has worked in Norske Skog since 1992, just 6 months after the start-up of PM1. And Golbey mill was built in the beginning of the '90s. So he has been there from the beginning and has extreme experience from pulp and paper production. And I would say that the mill is the state of the art in its class.

Thank you, Carsten. Good morning, everyone. I'm very happy to be here to explain a bit more what Norske Skog Golbey is. As said, I've started up in 1992. At that time, the market was extremely bad. We were -- I still remember, we were losing FRF 1 million per day. So now since it's been a very cash machine, a good cash machine, a good cash flow delivered by Golbey. And Golbey is a large industrial site, 70 hectares. It used to be the biggest production unit in Europe, in Western Europe, producing 600,000-tonne newsprint. So now you know we have stopped the PM1 in order to convert in the containerboard. This machine will start second half 2024. And we will be using only recovered fibers either for newsprint or for containerboard using old cartonboard. And the mill is very well located because we have to take into account also the logistic is one of the key indicators for the performance of the competitiveness of the mill. And we are very well located in terms of connection to the road, but also to the French railway. And we have also very good energy supplies, thanks to access to the historical nuclear energy in France, its nuclear power plant. And also a big contract we have signed 10 years ago called Exeltium when we get access to a very competitive price of energy for the 10 coming years. And we have here very good skilled people and operating a very -- operating for a long time this mill. And as you can see, again, the mill tomorrow will have a capacity -- I say tomorrow because as I said, we start converting machine in H2 next year, but we will have a capacity close to 900,000 tonnes. 2/3 of this volume will be for containerboard and the rest is newsprint. And even the PM2 is a world-class machine for newsprint. Even if the market is decreasing, the PM2 is one of the top machine of the world. And we used to say, Golbey is located in the center of Europe. I know it's not so easy to go to Golbey. But what I mean by that is with the radius of 800 kilometers, we reach the major cities, meaning the major consumers, which is key for the future because logistics is key for the future. You see we have a pretty good setup in terms of CO2 emissions, and we are also happy to have a surplus allowance, more than 100,000 tonnes. And the quarterly deliveries, you can say, okay, it's pretty low now. But as I said, we are running just one line. And by next year, second half, we will add pretty high volume on this slide. When it comes to energy consumption. As you know, we -- okay, we maybe don't know, but we stop Q4 our thermal mechanical pulp usage, so very energy -- intensive energy users. And nowadays, we are only using 100% recycled fibers. And we reduced the intensity of electricity. Before we were using close to 1 terawatt hour, 1 million-megawatt hour per year. And now we are coming down to 600,000 megawatt hours, which is dramatic reduction. And the quarterly, the consumption of fibers, as I said, it's only based on the recycled fiber and tomorrow after the startup, Golbey will use more than 1 million tonnes of recycled fiber. We will be the biggest recycle center in France. And here, you can see maybe the fixed cost is seen as a bit high. But I can assure you that it will come down as soon as the PM1 will have started up because so far, we just run with one line, it's why you see high-fixed costs. When it comes to the -- you have heard about the Green Valley Energie. This is the name of the project, the biomass boiler and the steam turbine generator. This project is around EUR 200 million project, is on time, on budget. It will start quarter 2 next year. And this is extremely good setup because this is the largest biomass boiler in France so far and it will produce steam from demolition wood. This steam will go through a 25-megawatt steam turbine generator, and the steam out of the steam turbine generator will go to produce containerboard. This is external setup at the very competitive price, and this is extremely important for us in the 20 years. This is a 20 years contract done with GVE Partners. Norske Skog is 10% shareholders. It will be operated by Veolia, which is also 10% and owner is PEARL infrastructures. When it comes to the conversion, okay, we say, we're talking conversion and people not knowing conversion what does it mean, think we just change few pieces on the machine. But actually, more than 95% of the equipment of the pieces of the machine are changed. This is a brand new machine. It's a brand-new wrapping line and also with a winder. All is new. You can't imagine here, the -- we kept the building, but all the rest has been changed. The conversion, this machine is a state of the art. It will be one of the top machine at the world, I would say. And with high capacity, 550,000 tonnes, big width, high speed, big range of production from 70 grams to 140 grams. I can assure you it will be ready tomorrow a cash machine, and we are doing our best to deliver what we should deliver. I know we are a bit late. But as Enzo said, we have been struggling with COVID situation and Ukrainian war. There is a lot of projects going on, on stream. And in this area, we have 3 big projects at the same time, and it's a big challenge, but we will do the job. And this EUR 300 million net project that maybe -- and maybe it's -- I'm sure it's one of the top 10 -- within the top 10 project in France. Because when you look at the project, all together, the GVE and the [ bucks ] is more or less EUR 500 million. It's a huge money. I'm very happy that Norske Skog trust in Golbey to have these big investments. I can assure you that tomorrow, Golbey will be still a cash machine, a cash, and we will have very low mill-gate cash cost. But maybe it's maybe better than words to show you a short video, what the conversion is. [Presentation]

Yves, do you have any concluding remarks?

No, just to tell you that today, we are doing our best to go to the finish line. Today, we have more or less 700 people working on this side, that excluded the one in the producing paper to build these 2 huge projects. Thank you for listening.

Thank you, Yves, for a very good presentation. And now I give the word to Per Ivar Berg. He is the mill Director at Saugbrugs, and he has been also a Mill Director at Follum and Parenco. He has an extensive experience from the pulp and paper industry. The word is yours, Per Ivar.

