Svenska Cellulosa Aktiebolaget SCA (publ) (SCAB) Earnings Call Transcript & Summary

Welcome to SCA's Capital Markets Day 2022. It's been 2 years since the last Capital Markets Day, and a lot have happened since then, hasn't it, Josefine?

It really has. Since the decision to exit publication paper in 2020, we have continued our growth strategy with projects such as the Obbola expansion, the CTMP expansion and expansion of renewable energy. On top of that, our forest has grown more than 20 million cubic meters and absorbed more than 10 million tonnes of carbon dioxide. That's quite impressive, isn't it, Anders?

That is quite impressive, Josefine, and we are very proud of the climate benefit that we generate. And if you take into consideration the substitution effect, for example, replacing concrete with wood in buildings or plastic with paper in packaging, the climate effect is actually even larger than that, Josefine. We will talk more about sustainability later, but what's more on the agenda today?

So we will hear a presentation from our different business areas and make deep dives in renewable energy and forest operations. We'll also look into our expansion projects and give you a quick recap before opening the floor for a Q&A session.

But first, let's take a bird's eye view of our strategy going forward and our direction for the future. With us here today, we have Ulf Larsson, President and CEO of SCA. Welcome, Ulf.

Thank you so much, Anders. And I'd like to start with this slide because when we did the split of the SCA company back in 2017, I said that we have 2 components for value creation: and the first one was to grow the forest; and the second component was to increase the value from each tree. And if we start with the forest, we shall and should, of course, continue exactly in the way that we've done in the past. I mean, today, we have almost 75% higher standing volume in comparison with what we had back in 1950s. And at the same time, we harvest more or less 150% more than we did at that time. And we shall, of course, continue to buy forest land. The second component for value creation was to increase the value from each tree. And at that time, we said that we should grow our pulp and kraftliner business. We should also continue to develop the good work that we were already doing in renewable energy. And last but not least, we should also reduce our exposure to publication paper. In 2017, I also presented this, let's say, projects staircase just in order to be a little more -- a bit granular in how we should achieve our strategic goals. And if we start to the left-hand side with the Östrand project, that one was already decided when we did the split of the company, but it was ramped up 2018. This project has been a success, I must say, and it has also been financed through our operating cash flow. If we -- when we did the split, we also realized that the value of the forest was underestimated. It was more based like on historical acquisition values. In 2019, we started to valuate the forest based on transaction prices in the region where we are present, and I think that has been very helpful to visualize the real value of the forest. 5 years ago, we had less than 3 terawatt hours of installed capacity of wind power on SCA land. And according to the plan, next year, we will reach 9 terawatt hours. The long-term target is, today, 11 terawatt hours that we should reach around 2025. In September 2019, we took the decision to go for another mega project, the biggest kraftliner mill in the world in Obbola. That was another SEK 7.5 billion investment. We said that this one should be up and running in the first quarter next year. And as already communicated, we started this line already the fourth quarter this year, before schedule and according to budget. At the same time, we have also increased the capacity of white-top kraftliner during this period. In the spring 2020, we first realized that we had a pandemic in Sweden. And overnight, we lost more or less 30% of the consumption of publication paper, and we took immediate actions. We decided to close down our 3 remaining paper machines, and that was also done in the first quarter 2021. At the same time, we took the decision to invest SEK 1.5 billion in the new CTMP line based on the Ortviken site. And the reason for that was, of course, first, that we believe in CTMP as a product; secondly, that we could make this investment in a very cost-efficient way as we could use a lot of the old equipment on Ortviken site. But maybe most important, but also that we could prepare the Östrand mill for further capacity expansion. During this period, we have also started up a strategic cooperation with the Finnish company, St1, in liquid biofuels. We have also taken the decision to go for a new bio-refinery in Gothenburg, and that one will be up and running Q4 next year. The total capacity in this mill will be 200,000 cubic meters. The volume controlled by this joint venture will be 100,000 cubic meters. 3 years ago, we took the decision to start up a program for acquiring forest land in the Baltics. We said that in 5 years' time, it should reach 100,000 hectares. And up until today, 3 years after the start, we have reached approximately 60%. Last but not least, we also, 2017, saw that we should have a further potential for capacity increase in Östrand, and we are prepared. We have prepared for that step, but we haven't taken the decision yet. We also saw that we had a big potential for building up a new bio-refinery based on solid biomass and, from that, go to liquid biofuels. We have the environmental permission today. We have also started to build land, but we haven't taken the final decision to go for the second bio-refinery. The measures that have been taken has strengthened our competitiveness, both in relation to our peers, but also in absolute terms, as you can see in this slide. And it has also contributed to a fossil-free society. And let's start on the left-hand side on this picture with the forest. And as you can see here, we have a net binding capacity in SCA forest of a little bit more than 5 million tonnes of carbon dioxide per year. How can that come? Well, the gross growth in SCA's forest is around 10 million tonnes annually. We harvest around 5 million cubic meters per year, and we have some windfalls. We also do some pre-commercial thinnings and things like that, so that takes away another 1 million cubic meters. But the net growth is around 4 million cubic meters per year, which corresponds to 5.4 million tonnes of carbon dioxide. The reason is, of course, that we -- when we harvest an old tree, we replant with 2 to 3 new ones. We are quite intensive when it comes to our silviculture operations. So we do pre-commercial thinnings. We spend some money into fertilization and so on. Even more important is the substitution effect, as you can see on the right-hand side. And last year, it amounted up to close to 6 million tonnes of carbon dioxide. And here, I mean we are replacing non-renewable fossil products and material with renewable products. And here, we're talking about paper instead of plastic. We're talking about solid-wood products instead of concrete and steel. And we are talking about bio-energy instead of fossil fuels. And last but not least, we always try to reduce our emissions. And in 10 years' time in SCA, we have gone from a little bit more than 2 million tonnes of carbon dioxide per year down to less than 1 million tonnes. So if one summarize, in 2021, SCA's climate benefit was a little bit more than 10 million tonnes of carbon dioxide, which corresponds to emissions from all Sweden's passenger cars. This year, we have done a more thorough review of our strategy. And we still have 2 components for value creation: the first one, again, is to grow our forest; and the second one is to increase the value from each tree. When it comes to the forest, we shall continue to take care of the forest in the way that we have done in the past, and we shall continue to buy forest land that we have done in the past and that we will continue to do also in the future. We have some limitations for buying forest land in Sweden. So by that, we have said that we can also buy forest in the Nordic countries, but also in the Baltics where we have already started up a program, as I mentioned earlier. When it comes to the second component for value creation, to increase the value from each tree, we have said that we should focus on pulp, containerboard, but during the coming period, also in wood. And as, again, already communicated, we have launched a feasibility study together with Holmen in order to see if we have conditions for a mega mill in Västerbotten, a really interesting project, I believe. And then we have also said that we should go from just developing business opportunities within renewable energy to realize them. In the coming years, we will have 3 focus areas. And if we start from the bottom, I think it's super important to take care of what we already have: to maintain our superior asset quality. So that, we will continue with. The second one is to deliver on already decided and ongoing projects, and you know them all. I mean the kraftliner project in Obbola, the CTMP expansion, the acquisition forest -- program for forest land in the Baltics, the biofuel project together with St1, the Bollsta sawmill project in [ Västernorrland ] and so on. But then number three, to the right-hand side, you can also see that we like to continue to capture opportunities for organic growth, and I mean we have talked a lot about wind. From now on, we are ready to spend our own money into the wind business. We might do some acquisitions. We will absolutely start up some organic projects, but maybe most important is the potential that we have in repowering, and we will come back to that. We also definitely see some further options and potential in debottlenecking in our pulp containerboard business. We have already been talking about wood and what we are doing there. In renewable fuels, we will start up the bio-refinery in Gothenburg. But as already mentioned, we are also looking into further potential in close connection to Östrand. And last but not least, we will continue to buy forest land, as we have always done. I will finalize with this slide, just to show you that we will continue the transformation that we have started up, but we will remain the balance between the forest and the industry. Before the split of the SCA company back in 2017, we were an industrial company with forest, not too much focus on the forest asset. After the split, we have been focused on making the forest value visible. And the next step, among all other things that we will do, is to realize business opportunities within renewable energy. Thank you.

Thank you, Ulf. We make use of the entire tree and create the most value of our land. The forest is the core of our business. And around it, we have built a well-invested, integrated value chain. So let's take a closer look at how we make that happen. [Presentation]

Now I would like to present our CFO, Andreas Ewertz, who is going to talk more about how the value chain and our project portfolio contribute to our growth. Welcome, Andreas.