Thank you. Good morning. In Halden and at the site of Saugbrugs it has been industrial activities for more than 160 years. There's been a lot of product and processes. But always, it has been timber involved and also wood processing. And that's also the case today. So we are an industrial site based on fresh fiber and green energy with a lot of possibilities, and we have an extremely good infrastructure. As Geir said before the landslide end of April, we were among the biggest SC producers in the world, and for sure, the most cost effective. So in a benchmark for 2022, we were, by far, had the lowest mill gate cash cost. At that moment, capacity was 360,000 tonnes and, of course, suddenly, we are without PM6. And we have decided to start up PM5 and that give a capacity of 200,000 tonnes. The same as Golbey, we have very good energy situation. We have long-term contracts when it comes to electricity, and we have a biofuel boiler, the biggest one in Norway. And another thing which is extremely good at Saugbrugs, we are also located very close to the raw material source and we have very good access for wood, which is extremely important because our raw material is based on 100% wood and it's processed in the TMP plant, it's thermomechanical pulp line and the capacity of the TMP plant is, for sure, at least 450,000 tonnes, which is a big surplus compared to what we are utilizing at the moment. So big opportunities there. With biomass boiler as one of the biggest, it's is the biggest one in Norway. We also have a surplus of CO2 allowances quite a big number. Another thing that is normally not thought over so much, but you see it when you have a greenfield project or upscale scale-up of our production site is that the limitation is often the grid, the electricity grid. And in Halden, we have at least 280 megawatts, can even be higher up to perhaps 400, 500 and we utilize only 50% of that. As PM5 was stopped in 2020 due to market situation and has been stopped since then, so it's more than 3 years. And immediately after the landslide, we consider that it's possible to start it up again. We haven't done any maintenance on it for these years. And through the summer, we did the investigation and concluded shortly after the summer that we wanted to start it up again and it has been done some maintenance on smaller investments. And last week, we have been doing the testing and commissioning of the machine. And yes, this week, we are testing the drives. It means full speed on the machine. And hopefully, next week, we will be able to produce the first paper on the machine. And then we will have a capacity of 200,000 tonnes. Of course, it will take some time to ramp up. But if you look at the quarterly production, hopefully, quarter 2 will be closer to 50,000 tonnes. As I said, we are more or less 100% biogenic CO2 emissions, and it means that we can sell a lot of allowances and we will also do this, this year. One of the reasons for being one of the most cost effective is that it has been worked very good with how to reduce the electricity consumption in the TMP plant, and we did some bigger investments a few years ago, and we were able to reduce electricity consumption for pulp production with 45%. And that's extremely important because it's a very high intensity energy demanding to produce TMP. And that's one of the reasons for being among the best. At the moment, of course, we are suffering of only having PM4 in production. So that's around 30% of the capacity with PM6 in operation that we -- for sure, we will improve the specific consumption. Per tonne down to fixed cost is, of course, influenced by the landslide and cleaning up and securing the rock and also reconstruction of the building for the third quarter in this year. As Geir said, we have settled the insurance. The insurance is settled and that gives us flexibility to either reconstruct PM6 as an SC paper machine or we can do other products, and we want to look into other products. And as I said, we have a very good infrastructure. And like the biomass boiler, we are utilizing 20 megawatts, 25 at the moment and has a capacity of 75. The water treatment plant was built for 600,000 tonnes of SC paper production. So it has a huge overcapacity and the TMP lines, as I said, they have a big surplus. So we have a lot of opportunities. And of course, we have a very skilled and experienced organization at Saugbrugs and we are very good located near the forest. So if we are going to do something else than to restructure PM6, we will save a lot of investments in the infrastructure. Yes, we're also doing some real estate business, and we have a big or large property outside the mill. And if you look down here, we built a school and sold that last year together with Porsnes, our gross property value of NOK 730 million. And these days, we have started up a new project to see more possibilities together with [indiscernible] and we will look at the areas number 2 to 5. 2 is not a clear ground. It's not a building there anymore. And we will also look at Sauøya, which we own and have the logistics center and the harbor, but we will go on the east side and the plan is to build the housing and flats. And of course, it needs to be reregulated, but we have a very good contact with the community and that it fits into their plans, what they want to do in this area, the Southwest of Halden City. As you know, we have been busy by making new products based on fiber, bio-based raw material. And the last year, we have had good progress both with the CEBINA and CEBICO. CEBINA is the nano cellulose product, and we have been working closely with different users. And we have supplied CEBINA for commercial production, for paper production in Sweden and Finland. We are working closely with Hunton to improve their fiberboard. And another example is the form for the furniture industry, it's also added the nano cellulose to reduce the cost and to get other properties. Last year, we also started up our installation for making CEBINA master batch, which means that we can make master batch internally and not depending on an external company for that, which we were in the past. CEBICO has had extremely good development through the year. And one of the reason is that we installed that pilot at Saugbrugs, which was opened or started to take in use beginning of next year and we have increased the number of recipes extremely. So we are over the level of 500, and it's -- it can work much faster with end users. And today, we have like letter of intent with Høiax, so they want to replace all the plastic on the hot water tanks with CEBICO. And we have produced 8 of the 9, so that will be launched next year. We've been working with 6 that we launched product on CEBICO next year. CTM Lyng are now starting production of downlight with CEBICO. And of course, it's about sustainability and it's the CO2 footprint, but it's also about that we can do other strength -- we could do other properties like it increases the strength and we can reduce the material. And I think that was an introduction of at least Saugbrugs. So thank you.

Thank you very much, Per Ivar. That was a very good presentation. And now we will go to present 2 mills, the Skogn Mill and Boyer Mill. We are unfortunately not having the mill directors from those mills here today. They are excused because they're doing important business for their companies and for the mills. And we have the Chief Operating Officer, Amund Saxrud. He's going to present both the Skogn Mill and the Boyer Mill. And Amund has been in Norske Skog since 1996 as an engineer, and he worked a long time at Follum and also he was the mill Director at Skogn for 8 years. And since 2019, he has been a Chief Operating Officer. You're welcome, Amund.