Thank you, Anders, and hello, everybody. I'll start off with our integrated value chain with high sales efficiency, which helped to offset cost inflation. And if we start with wood sourcing to the left, which is our biggest cost, we consume around 11 million cubic meters. We get around 50% from our own forest and ships from our own sawmills. We get 45% from local private forest owners and 50% from external suppliers. In electricity, we are almost self-sufficient post exit publication paper. We consume around 1.7 terawatt hours. At the same time, we produce 1.4 terawatt hours internally. We have wind leases, which are linked to the electricity price and brings down our net exposure to only 5%. Solid biofuels is our largest energy source and produce around 12 terawatt hours. Of this, we use 9 terawatt hours internally, and we have a surplus of 2.5, which are sold as district heating and pellets. We have our own logistics company, which have been a clear advantage during the pandemic. We have 3 owned RoRo ships and our own terminals in Sundsvall and Umeå. We also have long-term leases in Kiel and London. And the total, around 40% of our logistics revenue goes for our own ships and terminals. Lastly, we have transportation fuel where we have a total exposure to around 100,000 tonnes of bunker oil and diesel. At the same time, we produce 45,000 tonnes of tall oil, which price is linked to the oil price, plus our green premium, which brings our sales efficiency to over 45%. To summarize, our integrated value chain has helped to offset cost inflation and contributed to our high margins, which we can see on the next slide. Price increases have dropped down to EBITDA. On this slide, we have the EBITDA bridge within the first 9 months this year and the first 9 months last year. And if we start with price/mix to the left, it had the biggest impact of SEK 2.5 billion, with higher raw material costs of only SEK 550 million. And we had a positive impact from lower energy cost, which really shows our high sales efficiency. In total, EBITDA increased with 30% to SEK 8.2 billion and corresponding to a margin of almost 52%. The [ cider ] projects more than double EBITDA since the split and have been financed with operating cash flow. On this slide, we have the EBITDA contribution of previously announced investments, and this is assuming long-term trend prices and a normalized currency. And if we start to the left, we have an EBITDA ranging from around SEK 3 billion to SEK 4 billion before the split. We doubled pulp capacity, which has increased EBITDA with over SEK 1 billion, assuming trend prices and even more in the last 2 years. We have closed our publication paper mill and invested in CTMP production, which will increase EBITDA with SEK 300 million and has also reduced our marginal wood cost with SEK 200 million. We have a target to reach 9 terawatt hours of electricity in the end of next year of lease income, which will contribute with SEK 100 million. Kraftliner expansion in Obbola will contribute with SEK 800 million to SEK 1 billion in EBITDA when fully ramped up in 2026, and this is assuming trend prices of just above EUR 600 per tonne. And today, we have prices closer to EUR 900 per tonne. We're investing in our Bollsta sawmill, which will contribute with SEK 100 million EBITDA. We are investing SEK 650 million in our bio-refinery in Gothenburg, which will contribute with SEK 200 million and even more with current prices. We are increasing harvesting with 1.1 million cubic meters, which will contribute with SEK 200 million. The forest acquisition in Baltics will contribute over SEK 100 million and significantly more long term. We are investing in Sundsvall Harbor, which will reduce our logistics cost. And we're investing SEK 90 million in our CNCG boiler at our Östrand pulp mill, which will reduce chemical costs with up to SEK 100 million. We also have a positive revaluation effect of biological assets of SEK 1.2 billion, which will give a cash flow contribution later on. In total, these investments have more than doubled EBITDA to SEK 8 billion, assuming trend prices. In the last 12 months, we had an EBITDA of SEK 11 billion, mainly driven by higher prices. And if all these projects have been fully ramped up and assuming 2022 prices, they would have contributed with an additional SEK 3 billion. On the next slide, we have our capital allocation strategy, which can be summarized into 3 parts. First, we want to continue to increase in profitable growth. And here, we want to invest in and around our value chain, as Ulf mentioned. Higher profit also enable increased dividend, and we have a target to have a stable and increasing dividend over time. And lastly, we want to have a healthy balance sheet and maintain an investment-grade credit rating. Thank you. With that, I hand back to you, Josefine.

Thank you, Andreas. To follow up on that broader perspective, let's take a closer look at the links in our value chain. And of course, we'll start where everything begins, in the forest. [Presentation]

Let's now welcome Jonas Mårtensson, Head of our Forest Operations. Jonas, SCA's project portfolio includes several expansion projects. How will that affect the need for forest raw material now, long term and short term?

Thank you, Anders. As a result of the ongoing investment, our needs for sustainable raw material will increase. I will come back to how we plan to supply our industry in the short and the long term. When we did our first harvesting calculation in 1950, it presented a sustainable harvesting level of around 2 million cubic meters. As a result of our well-managed forest, the harvest rates has more than doubled since then. At the same time, we have increased the standing volume of living and growing trees. In the most recent harvest calculation we did a couple of years ago, higher growth than expected will enable a gradual increase of 25% in the sustained annual harvesting volume for the coming years. This will support our raw material supply for our industry in the short term. SCA has been purchasing forestland for several hundreds of years in Sweden to supply the company's value chain. In the early 1900s, Sweden implemented a new land acquisition act. It states that in Sweden, we, as a legal entity, cannot purchase forestland from private forest owners without selling an equivalent area. Therefore, we have mainly been able to increase our forestland in Sweden by acquiring companies that owns forestland. Since the 1950s, we have increased our productive forestland by 60%. In the Baltic region, companies are permitted to purchase forestland both from forest -- private forest owners and companies. That is why we, in 2019, launched a program to increase our forestland in the Baltic region by 100,000 hectares over a 5-year period. As you have heard, SCA's forest industry are growing. We have a strong and well-integrated value chain with a self-sufficiency rate around 50%, which makes us unique in the industry. This gives us the ability to maintain competitive raw material cost for our industry over time. Growth in the Baltic region is high. It is 2 to 3x higher than in Northern Sweden. By being able to increase harvesting on our own land, we will maintain a stable and increasing cash flow over time. SCA has been developing and practicing active forest management on our forestland in Sweden for a long time, which has led to a significant increase both in the volume of standing forest and harvest rates since the 1950s. With our expertise and resources, we have the ability to make the same journey in the Baltic region as we have done in Sweden. If we look at the cost of forestland in the Baltic region, it is marginally higher than in Northern Sweden in terms of euro per hectares, but considerably lower than in other parts of Sweden. On the other hand, as I mentioned, growth potential is much higher. This means that the cost of investment in relation to the growth is very attractive. Since we launched the land acquisition program in the Baltic region, we have acquired just over 60,000 hectares of forestland. This means we are in line with the target we set 3 years ago. We initially acquired some larger portfolios of forest, but have also completed a large number of smaller transactions with private forest owners. The price of smaller objects from private forest owners are considerably lower than larger portfolios that are purchased from forest-owning companies. Based on the price levels of major transactions, in the last year, the value has increased by 40% to 50% compared with the purchase price for our completed acquisitions since we started. The higher value is partly due to the price trend for forestland in recent years, combined with the premium we see on transactions made by companies, but also, as I described, the price difference between large land holdings and small objects. We will come back to the price difference between transactions for properties that are purchased from companies versus private forest owners. As you can see from the map on the right, we own forestland across the entire Baltic region. Most of the land is in Latvia. Let's take a quick look at our forest holdings in the Baltic region. [Presentation]

We'll get back to Jonas in a moment. But now I would like to introduce our guest, Niklas Lundberg from Svefa. Niklas, you're here to tell us more about forest property markets, a subject of great interest. Welcome. The floor is yours.