Thank you, Carsten. Starting with Skogn, I still living in Levanger, so I can see this view every weekend at least. This is greenfield sites from the '60s. So the first machine at Skogn started in '66. As you see, it has very good location. And we have both railway, road close to the mill. And as you see also sea transport directly in the trend, I am sure, so it's -- and actually, more than 85% of the paper is going out by vessel. So good logistics setup for the mill, have also 2 biomass boilers. That means that we are not using any fossil fuel at all at the Skogn mill. And have also long-term energy contract with Statkraft. And as you know, maybe that the [indiscernible] area in Norway is quite a good price, both now and also in the more longer term. So the energy prices in this region is very competitive towards both other areas in Norway, but also to Continental Europe then. So and I also will comment that we are now running also a TMP project at the Skogn mill. That means that we will increase the TMP capacity and allows us actually to run 100% TMP from quarter 2 next year. And as also Per Berg mentioned from Saugbrugs, it's also a good grid, we have more than 200-megawatt capacity, grid capacity into the mill. The capacity has been mentioned before, totally 510,000 tonnes of newsprint capacity very competitive. Also on the CO2 emissions, as you see, it's almost no fossil emissions and this is the allowances that we get. So we have quite high surplus on allowances from the Skogn mill and you see also the volumes on the right-hand side, quite stable volumes that you can also see here more and more also on the electricity consumption, energy per tonne. Fiber consumption is also quite stable. And I think the main reason for this is, of course, that even if the market is going a bit up and down, we see that the cost position at the Skogn mill is very strong, and we have been utilizing the full capacity of this mill now for several years. On the right-hand side, you see the fixed cost development, you see some increases there the last year. This is, of course, driven by some inflation, but we should also say that the last 2 years, the market conditions and the competitiveness of the Skogn mill has been very good. So we have been running full capacity, and we have also been running, you can say, all red days, meaning that there has been some additional fixed cost linked to that, but I would say that this is also possible in a way to take down again if we come into a position that we are not able to utilize the full capacity. But as I said, the cost competitiveness of this mill is very, very strong. So then moving into complete other region. We were actually down there last week. So this is the Boyer mill, and that was the first production site in Australia, and it's actually now the last one. So and the history of this mill is actually that after World War 1 Australasia. They said that it was -- they were very much dependent imports, so they tried them to during the 30s to build up capacity, to be have more domestic supply. That was not only in paper, but a lot of other industries as well. So the first production in the Boyer mill was in 1941. And as I said now, it's also now the last actually a domestic producer of paper in Australasia. So it's 2 machines, 1 producing newsprint and 1 producing magazine. Total capacity around 280,000 tonnes only TMP and the wood is locally sourced in Tasmania. So no, you can say, a very efficient transport of wood into the mill. We also, at Boyer have a long-term, low-priced energy contract with stately owned TasHydro company. So a good setup there. On thermal energy, it's maybe a bit more demanding because we have a coal boiler at that site. So that is, of course, not the best we can have in regards to CO2 emissions, but that it was what we have. And we have been looking into the investment possibilities also to see if it's possible to build more typically boilers that we have in Europe using bio wood instead of coal. But as of now, it's coal boiler at the site. Yes. Here you say actually the location. It's in Tasmania. And if you look into the CO2 emissions, you see that is bit different picture from ones in Europe due to the coal boiler then. We have a lot more emissions of fossil CO2 and also in Australia now. They are introducing what they call a safeguard mechanism, but it's similar to what we have in Europe linked to CO2 quota systems. And this will be introduced now, and this will, of course, also influence the cost at the Boyer mill. This will be a step-wise introduced, so it's not a huge cost but it's around NOK 5 million to NOK 10 million from July 2025. And as you see on the volumes on the right-hand side there, the volumes has been quite stable. And this is, of course, also linked to the capacity closures that we have done in the region. So both we started with closing the Albury mill and also have closed the Tasman mill in New Zealand. So both these mills are closed now. So the 2 machines that we are running now in this region is serving the mainly domestic market in Australia with some smaller export volumes into China and India. So I think yes, in the end, this is also just showing the energy consumption, wood consumption. It's more the same picture when we have a stable production and we have had that the last years now, and this is very stable. And also some increases in the fixed costs here linked to higher inflation. But I think the energy contract we have is long term and very competitive on prices. So I think that was it on the 2 last machines or mills.

Thank you, Amund. Thank you for the presentation of Boyer and Skogn. And now we will have a short Q&A session.

So be ready. Geir, is ready for questions, and you can raise questions. Anybody who wants to start. And we have to use this microphone. Otherwise, we won't stream it on -- so we have it later. And both we are streaming live also, so we will stream it. So if you present yourself and then the question, it will be very nice.

My name is [indiscernible] , a shareholder as you. I wonder -- I was hoping to hear a little bit more about the future business plan with Saugbrugs but I understand we have to wait a little more for that. But could you meanwhile, tell us if you decide to go on with the PM6 and rebuild it, what would be the marginal CapEx to do that?

Unfortunately, we are processing the ideas and collecting information to have enough information to do the best decisions for the company. But there are other options than SC machine, which are being explored to see what to do to create income and to utilize the clever people you have on the mill. But unfortunately, I cannot share information. It has to be sent to the Oslo Stock Exchange first, I think. So I cannot share that here, but it's very enthusiastic about all the opportunities that we have. So sorry for not say anything more about it. It's premature.

And another one not that difficult question then. You're speaking about cost efficiency. And what about the cost efficiency at the production of PM4 and PM5 at Saugbrugs. It's smaller machines than you used to have with the PM6. Will they have the same standard of low cost efficiency as the others?

Now of course, when we have a machine which produced 260,000 tonnes, which is stopped, and we have now restarted PM5 with 100,000 to replace that. The total output is reduced by 160,000 tonnes. That means less income and less contribution to share the fixed cost of the mill. But that is way not the game plan for the future. So for the future, this could open up a situation where we actually if we do something else, then rebuilt equipment on the machine #6 to do something else of income, then SC that perhaps that will create a new income stream for another segment. And then we could keep #5, which before the land slide was closed. So we then can credit income from #6 from other income streams and then keep #5 and #4, to serve existing customer portfolio for the LVC products. So that will mean in the future. Three mills could be running. But that's in a way too premature to conclude. So for next year, we had this 18 months interruption compensation, which will invite be added to the P&L until October. So that will reconciliate the P&L for the company at least until October next year, the insurance compensation.

Kenneth Sivertsen, Pareto Securities. Just a follow-up on the Boyer mill. You have been in the process of selling, divesting this mill in the area. Could you just update us on the process? I know is it time consuming, but just give us an update there?

Yes. There are some interaction among investors, I would say, which has an interest of the mill. Could not go too much into detail, but there are on the downstream side, take off its partners on the downstream side, which, in a way, perhaps has some ideas about how you could utilize the mill for to go vertical in the value chain backwards so there are some interaction where there could be some situation for us, but it's also not allowed to say more than that. There are process ongoing.

Could you tell us, please, why did you -- what was the main reason why you invested in Norske Skog?

I like fiber, I've been working with fiber [indiscernible]

You can work into wood then.

It's not the same smell as from the dust.

But please, can you tell -- what was the main reason?

Several, I think, it's actually gives best kind of competence being from the upstream side, is deep relations with [indiscernible] , feel in a way at that part of the value chain for the company quite secure in my role with my experience. And I'm also kind of a little buffet man in my head. I like proven records. I like strong balance sheets. I like proven things in a way. So I feel if you look on the balance sheet of Norske Skog, the quality of the mill and it's written down. I think if you should, in a way, on greenfield established Norske Skog, mills today would be like EUR 4 billion, EUR 5 billion. So you could access that. And last year, NOK 2.7 billion in EBITDA. This year, 1 point something you can see at the third quarter plus the fourth quarter, even with not so strong market and the proven records, I showed you for some years, even in the low cycles, we make money. And it's accrued competence in company and for Norway's part. It's a platform. It's the main player for fiber refining. So that's in a way some of the factors that's together made me being willing to invest some of the accrued earnings in my life to put that into Norske Skog and I'm very pleased to have my role to try to help the company to achieve profitability in the future.

[indiscernible], Carnigie. Could you give us some more flavor of the delayed start-up from Golbey? And secondly, you gave a wide range of saying second half of 2024. Could you be a little bit specific? Are you closer then to the first of July or New Year's Eve on that? And a third one, you're also saying that it takes about 2 to 3 years to reach what you call full capacity. Can you tell us a little bit more how do you reach that full capacity? Is it technical issues? Or is it that you have to sort of work with the customers and finally, what do you think the capacity utilization will be one year after the start-up?