Thank you. Starting with the outline. First of all, a short description of Svefa. Svefa is one of Sweden's largest property consultancies with 18 offices and more than 200 employees. We are an independent property consulting company with certified valuers specialized in all property types. Outline for today is basis of data for the study; description of market development for private investors and legal entities and property size; and three, value-affecting factors. Basis of data is Svefa's sales comparison database. Svefa has 20 years of nationwide transactional data for forest properties with very detailed information since 2010. There are thousands of sales registered with forest data gathered from investment memorandums. Each transaction has been analyzed by Svefa's property valuers. The data enables extensive analysis of market trends, impact from different value-affecting factors and the step reduced by property valuers in valuation reports. If you're interested in learning more about the Swedish property market, please visit svefa.se. Market development for forest properties in Northern Sweden. This chart is privately owned forest properties sold in Northern Sweden, a large study area with ranging market conditions. First of all, we see a strong positive market trend. Second, looking at the sales, there is a distinct price floor slowly rising over time, starting at SEK 150 in 2016. This price floor is now at SEK 200 per forest cubic meter. Three, there is a high range or amplitude upwards. This highlights that each transaction has individual price driving factors. Four, there is a clear year seasonal pattern in the data. Forest properties in Northern Sweden are generally placed on the market from late spring until early fall, and each transaction is completed with the registered deed in the end of the year. The most recent sales indicate a slowing and more stable market. It is, at this point, too early to determine exactly what this means in the market other than that the final months will be extra interesting to study. If we look at the same data set for Southern Sweden, we see the same pattern, except that there is no seasonal pattern. Positive market trend, number one. Two, the rising price floor, no trends are noted below SEK 600 line. And three, increasing value amplitude upwards, especially the last years. Staying in Southern Sweden, we add legal entities to the chart. So this chart is basically the same data as the previous picture, the addition of legal entities shown as red bubbles in the chart. The size of the bubble is proportionate to the sales price. There might be additional transactions between legal entities that we do not know of. They are much harder to identify and more commonly sold as off-market transactions. As you can see, there is the willingness to pay higher values for forest sold as legal entities than privately owned. A very brief background to price difference. As Jonas explained in the previous presentation, the purchase of forestland in Sweden is regulated in the Land Acquisition Act. This law results in the very limited supply of forestland that may be easily purchased by legal entities. This very limited supply results in a value markup for the transactions between legal entities. A few comments to the chart. There is a clear distinction between forestland sold between private individuals and legal entities. The red line is parallel above the yellow line with a markup. There is a stable value relationship since many years. The largest bubble is the Stora Enso sale in Holland, that's SEK 940 million in December 2020 at almost SEK 1,200 per forest cubic meter. The effect of sale as legal entities and the size premium are hard to separate due to a low number of transactions, but there is a combined positive effect. The effect, of course, depends strongly on the specific property, its location, its size, forest inventory, the number of bidding parties, et cetera. In this chart, we also noticed that there are no registered sales this year with no ongoing sales. But at this point, they are not finished yet. Moving on to Northern Sweden, we see the same data set. The largest bubble is the Nora transaction in the fall of 2020. The purchase price is not disclosed, but our estimation is SEK 1.8 billion based on annual reports. Left is the transaction of Östmark, Värmland at SEK 95 million. And right is the SEK 73 million sale in [ Östergötland ]. Except these sales, there was also, in 2019, the sale of 89.9% of the shares in [ Bärby ] to own a [ pension ] company, and this was done at SEK 12.2 billion. In the chart, we notice that in the beginning of the chart, there was no value difference between privately owned properties and legal entities. The markup began in 2017. And from 2018, the markup has been rising. And the markup is today at levels of approximately 40% to 50% in Northern Sweden compared to private transactions. To the state during 2022, there's only one registered transaction of legal entities. This makes interpreting the data a bit more difficult. In September, the company of [ Seacrest Gold ] was sold at SEK 46 million, correlating to price level of SEK 500 per forest cubic meter, and this is the bubble at the right side of the chart. When interpreting this data, some caution is necessary due to the low number of observations. We do not want to extend the rising pale trend line for legal entities due to the lack of observations. Instead, if we look at the regression line from January 2019, the dark-red line, we see that the trend line is parallel to the yellow line for the private transaction. Our rendering of this is that the market for legal entities in Northern Sweden is becoming more similar with Southern Sweden and establishing a more stable markup compared to the private transactions. Looking more closely at the 5 largest transactions in the material. The basis is the entire material of all 75 sales of forest between legal entities. Each sale has been compared to the average value for sales between individuals in the respective county, and quotas are studied. From this material, we studied the premium for legal entities compared to the private market. In the next step, we then compare the 5 largest sales to the material to the 75 sales. If we look at the bar chart with these historical transactions, we have a premium for legal entities ranging from 30% to 55%. On top of this, there is also the premium for the largest transaction to reach the transaction price. These 5 transactions display size premiums in the range of 5% to 15% on top of the value premium for transactions between legal entities. To conclude the material, these transactions indicate that the combined value premium for a large transaction of forestland in Northern Sweden that may be purchased by a legal entity can be estimated to approximately 140% to 155% compared to a normal-sized forest property sold between private individuals. The indicated level of 140% to 155% value premium is based on the now available sales material. The value premium varies between legal entities and the size of the object and has to be individually assessed. Value-affecting factors, why do we see a rise in the premium in Northern Sweden right now? There is a strong belief in investing in Swedish forest properties from many parties, combined with a limited number of occasions and properties to invest in. There are many actors in the markets ranging from small local entrepreneurs to large international investors. We see financial forest funds such as Silvestica. We see pension funds, both Swedish, such as OMF and International. We see industrial forest and pulp corporations primarily seeking wood supply for their industries. We see property developers buying and sometimes holding for future development and trading purposes. For some of these categories of investors, there is the element of risk diversification from the stock market and other property categories and enhanced focus on portfolio diversification for large-scale investors. During the last year, there has been also rising interest from parties seeking investment to hedge or protect from inflation. Others invest for a stronger sustainability profile and possibly future return from carbon sequestration. These factors are hard to recognize individually in each investment, but altogether, Swedish forestland is viewed as a solid investment by many potential buyers. And this, in combination with a limited number and location of properties to invest in, is the main influencing factor increase in the premium in forest investment for legal entities and the premium for property price in Northern Sweden. If you get the opportunity to invest in a large property, instead of searching for years and slowly building a portfolio, investors are simply more willing to pay a premium for this today than 5 years ago. And this concludes my presentation. Thank you.

Thank you, Niklas.

Thank you. [Presentation]

Welcome back, Jonas. We just heard from Niklas from Svefa talk about forest valuation. And now you will tell us about how we value our forests at SCA.

Thank you, Anders. The value of SCA's forest assets is based on the sales transactions in the area where SCA owns forests. We use official price statistics from the 2 largest independent property consultant companies in Sweden. The vast majority of the transactions comprise private purchase and sales, in other words, smaller objects. To create stability in the valuation, we use a 3-year historical average to calculate the value of our forest holdings. By the end of June this year, the average price was SEK 342 per cubic meter, which gave us a healthy headroom in relation to current market price around SEK 400 per cubic meter. As shown on the previous slide, we currently estimate the value of our forest to be SEK 342. As I said, this is based on a large number of smaller transactions, mainly between private individuals. In Svefa's presentation, we just saw statistics that show a premium of about 30% to 40% for forestland purchased and owned by companies. In addition, they also show a premium about 5% to 15% for large landholding transactions, a size premium. Based on these statistics, there is a potential for a 40% to 55% higher valuation of our forestland than the present. Forestland generates long-term value in many ways. This graph shows the total return on forestland in Sweden since the 1950s. The average increase in the value of forestland has been about 6% per year over a period of almost 70 years. We can also see how the increase in value has remained stable throughout this entire period despite a number of recessions. Active forest management has enabled us to increase harvesting rates, generating an annual yield of 3%. Moreover, the standing volume of forest is increasing every year despite the increased harvest rates. These 3 aspects combined have generated an annual total return of about 10% since the 1950s. This is how long-term value is created with the force of the forest. This completes my presentation.

Thank you, Jonas. SCA has come far in its sustainability work, generating a yearly climate benefit of more than 10 million tonnes of carbon dioxide. We have also started an ambitious initiative to preserve biodiversity. One person who can tell us more about this is Hans Djurberg, Head of Sustainability. Welcome, Hans.

Thank you, Josefine.

Many people talk about how the world's biodiversity is challenged. What's your view on that?

Well, it's true that we often hear quite concerning news about biodiversity in mainstream media. And concerns are raised by many stakeholders ranging from intergovernmental panels, civil society and not least the local activists. And concerns are often about the loss of biodiversity. We hear numbers like 1 million species being at the brink of extinction. We also hear about the link between climate change and biodiversity loss and the resilience of ecosystems. And this is a great concern to many people, including the scientific community. But what about forest in Sweden and forest at SCA in particular? Let's have a closer look at that. But before we do, we should realize that monitoring biodiversity is problematic. It's quite difficult, actually. Monitoring species' abundance is difficult, especially when it's about species that are rare or mobile or even sometimes invisible. And this is a challenge that we face when we monitor and try to work with that biodiversity. One way to get around that is to look at features instead, features in the forests that we know are important to biodiversity. And on the slide here, you will see a set of such features using data for Sweden. On the bottom right-hand corner, you will find the standing volume of forest in Sweden, and you can see a steady increase from 1955 and onwards. So there seems to be forests around. On the left-hand bottom side, you will find the area of old forests in Sweden, and you can see an increase steadily from 1995 and onwards. And the top chart, the top line there is including protected areas in Sweden. On the top right-hand side, you will find another very important feature for biodiversity in forests, and that's dead wood. You can see the steady increase from the 1980s and onwards and the volume of dead wood in Swedish forests. And last, on the top-left hand, you can see the average size of cutting areas in Sweden, which is believed also to influence at least some of the species that are found in forests. You can see a decline -- a steady decline, actually, from the 1970s until today as far as the average cutting size is concerned. So -- but what are we doing then in SCA when it comes to managing biodiversity? First of all, biodiversity conservation is nothing new. It's something we have actually included in our forest management since 1987. And traditionally, we often monitor biodiversity conservation by monitoring the area we do not manage, so what we call as set-asides. But over time, we've realized that this is quite a blunt tool to use. And instead, in 2019, we tried to find a way to increase our precision and quality in the nature conservation efforts. And this is when we started looking at real data on real species, if you will. And we reduced the best available data presented by the IUCN called the Red List. And the Red List actually represents species that are in decline. For one reason or another, the populations are decreasing of these species. And they may be rare to start with or there's something in the environment that actually causes the populations to decrease. And this list covers all of Sweden, so from the very southern tip to Northern Sweden. So what does the list actually tell us if we look closer at the list? Well, first of all, the list includes some 20,000 species. And out of these 20,000, roughly 20% are red-listed, so under some degree of threat. Now of these 5000-or-so species, roughly 40% are affected by forestry. So they are found in forests and they are affected by forest management. And what we have done in SCA is really to look even closer at the list and try to understand, so what about Northern Sweden? How many species are actually found in Northern Sweden where we have our forests and are, at the same time, negatively affected by forest management? And this gives us a list of 203 species, and we call this list our Species Commitment. And what we've done based on that list is also to identify a dozen-or-so habitats that these species are dependent on for their long-term survival. And if we again look a little bit closer to that, how do we manage for biodiversity in SCA forests? Well, first of all, one has to realize that there's one thing that's more important than anything else when it comes to forests and biodiversity in Sweden, and that is fire. The forest landscape is shaped by fire over thousands of years, and all species are adapted in one way or another to fire. They can either be adapted to thrive through fire or they are doing their best to avoid fires. But in one way or another, all species are adapted to fire. And our forest management approach also follows this logic. We try to mimic fire when we design our forest management methods, and this includes how we define our management methods for biodiversity. We have tried now, with the support of our Species Commitment, to define habitats that we manage for that are important to those threatened species. And those are habitats like burned pine forests, deciduous forests and also open sunlit pine forests. All of these are actually habitats that are created by fire. But since we have done our best to avoid fires in the forest landscape, they have become rare, and therefore, we need to manage for them. And this is the core of our approach to biodiversity conservation. Last, but I would like to just summarize our approach to biodiversity conservation by simply showing you 4 categories of measures that we do to conserve biodiversity. On the top-left hand, you will find our voluntary set-aside. This is where we focus 100% on biodiversity. We retain 100% of the forest, simply setting it aside for biodiversity conservation. On the right-hand top side, you will find what we call combined targets. This is where we put equal weight to biodiversity conservation and wood production. And it means that we retain roughly 50% of the volume and then we manage for biodiversity. And this includes areas that we burn, such as you can see on this picture. We burn the forest to create habitat for biodiversity. On the lower left-hand side, you will find what we call adaptive retention, and this is where we manage forests specifically for certain species. And this means we retain some 15% to 30% of the volume in those forests to care for particular species. And in the bottom-right hand, you will find what we call basic retention, which is basically the rest of the forest. We manage it by setting aside buffer zones, caring for individual trees as well as tree groups to create structures and features important for biodiversity in the forests that will grow up in the future. So this would be, in summary, our approach to responsible forest management. Thank you.