Yes. 4 questions. The first one is I think what Norske Skog, remember, I have just been the CEO for 3 months. But what I have collected of information is that also have the same experience when rebuilding of equipment in [indiscernible] in the particle board mills. It's if you invite a supplier to build something for you on a greenfield, it's like this is the speed. This is the quality and this is the output. And then I pay for it and I should just push the button. This is not possible when you do a rebuilding of equipment. It's perhaps if an answer you can confirm rebuilding of this kind of huge upscaled machines like you said, it's not like there's some parts. It's almost complete rebuild of equipments. The knowledge we have collected is it should be humble to how the complexity of it. So that is the main reason for we have to inform that it will take a little more time than what we initially thought it would take. And regarding utilization, I think you should remember on the downstream side, the customer base, which you serve. All of those customers, they have a supplier. We have to force somebody out and motivate them with Marleen and Robert to prefer Golbey, prefer Bruck. It's not like it's open doors. So it's a battlefield, we have to chase customers. We have to collect them. I think you can follow up on that question afterwards Marleen and Robert. So it's not a walk in the park. So the first paper rose goes to the first customer. Then number two, then number 3. So this is accelerating rate, which we are, as Enzo said, on track with that. And first year, the third question, what would be after the first year, the utilization, what do you think, Marleen?

Well, it depends very much on market. That's what we will discuss later on the presentation and utilization. Utilization rates will be around 84%, 85% in 2024 and '25 has more to do with the market circumstances than actually the startup of the machines.

Perhaps there was another question. Oh, yes. Second half, is it first of July or 31st of December? I understand. No, we cannot.

Okay, we will have a break, it's about 15 minutes. We will start at 10:30. And you can go out in the hall, and you will get some refreshments. Thank you. [Break]

Okay. Then we are moving on in our program. And the next speaker is Marleen van den Berg. She's from Holland, and she is the Vice President of Containerboard and she started to work in Norske Skog in the year 2000, but she has been away and work for some of our competitors, and we were very fortunate that we could bring her back to Norske Skog 3 years ago. I know she is responsible and Vice President for Containerboard. And she is now on the edge of launching the new containerboard from Bruck, and you will hear her experience about that. The word is yours, Marleen.

Good to be back here after 2 years, 2 years in which a lot has happened. We've seen a war. We've had another one recently, inflation. So a lot of things happening in the global economy and geopolitically and it will influence the demand for packaging as we will tell you later on. But first, like to dig into a little bit back into the details of 2 years ago, just to tell you what exactly we are producing, what exactly Enzo is producing in Bruck. We are producing containerboard. Containerboard is paper that we sell in reals to corrugating companies, corrugating companies produce corrugated sheets. We produce actually 2 grades. We produce test liner and fluting. Test liner is the top and the bottom of corrugated cheap. And fluting is actually the way it's a commodity of commodity but there are many, many weight varieties in these papers. Eve already said that they were producing Golbey from 70 to 130-gram and actually Enzo produces from 90 to 160 gram so a lot of variety in the grammages. Basic markets are industrial packaging and transport packaging, boxes for e-commerce, boxes for retail, boxes for transport. So that's basically, what we produce and what we already sell from Bruck today, these products make about 60% of the packaging market. So 60% of the papers are these containerboards. Of course, there are also other packaging products. As we all know, you have your carton board, which is primarily a consumer packaging product. And because of the end users, which is food, cosmetics, pharma, these are normally virgin fiber products, and they also have more challenging properties when it comes to the production. So that's carton boards and of course, as we all know as consumers, there's also other packaging products, more bespoke, more tailor-made, like, for example, paper pouches, Sakraft and that's a total other segment. But again, we are in containerboard, reals sell to corrugators. Now how have we positioned ourselves. This is also a little bit of information that you got last time. You see here the value chain of our product, selecting raw material, producing containerboard, producing paper, corrugating, making the sheets from the sheets, making the boxes and the boxes go to brand owners, retail, what have you, the end customers. There are players in this field who are active actually in the entire chain. So they collect raw material, they process it, they make the paper. They design boxes and packaging together with OEMs, those we call integrated players. Think of people like [ DS Smith ], Smurfit Kappa [ Mondi, Sakai Spain ], big players integrated, but you also have independent players. Independent players focus on one part of the chain. We are an independent paper producer because we only produce paper but you also have independent packaging producers. They only produce corrugated sheets and packaging. Now you can imagine that these players, so the independent paging producers do not like to buy their paper with one of the integrated because they compete with each other downstream. So they prefer to buy paper from independent players like Norske Skog. And that is why we very much position ourselves as an independent paper producer because if you look at the largest markets in Europe, think of Poland, Germany, Italy, those are very much dominated by independent packaging producers. That doesn't mean we only sell to them, though. We also sell to the integrated players. They are usually short on paper as a strategy. So they're always on the lookout for new strategic partners because usually, they have a growth scenario. And that usually is more focused on the corrugating side than on the paper side. So they're also part of our customer base. Also, we sell to smaller and larger customers, of course, a small customer can be up to 1,200 tonnes per year, so only 100 tonnes per month, but the large customer can have around 4% to 5% of our total capacity. So there's a real mix in our customer base. In total, we have around 70 customers, and we supply around 120 sites once Golbey is up and running also 100%. The entire market is somewhere between 650, 700 corrugating machines throughout Europe, and they are owned by 300 to 400 companies. So in that sense, we have quite a nice customer base with both machines. Of course, that is very much determined by where both mills are because you don't want to transport this paper too far away from the chimneys. So containerboard is what we produce. We position ourselves as an independent packaging producer, and that's how we started to enter the market with Bruck. Now looking at the European markets. I already said that most of the integrated players have a growth scenario. Basically, the independent players also have growth scenarios. So you see there has been a lot of investment in either new builds or conversions of paper machines like we are doing. So right now, the market is 26 million tonnes. And next year, with a lot of growth, we will end up at 29.3, which is, again, a lot of growth, especially looking at the market where we are today because the market is unfortunately under pressure. As I said before, we had a war, we have inflation. We have a lot of aspects that make sure that we do not buy as much as we did before. We as consumers do not buy as much produce as we did before. And that means that we need in general, less packaging very much influenced by the factors. For example, inflation, very clear, then you focus on the things you need to buy your food and what have you. But you don't buy as much furniture or other stuff and that is the things that need packaging that need our paper. So in that sense, we have seen a decrease in demand basically since the last 1.5 years. And you see that also here in the price index of Germany, basically, starting June '22, you see the price index decreasing. And that is what we are facing today. And that is also why looking at this picture, it is extremely important that both Golbey and Bruck are on the left side of the cost curve. So we can actually survive this period and then go and move on to a period where we see the normal traditional growth in this industry, again because there will be growth again in this industry. What is also important to understand is on this side of the cost curve, we see at this moment, capacity being taken out. The last couple of months, we have seen 4 announcements of mills actually being idled. The last one only a few days ago, a little from Smurfit Kappa. If you look at Smurfit Kappa and other integrated, they will have some assets that are not as profitable as ours are. And you will see that in the future, some of these assets will be taken out due to the market circumstances. Now again, are we not positive? Yes, we are positive. At this moment, we see, of course, like we just talked about, the operating rates we will see a decrease in demand in 2023, probably about 6% to 7%. Long term, the prediction is still though that there is growth, growth between 1% and 3%. Some people already predict this growth in 2024. So let's see if that happens. At the moment, signals are quite neutral. But at the moment '23 decrease in demand. Long term, the drivers that we discussed in our first Capital Markets Day are still the same, though. Sustainability, switching to sustainable packaging, switching to renewable packaging, increase in e-commerce because everybody is badmouthing basically the growth in e-commerce. But mind you, that is still 10% per year. So in that sense, we're still profiting from that growth as well. Of course, global GDP, international trade, it will all pick up again. You are all investors here. You know that what goes up must come down, but also the other way around. So in COVID, people bought a lot of durables like whatever, sofas or garden furniture. At the moment, they're not buying that. Logically, you don't buy a sofa every year, but it will happen again. And hopefully, already in 2024, with Golbey coming so we can definitely earn profit from that when it comes up again. So long story short. The destination is still the same. The road has been a bit more bumpy than we expected but we are still definitely going to be a leading independent paper producer. Thank you very much.

Thank you very much, Marleen. Another next speaker is the most experienced Norske Skog presenter today. He has been in Norske Skog for more than 30 years, and he has been Managing Director of the German sales office. He has been the Managing Director for the Pan Asian office in Asia 20 years ago, and he also worked for Herald and Times in Glasgow, and he is originally a policeman from Glasgow. Is it?

So if you're not nice to me Carsten, i'll take you away. Thank you for that introduction. Yes, when I started out in this industry in 1987, I had a full head of hair, but like the publication paper markets, it has declined a little bit. So, yes. Clearly, we see demand for publication paper has been declining for some years now and mainly because of the digital transformation, which has resulted in less ad spend for printed media. You see the graph to the left showing that the newspaper ad spend peaked just prior to the financial crisis, and has come down quite dramatically since then. However, print still represents more than half of the publisher revenues through both advertising and circulation. And worldwide still accounts for close to USD 70 billion. So I mean we're still talking big numbers. We're still talking significant revenues. The industry is not dead yet. And it's clear that even if publishers state that the aim is to be fully digital, even in 2023, they're still not there. They cannot find a way to fully replace the considerable revenues that they get from print. And that's significant. And it's the same for retailers. We see in the retailer market that some retailers want to go to a full digital marketing. Other firmly believe in paper. And the jury is out as to what the best approach is. Clearly, for us, some who have paper and digital are preferred. But those who have gone solely to digital, some of them have already started to come back to paper because we see that it drives footfall in the stores and particularly in times of recession, that's important. So it's not dead yet. There's a long way to go. And clearly, the other factor that we need to remember is that paper is a small share of those publisher costs. If you look at the graph print production and distribution is less than 20%, and that's including the paper. And clearly, recently, the distribution costs have shoot up for publishers and retailers and that's what they're trying to focus on. Of course, it helps us -- it helps the customers if the paper prices are lower. But at the same time, they can afford to accept higher prices and we saw that in 2022 when the prices peaked. As we've said, it's still a long way to go before we're dead. We're not the area, a long, long way to go. And what's key for Norske Skog is that we're a trusted and long-term supplier to more than 400 customers across the world. We've got a very diversified base in Europe. We've got 43% of sales to the top 15 customers. And the same in Australasia, we've got 30% to the 2 long-standing customers. We've got 70% to the rest of the market. And actually, we're still, as Amund mentioned, we're still for Boyer focusing on the Australian and New Zealand markets. We have a fairly dominant position there, albeit that there is some need for exports into China and India. And just as an example, why are we still with all these customers because it's a people business. Geir, Amid and I were down last week in Australia, and I was in New Zealand, and we met the 2 largest customers there. They appreciate that you travel all that way because it's an important business. And we learned a lot from them when we're down there about what the trends are. And they still believe in paper, as I said, and they still see a future for the Boyer mill and supplying that region. So that's good. We know we're in difficult markets. Clearly, we've seen the operating rate come down the end of '22 into the start of this year. But we do see a little bit of stabilizing demand now. I think there was a large stock buildup towards the end of '22 because of the fear of the energy position, particularly in Europe. The impacts of the war have been felt. But we start to see a little bit of light at the end of the tunnel now as we're in Q4, and the graph shows that the operating rate has come up a little bit. And also significantly, the stock levels have started -- the producer stock levels have started to stabilize down towards the trend line on the 25 days. Albeit that within that 25 number, the coated mechanical stocks are still relatively high. Newsprint and SC are a little bit better, maybe around 20 days. And from our perspective, Bruck is extremely efficient at making short-term deliveries in the main markets would be supply LWC from Bruck. So our stocks are nowhere near the industry level at Bruck. We're very happy with that. I think the key is we've talked about the mills. We've seen the different portfolios. The key for us is to be competitive on the cost curve. And we will then, as Geir says, continue to make positive profit and generate cash. It's difficult to the market just now. But if you've got the right assets, then you can still make money even when the prices are in the low part of the cycle and then when things turn up, and I'll come back to the capacity, when things turn up again, then we can make a little bit higher revenues and profit as we've seen in previous years. So we are comfortable with our capacities, where they're located and where the access to the markets are albeit that yes, there are differences if you take Australasia compared to Europe. And there are differences between the mills as we see, for example, Bruck compared to say Saugbrugs, Skogn and Golbey. Certainly, there is significant overcapacity just now. I think we all realize that you, who are analysts analyze the markets, perhaps even in more detail than we do. Where we are exposed, of course, is across all of the grades, newsprint uncoated mechanical, which contains the SC and then coated mechanical. And clearly, at the moment, newsprint is the most balanced, albeit more capacity will have to come out. Magazine grades are very weak in terms of the operating rates and more needs to come out in coated mechanical. But as always happens, the market adjusts to the reality. And already, we see announcements of further capacity closures, mainly within the magazine grades. You see on the chart, what's been announced for closure before the end of this year, 10% in coated mechanical, 22% in uncoated mechanical, including SC. So these are large chunks that are coming out, there still needs to be more coming out. That's for sure. But as the markets will adjust to those closures and further closures, then as long as you're on the left-hand side of the cost curve, then you're well positioned to take benefit from that. So I think that's the signal. Yes, the markets are tough just now, but we've got good assets. We will strive to keep the assets running as best we can. And then we're able to take advantage of the situation when other capacities come out. Of course, the prices are important. You see the effect of the prices on the EBITDA. What we see now is that they are starting to stabilize a bit in Q4. We've seen contract periods dramatically reduced when we were in this huge pressure with the cost. We were down almost to monthly contracts on newsprint in Europe, Continental Europe. We started to see that move back to quarterly. And I certainly think that we will continue with that into next year. And maybe even we'll look at 6 months contracts in some areas. It's a bit dependent on what happens with the energy situation in Europe, where the prices go. My feeling is that we're kind of at the bottom, maybe a little bit of movement further into Q1, but not much dependent on the energy and then we'll see what happens with further capacities coming out. For us, we have got some contracts that are of longer duration, albeit we're not fixing the basis for those longer durations. So we've got some volume contracts that are longer, but we have specific price points that we adjust to. So we're following the market in that respect. So I think the cost position is important. I'll hand over to Amund who will start to talk about the raw materials and here we see our key input factors because that's critical to us being competitive on the cost position.