Thanks a lot, Hans. Now let's take a look at some real examples on how we preserve and protect biodiversity in our forests.

So welcome to the heart of SCA: the forest. Right here is the foundation of our business, our expertise and our passion. Now we're going to meet [ Ula ] and [ Anna ] and talk more about how we create growth with sustainable forestry. Ula, in what way does a sustainable forestry contribute to a sustainable business?

Well, for SCA, a sustainable forestry means that we both produce wood and other values such as biodiversity and social values, et cetera. And for biodiversity, we use conservation measures in order to secure the habitats of the 203 red-listed species. And for wood production, we use active forest management to increase the amount of wood that is produced. And this wood can be utilized in our business, in our products and, thereby, it can substitute fossil-based products, which is very good for the climate. And the order of magnitude of this substitution is the same as the uptake that we have in our forests. So it's very dramatically high.

Is this unique for Sweden?

No. In the Baltics, where we have forest assets, we are using the same high standards as in Sweden. And the aims, they are the same, that is to utilize the growth potential of the forest, care for biodiversity, of course, and also produce a lot of wood that can be used for climate-friendly products.

Anna, could you give us an example of what we really mean by sustainable forestry and biodiversity?

Yes. Here, I can give you an example of active conservation measures. In this case, we have -- within the SCA Species Commitment, we want to both preserve and develop habitats for different kinds of species. So in this stand, we have harvested Norway spruce trees, but left all the deciduous trees like birch and aspens, which are very important to many species. This is one example. Another example would be general conservation measurements, which we do at all final filings. For example, we leave single conservation trees that are either old or rare. We also set aside conservation patches and buffer zones along lakesides or streams or wetlands. So these are just 2 examples of what we do for biodiversity within our forestry.

Thank you, Anna. Well, I don't know about you, but this is new knowledge for me. And now back to the studio.

SCA is a leading producer of renewable energy. Byproducts from our sawmills as well as branches and tree tops from the forest become biofuel and pellets that can be used in our own industrial operations or sold to external customers. SCA is also working together with Finnish St1, and we are building a bio-refinery in Gothenburg. SCA is also an important actor in wind energy with about 20% of Sweden's installed wind capacity on SCA land. Starting next year, renewable energy will be a new reporting segment. To highlight this growing new segment, we have invited Mikael Källgren, Head of Renewable Energy, to tell us more about what is coming up. Welcome, Mikael.

Thank you, Anders. Hello. As Ulf presented, we have an updated strategy within renewable energy, moving from developing our position to execution. The purpose of my presentation here today is to share some more color and light on our strategic foundation and execution plan. Let's start with some high-level logic. We all know that net-zero policy will shape demand for renewables for a very long time. And if you look at this slide to the left, you recognize the decrease in CO2 emissions from the IPCC report from 2021, showing what is needed in order to keep the 1.5-degree target. A few weeks after the IPCC report, the IEA, the International Energy Agency, presented their report, a road map towards net zero. And to the right in this chart, you'll find a summary from that report showing how we need to move away from fossil fuels towards renewable in a rapid pace. From an SCA business point of view, we recognize that we have competitive advantages in several of these areas, especially wind power, biofuels and potentially e-fuels. So our strategy is grounded in 2 pillars: first, the rapid growing markets within renewables driven by net-zero policy of fighting climate change; and the second is our strong competitive advantages within these areas. If we move and look and transform this development into growth charts and start to the left with renewable electricity generation, you can see the high growth numbers within wind and solar. This is driven by light due to vehicle transportation, industry processes and low-temperature heating. In the middle, you can see the double-digit growth rates expected within biofuels, driven by transforming hard-to-bait sectors like aviation, maritime and heavy-duty transportation. Finally, to the right, you will see the high-growth rates of hydrogen and e-fuels in order to transform not only the same hard-to-bait sectors as within biofuels, but only industrial processes. If you look at why will SCA win in these markets, we are uniquely positioned to capitalize on this transformation towards renewables. And if we start with wind power, we are the biggest private land owner in Europe, and with that comes a lot of areas with really good wind conditions. We also have, as Anders mentioned, 20% of Swedish wind power on our land, with currently land lease agreement with a starting point and an end point and a built-out grid infrastructure. Finally, we have experience from co-developing projects together with others or on our own. Within biofuels, we have access to those feedstock that are required to produce advanced biofuels according to renewable energy directive or, if you like, the second-generation biofuels. We also have existing infrastructure in place. We have harbors, we have utilities and sites and relation to key technology suppliers and partners. And as you know, we have chosen not to do this journey on our own. We have entered a partnership with St1 and we are about to construct, as we speak, the first bio-refinery down in Gothenburg. We also have competitive advantages within e-fuels. If you want to produce an e-fuel, you need access to low-cost renewable energy. We have that not only in our area of Europe, but only -- also by entering into wind power as a producer. We also have access to biogenic CO2 in large amounts. And finally, the competence needed to build and running large-scale processing plants. This is nothing that we're focusing on today. It is a future opportunity. But by entering into the wind power business and the biofuel business, the leap towards e-fuels is -- will be smaller and smaller over time. So let's start with wind power. A slide on the characteristics around wind power profitability. And I would like you to look at the chart to the left, which is the classic value creation and derisking curve for our wind power project. Today, normally, a developer develops a project from starting point. They secure permits, land lease agreement, route-to-market, financing, EPC contract. And after that, they normally sell this project to a long-term investor like an infrastructure fund. And at financial close, they extract almost 95% of the net present value, leaving a derisked asset to a long-term owner with quite a low profitability, but also lower risk. However, if you do this by yourself, and look, you develop this project through the same phases, once facing the final investment decision, you will find a project with a double-digit IRR as the market is today. So it's quite clear that participating in the development phases of a project ensures the highest return. And for SCA, this is about control, getting access to the full potential value of wind power on our land. And if you look to the right in this slide, you will see our view on how we will build up our portfolio. We will be striving for the areas where we have the biggest competitive advantages and the highest profitability, and that is doing organic development ourself or together with others, doing repowering ourselves or together with others. But we will also look at M&A not for merely the cash flow of existing lifetime of that asset, but to position for repowering. So from an SCA perspective, our new strategy is about moving away from leasing out our land to others to taking control of all wind power development on our land from now on forward and building up a portfolio. So why now? Well, if we look at this slide and start from the bottom, you can see that we have successfully built up a land lease portfolio on our land during the last decade. We met our 2020 target, aiming for 5 terawatt hours wind power on our land, and we're now moving in a steady pace toward 11 terawatt hours by 2025. Already today, with the wind farms that are under construction on our land, we know that we will exceed the 9 terawatt hour sub-target by 2023. But during this period of time, a lot of things have happened. If you start in the top of this slide, we can see that global levelized cost of electricity from onshore wind has gone down its cost curve in a quite dramatic way. Today, onshore wind power is, together with solar PV, the most cost-efficient way of generating power on a global level, regardless if it's renewable or not. So the competitiveness of onshore wind is dramatically changed compared to previous decade. If you look at the electricity consumption in Sweden during the same decade, we can see that we have had a slightly decrease over time in consumption. But we foresee that this will change. There are prognosis from [indiscernible] and other institutes that expect a double consumption in Sweden next 20 years. And that will be a huge difference in the market, and the demand for renewable power will go up. And with that, we will see more healthier price levels than we have seen the last years. So to sum it up, the cost of production for onshore wind is going down and continues to go down. The consumption in the northern part of Sweden will go up. And with that, we will see higher prices than we have seen before. If we continue and look at -- okay, if we have a doubling of consumption and demand of power in Sweden, how will we supply it? And I think we are facing quite big challenges here because we have never built as much wind power as we do today on a 5-year average. However, if you look at this graph, the project pipeline is going towards real low levels just in a few years. And right now, it's really hard getting permits for new onshore wind. So we're facing a scenario that if nothing changes from a policy and process perspective, there will be a shortage of wind power project greenfield. And from an SCA perspective, we feel like if this happened, we will focus more on repowering. Because if we can do more with less on our existing brownfield wind sites, we will contribute and focus our business on that part of our portfolio. However, if incentives for our municipalities are created and the permitting process are eased, we have a huge potential of developing a new organic wind power portfolio on our land. And if this happened, we can put our resources and focus a little bit more on this part of our strategy. So my bottom line point is when having control of our portfolio not only from a repowering perspective, but also from organic development, we can adapt depending on how the future will look like. And to give you some color on how big is the potential on organic growth and development, we have the next slide. Within -- as I mentioned in the beginning, with our competitive advantages, we have access to big land areas with good wind conditions. Our full potential is around 60 to 65 terawatt hours until '24 to '25. However, with today's restriction in the process and policies, as you saw in the previous page, this is reduced from municipality to a reindeer husbandry and over-implementation of nature conservation, and we have defense and civil airports restricting wind power expansion. So we have, in the low case, a net potential of 15 terawatt hours. But the point here is that we will shift our focus depending on how this will play out. And the point is also that if the processes are eased, which we believe they have to be in order to keep up with the demand in renewable power, we have a huge potential to build up our organic portfolio on our land. Finally, I would like to say something about repowering. Repowering of existing wind farms on our land represents a major opportunity. And what is repowering? Repowering is where you change the turbine size, you take away the old turbines and exchange them with new. And if you remember the cost curve, you can understand the leverage you get when you exchange old turbines that are inefficient from 2010 on around 2 megawatt, 2 future turbines that has gone down the cost curve and with the size around 10 megawatts. And we have calculated an example on a wind farm with 50 2-megawatt turbines that was built effective 2010. That wind farm produces around 250 gigawatt hours. And if you continue to run this wind farm through its technical lifetime, you will get the net present value around SEK 400 million. If you instead apply for a new permit with modern turbines and you get it approved and slightly after 2030, you take down the old turbine, you can exchange those 50 2-megawatts with 20 10-megawatts turbine. And by that, you will produce more than double the amount of energy on the same land area. And the cost level in your production will go down quite dramatically, and the cash flow will go up. And you can see the difference in net present value compared to just running this existing asset through its lifetime with repowering, and it's kind of 4x the NPV. And this means that if there are M&A opportunities, we will look at those on our land. We will look at those as well because for us, as a landowner, we can unlock the value of a new land lease agreement for the next 50 years and do repowering. So with that, we will go to [ Lindesberg ], where we will meet Jon Persson and Anders Edholm. See you in a minute.