Thank you, Robert. Hi, again. I think I will try to give a bit more flavor on as Robert said, the most important cost factors for our mills. So starting, but before, I think we can start with also a bit about, you can say, our industry is an important part of being a circular business. And I think if we start with the end products, 71% of actually what we produce is based on recyclable raw materials. And it's not only that it's recycled, but it can also be recycled many times. So up to 7x in a way, it's what is stated for recycled pulp. You can drive it through the value chain 7 times before it's out. So this is, of course, good. We utilize also more or less everything of the raw materials, only 2% of what you use is going to landfill, and this is mainly an ash from the boilers. And also on energy, you can say with the last project now in Bruck moving from gas into waste energy. We have 84% of our energy production is based on green energy then. And this also when we measure this in the right there, you see the Scope 1 and 2 CO2 emissions, you see that we have quite a huge reduction. And of course, the main driver of this is the new boiler in Bruck. So actually, we have already achieved our ambitions on scope 1 and 2 up to 2030. And now we are also focusing more on Scope 3 on the CO2 emissions. Then moving into recycled fiber. And I think now, actually, we have to divide in 2 types of recycled fiber. We have for the newsprint or you can say that printing paper, we have the RCP. And for containerboard, we have the OCC. Starting with the RCP, the demand is going down on printing paper, and that means also that the availability of RCP is going down. So even if we have had the price reduction, this is showing the price on the RCP itself. We see that the reduction actually in cost delivered to the mill is a bit lower. And the driver of this is, of course, that with less volumes, we need to extend, you can say, the area that we are collecting RCP from, and that means more transport cost. So that is actually explaining why we don't see that same reduction you can say, in our cost delivered to the mill compared to what actually the market prices. On OCC it's a bit different because there, it's still a bigger volume. But I think generally, we can say that we try to source recycled paper directly with communities, and this has been a very important part of the business in Golbey. So we try to bypass in a way the trailers. We had direct deliveries from the local communities. And this is, of course, a very competitive towards being then exposed to spot volumes on recycled fiber. So I think that is the headlines on the recycled fiber. If we then move to fresh fiber, and this is -- you can say that recycled fiber this is mainly for Bruck and Golbey then. Fresh fiber, this is from the two Norwegian mill and Boyer. But if we concentrate on the Norwegian market, you see that this has been quite a steep increase in the prices. But we see now we believe actually that the price is on a high level now. We see signals that pulp wood prices in Sweden are moving down. So we believe that we are on the top of the cycle on that. And you see this is in a way the market price delivered to road. Here, you see actually then the price delivered to the mill. And again, you see also a bit higher cost increase than we can see in the market. And again, this is driven by logistics and I would say, in Norway, now it's 2 drivers behind that. And for the Skogn mill, it's actually the flooding that we have. We have only one rail track to Skogn from the eastern part of Norway now. So that is limiting away a bit the transport possibilities by railway and some increased costs linked to that. And of course, also the land side at Saugbrugs taking down the volumes also the wood supply into the Saugbrugs mill hasn't been, in a way, optimal in having low logistics costs. So we have some additional costs due to the volume decrease there. But as I said, we believe that we are on the peak on the cost level on wood in the Nordic area now. If we move then into energy and again, divide in 2 it's both electricity and thermal energy is very important. If we start with electricity then, it's the TMP process, the pulp process where we produce the pulp for the paper machine is the most energy consuming part of our production facilities then so to optimize this is some important, but also to have long term, you can say, competitive energy contract is important for us. And we have that in Norway for both the 2 Norwegian mill in Golbey in France. We also had 2 energy contracts that, in a way, is serving at least 70% to 80% of the energy volumes to that mill and also with the new boiler in Bruck, we have reduced our exposure to both electricity and gas. So generally, we can say that we have competitive electricity contracts for more or less all our units now. And if you also remember, what I started with it earlier today also in Boyer in Tasmania. We also have a long-term agreement with the government in Tasmania. So if we move to thermal energy. Thermal energy is, of course, very important for us to drying the paper. So thermal energy is either produced by heat recovery from the pulp process or from energy produced in boilers. And in Europe, now we have at Skogn. We have 2 bioboilers, and we have heat recovery from TMP. No exposure in a way to fossil fuels, same for Saugbrugs. Golbey now with the new GVE that will deliver thermal energy to the rebuild a PM1 machine. We will also have almost no fossil exposure in Golbey. And in Bruck with the new waste-to-energy boiler, we have reduced our gas and electricity exposure heavily in that mill. So I think I can say that -- and we also show that actually back in the history where we had the very volatile energy markets. We are quite competitive also in the way of when energy prices is going up because we have long-term agreements on the energy side. So this, we have been commenting a bit earlier also. This is showing the CO2 allowances that we have in Norske Skog. At the left-hand side, you see the price development. And of course, this is making the CO2 quota and allowance is quite important for us. But we commented it mill by mill, but you see there is a huge reduction done. And as I said earlier, the main driver for this is, of course, the new boiler in Bruck taking down the gas consumption and then the CO2 emissions. So all in all, now we are having a net, you can say, a positive situation on CO2 allowances available in the company. So this is a good situation. And on the fixed cost, I think as I also said earlier today, we have been through a phase now with good market conditions. We have been operating our assets more or less full, both in 2022 and 2021, with the weakening markets now, we are not utilizing our capacity throughout all machines, but that also means that we have to put even more pressure on the fixed costs. So you see that this has been increased a bit the last 2 years. And as I said also earlier, this is also linked a bit to that. We have been utilizing the capacity full. We are now working hard also to push the fixed cost down to be available, to be competitive even you can say, with lower operating rates than that we see now in the last quarters in 2023, and we also believe that the markets will be a bit weaker in 2024 that we have seen in the previous years. So yes, summarizing that, this is in a way showing everything put in together. But I think we can say that even in a situation where the raw materials has been quite volatile. I think we can say that we have been quite competitive in all our mills. And we were able to run through the periods where energy prices were peaking. A lot of our competitors had to close down for periods due to that they were not able to run profitable. So I think we have proved that we have a good cost position, and this is, of course, something that we will continue to work with to be in front of that because it's all about being better than our competitors. If we are that we will be able to utilize our production capacity even in times where the market is a bit weaker. So I think that was it.