We are here in [ Lindesberg ] in the northern part of Sweden. And with me here today, I have Jon Persson, Head of SCA's Wind Power business. And he will tell us more about wind power generation and why this is important to both society and to SCA. Jon, we're standing here in front of this gigantic wind turbine. Tell us more.

This turbine here, it's one of the turbines at the site called [ Lindesberg ] where we are today. It was a site commissioned in 2019, contains 18 turbines like this, each with a capacity of 3.8 megawatts. It has a tip height of 180 meters, and all of this was commissioned in 2019.

And why is this so important to society, this fossil-free power generation?

This particular site is, of course, important for the Swedish systems since it will keep delivering power to the grid for well over 30 years from now. But then if you speak about onshore wind power on a more general basis, it will become increasingly important for the Swedish transition. That is for 3 reasons, really. One, it's the most cost competitive source of power that can be constructed in Sweden today, if you include the cost of capital. Two, it's a sustainable source of generation. And three, it can be constructed relatively fast in order to meet the rapidly increasing demand for renewable generation capacity or renewable power that we are experiencing today, not least here in Mid and Northern Sweden where we have a lot of industrial establishments planned over the next coming years.

And why is it important to SCA?

It's -- if you look at the growth outlook, we are expecting a doubling in power consumption in many scenarios up until 2050. That means that we have to add a substantial amount of new generation capacity. And during this period, we also need to replace a lot of the existing capacity that will simply get too old. And this is a great growth opportunity for SCA. All the land that the SCA owns today, which is 2.6 million hectares, a lot of that is very well suited for renewable generation. And if you look at all the existing wind power that are on SCA land, which is roughly 20% of the total installed capacity in Sweden, that posts a great repowering potential for SCA as well once the existing land lease agreements sort of comes to an end over time hereon.

You mentioned repowering. Maybe you can explain that concept to our viewers today.

Yes, repowering is really to do more with less. So if you look at the installations done in 2010, it could -- many of them were made with 2-megawatts turbines. And if you look at what -- where we will probably be around 2030, we will be at 10 megawatts per turbine maybe. That means that if you have these old sites with maybe 50 2-megawatt turbines with an accumulated capacity of 100 megawatts, you could rebuild the same site in the future maybe with 20 10-megawatt turbines. And by that, you will get the double capacity still using less than half of the turbines. And if you look at generation output, you will even get more than double the output since the new wind turbines are much more efficient than the old ones. And all of this, you can do still utilizing the existing infrastructure on sites, roads, connection points, et cetera. And all of this is a unique opportunity that the SCA can capitalize very well on.

Today, SCA acts more as a landlord for wind turbine projects. When will SCA own its own wind farms?

That will happen not in a too-distant future as we are working intensely now with a dedicated team on realizing this strategy. So I had to deal with speed as well as profitability. But exactly when it will happen, it's a bit difficult to say since we don't control all external processes ourselves, but probably soon.

Thank you very much, Jon. And now back to the studio.

And with that, we move on with biofuels and market outlook. We see that the market for renewable liquid fuels is expected to grow. In the chart to the right, you can see an outlook in jet fuel demand from World Economic Forum and European Energy Council. Transforming hard abate sectors like aviation or maritime will require liquid fuels, and as you can see in the chart, biofuels will play an important role. But it's also quite obvious that this will be a feedstock game. Somewhere in time, the feedstock for sustainable biomass will reach an end, and new technologies and ways of producing these renewable fuels will come into play. And here, you can see the expected growth also in e-fuels, as I mentioned before, is a long-term potential for SCA. But we expect an attractive market, and we can see now that quotas and mandates are being discussed to put on all aviation within Europe, and we expect new target to come into play. Single countries had already started putting mandates on aviation. So when we focus on liquid biofuels and a long-term outlook, we're looking at aviation fuels. But we have decided, as mentioned before, not to do this journey alone. We have created a partnership with St1, and we have also, within that partnership, created 2 joint venture. One in Gothenburg, where we will produce renewable fuels from liquid feedstocks like the SCA crude tall oil. And we have entered into a joint venture at our development project in Ostrand. The unique thing with our partnership is that we, by cooperating together, control the full value chain from forest to fuel station. And with that, we believe that we can handle risk and opportunities in a better way moving forward in an uncertain world. A few words about each of these projects. The Gothenburg Biorefinery is being constructed as we speak. The expected start-up will be in Q4 2023, and the biorefinery will have a yearly capacity of 200,000 tonnes. Our share from SCA point of view is indirectly 50,000 tonnes. The biorefinery is -- will have a flexible design that allows the use of a wide range of feedstocks, including our tall oil. The biorefinery will also be capable of meeting the current and future specification of renewable fuels, and that includes HVO diesel, jet fuels, as mentioned before, naphtha. This is conventional technology, and as I said before, we plan on ramping up end of next year. The Ostrand Biorefinery is a development company. It's located next to the Ostrand Pulp Mill, and since this summer, we have started the land reclamation, investing and building land to make sure that we have a ready site to put an industry on in a few years. This does not mean that we have taken any investment decision on the biorefinery. We are doing the preparatory works on the site. Our plan is to use sustainable feedstock from the SCA value chain, which we control. It's sawdust, bark, wood chips, residual forest products. And we have that in place, and we also have energy available on site. The permits are in place, and we have the right to produce up to 300,000 tonnes of renewable fuels. We are now in a stage where we're spending time finalizing the design. So with that, I'll summarize my presentation. Our main focus right now is to speed up our strategic new direction within wind power. We will develop a portfolio in all maturity phases through M&A, organic development and repowering. We are aiming of having more than 3 terawatt hours in our own portfolio within the next 10 years. In wind power, it's about, as mentioned before, taking control, entering into early phases of development. Within liquid biofuels, we will start up the biorefinery together with St1 in Gothenburg. We expect high IRR levels in this project, above 20%, and our crude tall oil will be an important feedstock in this project. In Gothenburg, we will have a capacity of 200,000 tonnes, of which SCA owns 50,000 tonnes. In Ostrand, we will finalize our design phase and do the land reclamation, and the capacity here will be up to 300,000 tonnes. But we also have an existing biofuel business today, and we will increase the value of our existing biomass up until we have new biorefineries in place. We will optimize our production of pellets, product portfolio and profitability for the solid biomass business. And with that, I conclude my presentation, and we move to Gothenburg to meet Johan and [ Oscar ], and how the project in Gothenburg are progressing. [Presentation]

Now let's move on and learn more about our strategic investments. With me here today, I have Jerry Larsson, Head of Business Area, Wood. Jerry, you are going to give us an overview of our work in your business area. For example, our investments at the sawmill in Bollsta. Please go ahead.

Thank you, Anders. Well, SCA is all about how we create value of our forest asset, and we do that through our integrated value chain. And in that value chain, SCA wood plays a crucial role. If you look upon the enterprise value of the company and divide that, as our analysts do in different parts, 70% of the asset or the value is actually in the forest and 30% is in the industry. And out of the industry, the SCA wood represents 25%. As the forest owner, the largest part of the revenue comes from the sawlog, actually around 2/3. So if we add together the value of SCA wood as an industry and the value that we put on the forest via a purchase of sawlogs, we represent almost 50% of SCA total value, and it is really dependent on a competitive sawmill industry. In the next picture, we want to show the balance between long-term demand and supply. And the view for the nearest 10 years is that the demand will increase with approximately 2% per year. How is that demand then is going to be supported? Well, it has to be supported by an increase of harvesting of sawlogs. And if we divide the world into regions and look upon the harvesting potential and begin with North America, we can see that there is an increase in harvesting potential, which gives a region imbalance. The other part of the world where there is an increase of harvesting potential is Russia. But we all know the limitations and the sanctions put on Russia the last year, so that potential is blocked by sanctions. If we move into Europe, we can see that the harvesting potential is limited or actually will decrease over a period of 10 years due to the large insect damages that we have in the central part of Europe and also possibly by conflicting policy proposals from EU. So the region of Europe will go from being a net exporter of sawmill goods to a net importer of sawmill goods over a period of 10 years. So what conclusions can we take from that? Well, there are 2, and one is that the forest is the strategic resource for the future. And secondly, that we will probably see a very good price environment for sawmill products over the next 10 years. In SCA wood, we also work with how we are able to increase the value from each log, and we want to give an example from the project that we're doing at the Bollsta Sawmill. It's divided in 2 parts. The first part is the CT-log scan, which gives us the possibility to increase the revenue from each log. We will increase raw material yield, and we will be able to optimize the product value from each and every log. Secondly, we are also putting in place the world's most efficient grading mill. And that grading will increase our production efficiency, but it will also create a base for potential increase in production at the Bollsta Sawmill up to 700,000 cubic meters from today's 550,000 cubic meters. And with that, I conclude my presentation.

Thank you, Jerry. Now we head over to Bollsta Sawmill, where digitalization has become a successful and natural way to increase efficiency but also safety for our employees. [Presentation]

Business area pulp continues its strong growth, and we are expanding our production capacity through a new facility at Ortviken in Sundsvall. Isn't that right, Kristina Enander, Head of Business Area, Pulp?

That is right. Thank you, Anders. But I will start to tell you about the global pulp market and some words about SCA's position in the pulp market. And then I will continue to tell you about the status in the CTMP project in Ortviken. The total demand for pulp in the world amounts to roughly 400 million tonnes. And the total consumption of fresh pulp is about 200 million tonnes, of which 68 million tonnes is market pulp and the rest is integrated pulp. The majority of the market pulp is hardwood pulp or short fiber, mainly eucalyptus produced in South America, but also birch from Sweden and Finland. Long fiber pulp or softwood pulp makes up 26 million tonnes, of which 50 million tonnes is NBSK, the strongest and most expensive pulp. This pulp is produced in the Northern Hemisphere, Canada, Sweden, Finland and Russia. And SCA has a market share of about 6% in the NBSK market. The total consumption of CTMP in the world is roughly 4 million tonnes. And here, SCA will have a market share of about 7% to 8% when Ortviken pulp mill is up and running. The pulp market is global and with 3 dominant geographical players. We have Europe, U.S. and China. We have chosen Europe and U.S. as our core markets, where we have 85% to 90% of our volumes contracted. In this market, SCA has its own market organization, and our ambition is to have the market's best NBSK offer in -- for tissue customers. And today, we have 70% of our volumes in that segment. The tissue market is growing by about 3% every year as the viable players and a stable demand. So if we have a leading position in this segment, we can secure a market for the production. Our assessment is that the demand for NBSK increases by 1% to 2% per year. And over time, almost all the increase will take place in Asia and mainly in the Tissue segment, but also the Board segment, including Special Paper has a healthy development, but the Printing Paper has a declining demand. Additional new capacity of long fiber until 2025 is about 900,000 tonnes. And Metsa Fibre is building a new softwood kraft pulp mill in Kemi, which will have a production capacity of 800,000 tonnes. And Sodra is planning to increase the production in the [ other ] by 100,000 tonnes. This corresponds to a growth rate of 1%, and this will give us a healthy balance between supply and demand. Regarding CTMP, Ortviken is the only non-decided additional CTMP capacity. And the latest forecast shows that -- an increase of demand of about 2.8% per year. But however, the majority of the additional pulp capacity comes from hardwood, as much as 8.5 million tonnes in the coming years. In 2020, SCA made the decision to close the Printing Paper business, and at the same time, took the decision to invest in a new CTMP plant at Ortviken with an annual capacity of 300,000 tonnes. The investment cost is about SEK 1.5 billion and Valmet is the main supplier. In 2009, SCA invested in a new TMP plant. And since the paper machines now are closed, we can use some of the equipment in the CTMP plant, for example, the top modern peroxide bleaching plant with a world-class chemical consumption figures and also refiners with low energy consumption. This ends up in the very low and competitive investment cost per tonne and also a low cash cost up and running, and this will place us in top quartile regarding cost position among the American and European CTMP producers. The CTMP market is 4 million tonnes, and it is growing. The main market or our main market will continue to be Europe. But since the market is limited, we will also establish in U.S. and China. But so far, the sales in Europe has been very, very successful, and 2/3 of the sale will go to existing CTMP and NBSK customers, and that is the strength of the project. Expanding our CTMP business, that will create an increased customer value by offering our customers product portfolio that is still based on several wood raw materials and also a broadened portfolio regarding fiber grinding and brightness. We have developed a unique birch CTMP, and that product is more bulky than other products and has a particularly interesting properties for the board customer, which is a growing CTMP segment. The expansion project began in 2020, and initially, we plan to start up the production in the first quarter of next year. But we are ahead of schedule, and we are starting up the plant as we speak. When production is stable and we have verified all the main products, we will close the plant in Ostrand. And as I told you before, this project -- with this project, we will increase the production from 100,000 to 300,000 tonnes of CTMP at SCA and also add SEK 300 million to the EBITDA. By moving the CTMP production from Ostrand to Ortviken, we will also create opportunities for a further expansion of the NBSK production at Ostrand. Next year, the annual production of CTMP totally will be between 150,000 and 200,000 tonnes. So that will conclude my presentation.

Thank you, Kristina. That's very impressive. Josefine, you were visiting Ortviken the other day, and you had a look at our new production facility for CTMP over there. Let's have a look. [Presentation]

Now I would like to welcome Mats Nordlander, Head of Business Area, Containerboard. We're in an exciting phase, making a major investment in what will be the world's largest kraftliner machine, a [ feat ] during a nearly fossil-free production process. Matt, does that mean we are phasing out fossil fuels?

That is correct, Josefine. With this project, we are phasing out the use of fossil oil in our production process which is very important, not at the least for our customer who can strengthen their sustainability work when they are using our products. Now with this presentation, my intention is to make a short recap of the logics of making this huge investment, and secondly, status report of the project in itself. We are, of course, investing into more kraftliner production because it's a profitable business. We have shown that over a long period of time, but it's also a growth area. It's a business that is growing long term, as you can see here. It's, of course, not unaffected by the general economical development, but the long-term trend is very resilient and very positive. When we made the investment, we had gone through a period of time where the growth had been 2.4% annually, and our projection for the coming 10 years or the basis for investment was based on a growth of 1.8% over the next 10 years, which would give an additional demand in Europe of 900,000 tonnes of kraftliner. And with the investment we are doing here, we can fill that gap and satisfy the needs of European demand. We are also investing into the best available technology. We made the investment, making sure that this machine would be competitive in the next coming 50 years. As you can see on this graph, we -- which is showing the width on one axis and the speed on the other axis, it is a very productive paper machine but it's also filled with the best available technology, giving us a huge development potential going forward. We are, of course, improving our cost position and we can, at least short term, strengthen our leading market position in Europe. The project. When we made the investment, we said that already year 1, that means next year, we are going to have a slightly higher production than previous year, this year, as you can see. But the ramp-up curve would be over 3 years. So our estimate is that we are going to reach the 725,000 tonnes by 2026. We are already now producing on the new paper machine and that is a project ahead of time, and we are on budget, which is very good following the challenges we have met during the project. We are now producing 24 hours per day and 7 days a week on the new paper machine, and the old paper machine is permanently closed. We are now entering into the final phase of the full project where we are investing into a new recycled paper line to satisfy the full needs of pulp to the new paper machine, and that is expected to be ready by mid-2023. And then we have the pulp capacity needed for the paper machine capacity. What has been very unique with this project is that we have been able to run the old paper machine at full speed up until we were satisfied with the productivity of the new paper machine. So we have been test running now the new paper machine for some months, and we are feeling comfortable to close the old one. This also means that we can produce a project that is profitable already from year 1. Thank you.