So thank you very much, Amund, for the presentation. This is a deep dive into the raw material situation. And now we will get a deep dive into the financials. And Rune Sollie He has extensive experience from Norske Skog since 2014. He has been the CFO of the company. And before that, he worked for KPMG for a while as an auditor and also he worked for Yara International and Statoil and Retail Fuel and now Circle K. So you're welcome, Rune.

Thank you, Carsten. I was in hope you were not going to mention the auditor part, but now it's out. But there you go. Yes, I've only been here 10 years when you hear to these others. Unlike Rob, but I still have my hair, but it's getting grayer and grayer. So but it's as you'll see now, and as you know, it's been 10 years where things have gone down, and they've always come up again. So I think what Marleen said has been through in this period and will probably be true in the coming periods from where we are now added down in the cycle. Is this to one that, that was a wrong way, that was also wrong way. Okay, so here's a bit history of the delivery from the same periods that we have shown before, illustrating here about the declines in volume from market retracting in certain periods, but also that we have stopped newsprint machines in this and also illustrated the quarterly deliveries on the shaded green here on the left-hand side, where the deliveries will be increasing from the containerboard projects as they ramp up going forward. I think that has been well covered earlier where we are in that here. But that is, of course, what we are now. We were sure here next starting to harvest for and will harvest more and more to come in the near-term years. And also just on the right-hand side is just the quarterly deliveries. By middle here, it shows, of course, the same picture. Some have been closed, some have been taken out now for conversion or fully being converted, book has been converted and is now running and producing. So here you see what we have communicated for many, many years that the publication paper business over the cycle should be able to produce EBITDA of around 10%. We'll see later how that has gone. Here you see Europe and Australia separately as we regard them as 2 separate businesses with very little synergies. And for those of you at the back here for the right-hand side, there is something on this slide, actually. This is showing that we have now started the harvesting of the containerboard project that Enzo has led to a successful start. And these graphs will then grow in the coming quarters and also further growth when these projects comes on stream. So it is not a slide without any context. There is some bars showing we are on the journey now to harvesting. Yes. So here's the covenant or target covenants and policies that we have talked about many, many years. As we say, we have said container publication paper should be able to generate with the portfolio of machines we have that has been thoroughly covered where the favorable cost position and other advantages are to around 10%. We still believe that to be the case. And then we also have now moving into the packaging paper market, which we believe will be at a higher profitability level than we have seen in publication paper and also a growing market, contrary to the publication paper market, which is in a structural decline. The covenants, I'm sure you are well familiar with. We have maintenance covenants with equity ratio above 25%. Interest ratio will cover 2x and a minimum cash above NOK 100 million. And our financial policies here. We aim to have a leverage less than 2x in the longer term. As we said last time on the Capital Markets Day, we will peak above that when we are at the peak for the investment project, but deleveraging of that will come relatively swiftly afterwards. But also our aim is to have the financial flexibility to fund short- and low-capital requirements that will come along as a large industrial company that has plans for growth and divesting into other areas, possibly, and also have a capital structure of the group that suits this strategy, but also have a diversified range of access to capital sources. So we have local loans, we have bonds that we will see either here. But also important, have a maturity profile that is spread out in this and also do any things that need to be done well in advance of any maturity. So we do the optimal when we can do it, not when we need to do it. As I said, we've had targets for our operations here, both on utilization rates. And here, you see utilization rates per quarter and also the target rate, which you've seen we've been around below and above, a bit dependent on the markets here and the same for EBITDA targets. We've been above, below, and I'm sure you're going to appreciate which period has been below here with the COVID and everything going on in 2021. And I think I forever will remember, Q2 '21 was NOK 17 million in EBITDA, which means the bar is there. But as you can see here, there's been a nice return from this. So that is why we say we have competitive markets that can leverage on competitive assets and competitive mills that can leverage on the market dynamics. So we have, in our opinion, managed to achieve the targets we have set us for the publication paper, but not the least to all the hard work of the people that have spoken before me today at the mills. So here is just a summary of where we have been on the covenants throughout this period. Cash position, of course, has been well above the covenant level that we have. Equity ratio has also been well above in the whole period in reality from we were listed, where we did some changes in the debt conversion to equity. And also the interest rate coverage is also, except for the period when things were a bit gloomy in the COVID period, are also well above at the moment. And the leverage ratio, we are still well below at the time being. So here's a bit of flashback to last Capital Markets Day. If you recall then, we had some targets or illustrations on where we look to be going forward after the investment projects and things were announced. And I think we're pleased to say that we have been within the range of what we communicated in 2021, both for the net debt to be in the range but also the liquidity to be in the range of what we communicated then in 2021. And for those of you, which I have told all of you, follow our maturity or things, here is some maturity profile. Of course, we have the EUR 150 million bond that matures in '26. And then we have the local loans combined with the ECA financing here that matures from, started amortizing now, but the majority is in 2023. So we have spread out all the local financing over a longer period. And then, of course, there's the bond that we will deal with in due course. Yes. And here also, history, we've seen the cash generation in periods. As you see, Even has in this presentation, illustrated once again the COVID impact, which was poor. But in general, the uptick in things have contribute to a significant share of the expansion CapEx, has been covered by the operating cash flow after maintenance CapEx in the period. And here, you also see the maintenance CapEx and depreciation in the middle slide showing it's higher than the maintenance CapEx, but these are very well-invested assets, the old ones from history. So it is keeping the maintenance CapEx at a level where we can run them at the utilization that we would like and what we have communicated. Yes. And the expansion CapEx, no surprises there that, that has increased from what we announced in '21 when all the projects were announced. As I said before, we've done the K9 boiler waste-to-energy boiler in Bruck. We've done the conversion to containerboard in Bruck, and we are fully doing the conversion at containerboard now in Golbey. So the expansion CapEx is in line with what we have communicated then and subsequent updates to the market. And here is just an overview of where we are at the moment. We have a combination of debt at group level, the bond, and we have also local financing mainly at Golbey and Bruck as the projects have been financed locally. And here, you can also see the variant terms that are -- it's a bullet amortization, as I've said before, of the bond, which coincides also with the RCF which are connected. Golbey, last amortization in 2031. Similar for Bruck, the last amortization is also in '31 and the Bruck waste-to-energy has its last amortization in 2027. So we've tried to do it locally project financing for all the projects and also spread out the maturities here, and it's done at competitive terms for all the local financing that we are pleased with. And here is just a snapshot of the balance sheet. I think the main point here now is that the balance sheet, although it's growing, most of it is, of course, newly invested assets. The largest chunk of it is here. There's still some of the publication paper assets that are producing well and are on the books, but the main increase in our balance sheet is, of course, the investments that we have done now into new assets that we'll be producing shortly, and the harvest will become evident in the years to come after that. And then, of course, you can also see here what share of the balance sheet we've done the cash and annual sales for receivables and inventories. And similar for the other side of the balance sheet, equity and liabilities share, 42% is equity, and then we have liabilities and other smaller bits and pieces, but making up -- but making it all in all a solid position with new assets on the asset side and a healthy equity ratio on the equity and liabilities side. Okay. That was it. And then I'd now like to ask Geir to come up and come.