Thank you, Matt. From Sundsvall, we now head over to Umea, Obbola that you were visiting recently, Anders.

That's right, Josefine. I met with Gustaf Nygren and [indiscernible], who told me more about this impressive project in Obbola. [Presentation]

Our products have to reach our customers on time, which means structured, effective and sustainable transports of vital importance. Josefine, you met with Magnus Svensson, our Director of Logistics and Purchasing the other day. Let's have a look. [Presentation]

We now have a better view of SCA's operations and how well positioned the company is for our future where sustainability will be even more important. Now it's time for Q&A. [Operator Instructions]. But first, we'll take a short break. See you in a few minutes. [Break]

Welcome back, everybody. Ulf, we have highlighted several successful projects that are on budget and on time. What is the key to a successful project?

Well, I think we have done a lot of really big projects, and I think if you train on something, then sooner or later, you get good on it. So that is one explanation. I also think that we are performing rather solid pre-projects. So we spent quite a lot of money before we run into the project, and that is also super important, I think. And last but not least, of course, we have very competent people, both inside SCA, and also I think that we try to find best suppliers. So that all together, I think that brings some kind of success.

We've seen presentations today from large parts of the organization. How would you summarize this day?

Well, I think that we are well positioned for the future. Today, we have heard about a lot of ongoing projects, and they will come on stream next year. I mean, we have the kraftliner project in Obbola. We have the CTMP project here in Ortviken, Bollsta Sawmill, the new biorefinery, and so on and so on. But I mean, they will start to deliver cash next year, and that will give us a strong position, I think. And basically, we also invest a lot in our current asset base. And by that, we also have a good cost position which is, of course, good. I think also next year might be a turbulent year, and we have been talking about a degree of self-sufficiency and we have a high degree of self-sufficiency. We have it in wood. We have it in energy. We have it in logistics. And that will also be important things to have if things getting worse, of course. We have the forest. I think it's also important because the forest is growing, both good days and bad days. And last but not least, we have a super strong balance sheet.

Thank you, Ulf. Now, let's move over to our Q&A session. [Operator Instructions]. So operator, please go ahead. The first question, please.

[Operator Instructions] Our first question comes from Robin Santavirta of Carnegie.

Really good and interesting presentations you have had today. I guess my question is to Ulf, and it's related to capital allocation. I guess you show now that the target is 3 terawatt hour worth of wind power in production in 10 years' time. Can you share some sort of information about what kind of CapEx that would require? And then secondly, what kind of returns or profitability or any impact should we expect? I know it's early days, but I guess you have more information on this than we. And the second part related to capital allocation is, is it only now wind power and renewable energy which is the key focus? Historically, you have the big forest and you have a proven track record in the industrial operations. Quite good, proven track record. Now, it seems that the focus is more on energy rather than increasing the industrial production. Is that the right way to look at it?

Well, if we start with the wind power, I mean, you can calculate yourself, and it depends on what kind of product we will run. But I mean, 3 terawatt hours, that should be around SEK 10 billion to SEK 15 billion, something like that, return. I mean, it depends if you buy something that is already ready up and running. That can be good. Probably a lower return, but it can be long term a better case because then you might have positioned yourself for repowering. So that could be one thing. Organic -- if we develop projects organically, I mean, then you probably have a higher return. But we have some challenges when it comes to permissions, environmental permissions, and things like that. And of course, we see also as Mikael mentioned, the big potential in repowering. So I mean, it is a mix of different projects. You will have slightly different return in different times. But all in all, between SEK 10 billion, SEK 15 billion, I would say. That was the first one. And if I remember the second question because it was a second question anyway, so -- but I mean, we will continue -- as I said, we will continue to capture opportunities for organic growth in our industry. And I also said that we have a number of different projects. And of course, we will utilize the position that we have and continue to develop the industry as well as we will continue to buy forest land and develop that part.

Our next question comes from Oskar Lindstrom of Danske Bank.

Yes. My question is to Mikael Kallgren on the wind power strategy. I mean, I agree with you that most of the value creation in onshore wind power is probably in the development phase. So what is the logic for SCA to sort of essentially replace pension funds as long-term owners of wind power on its lands? I mean, once built, is there any potential to increase value further? Are there any sort of synergies or other things, which means that there is a logic for you to remain just an owner of these wind farms?

Thank you. I think the important part that we're focusing on today is getting control of the development and building a portfolio. And exactly how we will tackle the future depends on many things, so I guess for now, we're focused on getting control and building our portfolio ourselves. And I think what we see is that we want to contribute in this transition towards renewables, and we see all these industries being announced. But of course, we will follow this closely and monitoring this. But I guess, our focus right now, control, developing a portfolio and then we will adapt our tactics along the way.

Our next question comes from Johannes Grunselius of DNB.

Yes. It's Johannes here. I have a question for Andreas. I was thinking about the forestry values. And in the presentation, I have clearly the impression, of course, that prices are stable or on its way up or rather, on its way up. So I was just thinking about if you can indicate something about your upcoming valuation on the forestry and also related to the, yes, forestry business? I mean, are they areas where you can perhaps be sellers, if really -- if there's a really high demand for some areas of forestry, or you can use that in as a seller? And I was basically also thinking on the fact that you have quite a lot of non-productive forest land in your books.

Start off with the forest valuation. We use our 3-year average. And I mean, if you see now, the prices have continued to increase in 2022. And in the second half of 2022, the prices have been on a high level and almost increase compared to the first half year. So they have continued to increase. I mean -- and that will be a positive for our yearly evaluation. And on the second part, for if we want to sell, I mean, we are a net buyer of forests. But I mean, we can always sell if we want to. But in general, we are a buyer. And what we do is that we sell land far away from our industries, and then we use that money to buy land closer to our industries.

Our next question comes from Michael [ Philippe ] of Jefferies.

I have one on first valuation, and it's partially been answered. But I guess just a quick follow-up, is that -- it looks like that after years of positive market trends, some investors are starting to see some reversion in valuation due to higher rates impacting cost of capital. And [ starting discount ] to SCA for value, even historically should get the legal entity and sales premium. What's your thoughts on that?

No. As I said, I mean, we use a 3-year average price so we have not seen impact from higher interest yet. What we have seen is that the prices have continued to increase driven by high demand. And we think we've had a lot of interest from forests as our protection against inflation, and also a lot of high net individuals interested in buying forest as part of their portfolio. And then accounting-wise, we have to divide the total value between biological assets, which we do by a long-term DCF, and then rest is land value. We focus on the total value, and then we are free -- user free there, we have a headroom to current prices.

We can go to Christian [ Jack ] of Handelsbanken.

A follow-up on the forest valuation and, I guess, for Andreas, because we already talked about it. And correct me if I'm wrong, but to my understanding, you are not including any premium for company-owned forest versus privately-owned forest in your 3-year rolling average valuation model. And if not, are you considering to, included as you now pretty much very clear highlighting that there is a premium?

That's correct. I mean, we used the total market prices, so we don't include that premium. We have not included that in our book value because there are too few transactions to have a reliable statistics each year. As we have said, this year has already been almost no legal entities for sale in our region. There's too few transactions to base for [ reservation ].

Our next question comes from Oskar Lindstrom of Danske Bank.

I have a question for Kristina on the pulp side. You say that you will be transferring CTMP production from Ostrand to Ortviken, and that this will enable you to increase NBSK production at Ostrand. Could you say something about when and how much you will be able to increase, and -- or expect to be able to increase NBSK production at Ostrand?

We have no decision in the expansion of the NBSK production at Ostrand yet, but we have an environment permission of 1.1 million tonnes in Ostrand of NBSK.

Our next question is from Andrew Jones of UBS.

I just wanted to ask about biofuels and just get some idea for contribution to EBITDA. There's not many numbers on the slide. So for both projects, what sort of EBITDA contribution are you expecting? And what sort of margins are typical for these sort of plans? And how does it compare now, it's obviously peak in energy price levels, compared to a quite normalized environment pre-2021? Just some ballpark that we can understand what the value proposition is there.

Yes. So if we start with the biorefinery in Gothenburg, we guided that we're investing SEK 650 million, and we give EBITDA contribution of around SEK 200 million with normalized prices. Today, it will be more. I mean, today, we have [indiscernible] prices of over $3,000 per tonnes. And then for EBITDA margin, I mean you can look at some of our Finnish competitors and a large player in the U.S. to see the margins, but we have guided SEK 200 million. With trend prices and with the current high prices, it's even higher.

Our next question comes from Linus Larsson of SEB.

Many thanks for interesting presentations today. I'd like to come back to capital allocation. You have a strong balance sheet, and thank you very much for the guidance on the wind power initiatives or the CapEx in the years to come. But if we look at the next couple of years, say, 2023, 2024, how do you see capital allocation split between dividend, buybacks, acquisitions and not least CapEx? Are you seeing increasing or declining CapEx from 2022 levels, for instance?