Thank you, Rune, for the presentation. And now Geir will give us the final remarks, some concluding remarks. And after Geir's concluding remarks, we are opening for Q&A session.

Is this the one, Carsten? Yes? Yes. I'm happy that you have been introduced to some of my good colleagues. Thank you all for sharing your knowledge to the guests we have here today. So final comments. What we do is optimize cash flows from publication paper production across all mills, continue to increase production of packaging paper over next 3 years, further exploration of new products based on fiber processing, significant focus on project execution and cost efficiency going forward. Earnings from investments projects starting to take effect and expected to grow over the next 3 years. So we just have to be a little patient. Enzo has completed the conversion. And in France, you saw the film. I hope you saw it's not a small shop. It's really a AAA, large-scale plant with the newsprint machine, as you said, it's really top world-class, it's 10 meters wide, it could run up till 1,800 meters per minute. It's really something, and combined with the containerboard and energy supply. And as you said, the downstream, where are the customers, it's -- we're really looking forward to that. So -- but we just have to be a little patient. Please.

Okay. We are having time for some questions. So if anybody wants to raise some questions, you're welcome. Yes? Just present yourself and then raise the questions. Try to speak loud so everybody in the hall can hear.

I'm Steve [indiscernible]. And I want -- you saw -- now I'm glad to hear that you are still optimistic despite a couple of setbacks this year, rockslide, CapEx increase and so on and a bit slow market, but you are optimistic. So what can happen to change that? What black swans or white swans can happen in the future which change this picture? That's one question. And another question is the business and the supply side in Europe is pretty diverse. There's a lot of suppliers, particularly for publication paper. What do you think about the future consolidation of the business? Is anything going on there of interest?

Yes. Well, it's always risk factors. If you look upon -- if you divide into on the upstream on the -- for our side, for the outsourcing of energy and fiber, I think, acceptable and not too volatile risks. We have very good condition on the energy supply. So the mill gate cash cost for us is, in a way, not -- should not be too volatile. So the main risk factors is on the downstream on the demand side. If the demand is in a way declining and without the necessary, as you said, Robert, adjustments on the supply side that, of course, the determination of the price for the output of our products will -- could be struggling and challenging for us. That's what we see now. We see the RISI prices has dropped. So even if we are on best practice on production, if we don't get enough paid for our products, it's, of course, that will hit the P&L sheet for us. So that's what we are monitoring, and we try to be best practice. And that's, yes, short way of answering to your question.

Any other questions? Yes?

[indiscernible]. Thanks for doing the highly accretive buyback program. You didn't speak so much about future capital allocation today. But the question is really how do you decide in terms of potential new buybacks compared to new projects or capacity investments when it seems that the market has difficulty in paying for the long-term investment and substantial new capacity investment programs? And in relation to that, your ownership, your personal ownership together with Byggma will increase gradually as you do buyback. And potentially, you might approach where you need to bid for the company. Is that a bottleneck to buy back in any way?

No. I think what I -- when I advised the Board regarding the buyback program could be an alternative distribution to the shareholders, of course, also my family, is quite common sense thinking if we feel that how the share is evaluated at Oslo Stock Exchange per share compared to our own valuations or how much value is behind each share of Norske Skog. If there is a discount there at the level, it should always be considered by the Board if the cash positions are there, that we could distribute by doing buyback of shares. Not necessarily, but it's an option to cash distribution. And regarding -- yes, if -- as for all of you, when we do buybacks, you all get a larger stake of the cake. So that's also the same for me and my family's shareholder position. But that's...

Okay. Thank you. Do you have anything else?

No. Well, did I get an answer for it, did I?

I think [indiscernible] follow-up.

Okay. Thank you. And any other questions? Yes.

Morten Normann, Carnegie. I have a follow-up to the, you call it, dividend or buyback policy. I understand that there was quite a fight with the banks last year or this year. How -- do you have any view of how those talk will be for potential buybacks, dividends for the year 2023?

I think I need some help from you, Rune, to answer that. There are -- it's a little premature. We are not processing the -- for '23 to be paid in '24 is not actually on the table yet. So it's just distributed for this year. So there are some regulations, Rune?

Yes. We are, of course, in the loan documentation, we are not allowed to do dividends until 2025 or distributions. I'm not sure I would consider it as a fight. So I don't know where you had that fight. But of course, when you ask for a waiver, you need to produce them with documentation, which they then granted. Going forward, we will until '25 as it is, we will need to go through a similar process if the capital in the company is at a level that, that becomes a subject again. But it was a normal waiver process to put it that way.

Any other questions? Yes?

[ Preben ] [indiscernible], investor. I guess this question might be for Marleen. There's a lot of new volumes that you are supposed to sell into the market. And I was just wondering what are your key selling points to new customers? What are sort of getting their attention when you call them for the first time?

First of all, this is a business that has been traditionally always growing. So in that sense, new suppliers are always welcomed. These past 1.5 years have actually been exceptions in this business. And we have started to introduce the company already 2.5 years ago. So the contracts were already there. And then when Bruck came, we had already prepared that people would get samples, we would sell sample trucks. So basically, the process was already in -- was already going on before we actually started producing. So first of all, the fact that it has been traditionally growing, so the door was always open for new suppliers, any new supplier. Secondly, the independence plays a very big role. Even today in difficult markets, you will see integrated behaving always, of course, in the interest of their own companies. And for us, as an independent player, the interest of our independent customer or integrated customer is, of course, key. So that's also a very important issue to get in. And those are basically the two biggest one. As I told you, the product is a commodity, and we were extremely lucky with the product from Bruck because we were basically in spec very fast. So the product is also accepted really well and really fast, and that was also an advantage. But people do understand that when you start, there will be beginning issues. So -- but the fact that it was good right from the get-go really helped us well. So those were basically the 3 main issues. And when it comes to the market and when it comes to pricing, yes, we have to move along with whatever the market does. Does that answer the question? Perfect.

Thank you to Marleen. Any other questions? I don't see any hand raised. Okay. Thank you for the presentations. And it has been a deep dive into Norske Skog's business and operations. And thank you for being -- attending here today. And the next webinar will be on 8th of February, and we will have published the quarter -- the fourth quarter results at 7:00 in the morning. And at 8:30, we will have a short webinar based on that presentation. So 8th of February is the next time you are able to see and talk to the management of Norske Skog. So thank you for today, everybody attending.