Yes. If we start with CapEx, I mean, if we start with our ongoing strategic projects, we have around SEK 1 billion left during the next year also including some forest acquisitions in Baltics. And then we have our current CapEx, which would be around SEK 1.5 billion, and we expect something similar next year plus inflation. And then we have, as Ulf mentioned, our target to reach 3 terawatt hours of wind, which would be SEK 10 million to SEK 15 billion in 10 years. And then it depends on what kind of other decisions we take. And in terms of dividend, we have a target to have a stable and increasing dividend over time, and I think you can look at our track record to see how much we have increased each year.

[Operator Instructions] Our next question comes from Andrew Jones, UBS.

I just wanted to follow up on the previous question. You didn't mention anything about Ostrand. I mean, do we basically just scale that EUR 200 million EBITDA guidance from 200,000 tonnes to 300,000 tonnes? Or is a very major difference in terms of feedstock or profitability? And can you just tell us about what the sort of feedstock mix is going to be for those 2 plants?

If you're talking about the biorefinery in Ostrand, that is at an early stage. But the CapEx from going to -- for solid biofuels to liquid biofuels is higher compared to going from liquid to liquid, but that's too early stage to say anything about the CapEx.

Our next question is from Christian Jack of Handelsbanken.

My second question is for, I think, Mikael on wind power. And you're talking about there is a lot of potential to repower older turbines. What would you say about the chance of success when it comes to environmental permits and -- or say, general permit from the neighborhood and so on to repower old turbine?

Yes, okay. Today, we have the same process for repowering as we have for greenfield, but it's -- there are discussions of shortening the permitting phases and also easing up for certain kind of permits. And I think repowering is something where you exchange old turbine -- new turbines -- old turbines with new, sorry. It's something that you could do much shorter than today. You could be -- of course, we should have a good permitting process. But today, you can have like -- it could take 7 years to get a greenfield permit. And that is not, I think, acceptable for repowering. So today, there is a challenge of getting new permits in Sweden. That's a fact. And -- but it's something that we need to handle. And I think as local stakeholder and being present in the northern part of Sweden, we have good opportunities to do this better than others.

Our next question is from Robin Santavirta of Carnegie.

I have a question related to the growth investments and especially the kraftliner expansion in Obbola and then the CTMP pulp expansion in Ortviken. You have provided quite good information about obviously the volume but also the long-term earnings impact, and that is very appreciated. But what about shorter term? How should we look at the end of this year and next year when it comes to both these investments and the earnings impact? Also related to that, how should we model the depreciation then of these investments? Are they started now already fully or coming in gradually next year?

Maybe I should answer this question. When it comes to the more short-term situation, we know that we are now, for different reasons, coming into a weaker market. You can see that in the statistics that's public that the demand goes down, we are seeing that inventories have gone up and they are on a quite high level. And the question, I think, is whether how long time the postponements of purchase will continue before it turns back. In my presentation, I showed you the resilience of the growth trend of containerboard. Short term, we have impacts that's impacting, I would say, both demand in Europe or globally, and it impacts pricing. I don't want to make a prediction of the pricing outlook, but you saw in October, the index price was reduced by EUR 30 in October. November pricing comes soon, and it's yet too early to speculate on that one. On the depreciation, we start the full depreciation of the project that is -- part of the project that is ready as of 1st of January. The rest of -- the remaining project part will come when they are finalized. As we have announced, we have yet to finalize the recycled pulp part. They also see line in the first half of next year. But the vast majority of the capital is within the project scope that we start full depreciation of as of first of January.

[Operator Instructions] And we can go to Oskar Lindstrom of Danske Bank.

I have another question here on the forest side. I guess it's for you, Jonas. You mentioned the Baltics, and that you have an ambition to buy more forest land. And I'm wondering, I mean, I realize there might be smaller lots available sort of continuously, but how often are there larger tracts of forest land available for you to acquire? I mean, are we looking towards you adding hundreds of thousands of hectares, or will it be more smaller additions?

Yes. Thank you. If you look at -- when we -- since we started to acquire forest land in the Baltics, we have acquired between 5 to maybe 8, as we call it, larger portfolios. So they will be in the market not every year but sometimes, maybe once or twice per year. So we are very focused right now on purchasing small plots from private forest owners. So we just have to wait and see. So I don't -- not predict how many we will have the coming years. But right now, we see that we will be around 70,000 hectares of forest land by the end of this year, which means we are in line with the target we set 3 years ago. And we hope there will be some larger portfolios also available during next year or the coming years. But we are focusing a lot on smaller plots also. We have a very efficient process to buy these small plots right now.

Our next question is from Andrew Jones of UBS.

Slightly provocative one. You're telling us that your book value for the forest, which is about SEK 120 per share, something in that ballpark, should be valued on 40%, 50% more, so way above where your share price is today. What's more important for the company? Is it being integrated in the forest or is it growing your share price?

Maybe it's my question. If it's most important to grow the forest or the share price, was that the question?

Kind of, yes.

Yes. I mean, the forest will grow even if we like it or not, I mean, you have that growth every year. And then as we say, we buy the forest land that we can buy. So that is important. And I think long term, that will also increase the share price. So I think it is a combination. Forest is a great asset, and that's also the foundation for the industry. Do you think it's really crucial to keep the balance between the industry part and the forest part? And I also think it will be beneficial to now increase the renewable energy part in the company. Was that some kind of answer for you?

Kind of. I'm sure the forest will grow regardless. But whether you have to be growing it, maybe another question given.

But I mean, again, we have -- I mean, the foundation of this company is the forest, and that was also the starting point back in 1929. And step by step, we have increased -- I mean, the forest land within the company. And as we've said also in the past, we have bought a lot of forest land, and we will continue to buy forest land also going forward. But in Sweden, we have a limitation when it comes to buying from small private forest owners, and that's the reason also why we now say that we will buy in the Baltics, of course, but we're also looking into opportunities within all Nordic countries. I mean -- so that might be the limitation, Nordic countries and the Baltics. But everything in this region is of interest.

Our next question is from the line of Linus Larsson of SEB.

Here's another question for Jonas and it's on carbon sequestration. I occasionally get questions about potential monetization of carbon sequestration in forest land. And how do you see that market potentially developing? Do you want to play a part in that development? And overall, what's your stance towards such market?

Okay. Thank you. Yes, as you said, the market is developing, but we also see a risk that it will reduce the amount of available sustainable raw material for our industry, which will also have a negative impact on climate smart products like wooden houses and other products. So there is also a risk. So we see some potential, of course, but also a risk. So right now, we think that the wood that comes from the forest makes better use in our industry than standing there and -- for us standing. So that's our view right now.

And our next question is from Joffrey Bellicha of Bank of America.

I guess this question is for Ulf, and kind of taking the beginning this discussion around forest here. As you said in the presentation, you're not fully integrated on your forest assets and actually, not as many people are in Europe. We know that also that there are large private buyers for forest assets in Sweden at the moment. Do you think that there is a risk in the short or midterm that you lose the contract that you had secured with some of the private forest owners in terms of food supply for your businesses in Sweden?

Yes, that's a good question. But I mean all -- for [indiscernible], they need an industry in order to put value on the forest, and that goes for SCA as being the biggest private forest owner in Europe. But I mean, you have the same situation for a small or a midsized private forest owner. You need the industry in order to put value. And I mean, that's the reason why we always try to find out how to maximize the value all the way from each tree down to end products. And that's the reason also why we one day, we closed on our publication paper business. The other day, we invest SEK 8 billion in a new kraftliner machine in Obbola, SEK 8 billion in a new pulp pipeline in Ostrand. And of course, I mean, in the Northern part of Sweden where we are present, we are more or less all over the place, and that gives us a good opportunity to be really efficient in our purchasing from private forest owners. But not only that, I mean, we can also be efficient when it comes to holding and to harvesting and so on. And by that also increase the value for each forest owners, not only for SCA or forest owners, but also the other players.

[Operator Instructions] And we can go to Robin Santavirta of Carnegie.

Perhaps a final from me related to sawn timber. And this is, again, a bit of a shorter term sort of question because the long-term trends are well explained and we know them. But what should we think about the outlook for 2023? I know Ulf gave a good prediction on your view of Q4, and that's good. But then when we go into 2023, I guess there's different kind of thematics in play, perhaps not at least more supply. But on the other hand, the end demand of construction and DIY probably quite weak. Should we look at low prices for all of the year, or do you expect a rebound when we come to the high season in the summer? What is your view?

Well, as you say, the conditions in the world is difficult to foresee. But if we start with what we know, and that is that prices has decreased from the second quarter to the third and from the third to the fourth. Cost has increased, general inflation and especially the log cost, so those 2 areas has decreased margin for us and for many others. And with that said, we can see production going down already. We foresee that the production will continue to go down in the later part of this year and into the first quarter next year. And with that said, our view is that we won't lower prices anymore for the first quarter next year from today. And if you look further from there, it's difficult to foresee, but that is what we know as of today.

And we have a follow-up from Linus Larsson of SEB.

Just a quick follow-up on your forest land purchasing strategy previously talked about, targeting 100,000 hectares. And I think Johan has just said that you're expecting 70,000 hectares reached by the end of the current year. And Ulf, you make a point also to say that it's not only the Baltics, but also other Nordic countries that you're looking at. So if you could just please clarify, are you looking to -- how much forest land are you looking to buy? And is it so that in the coming year or years, we should expect forest land purchases outside of the Baltics? And it's where?

Our target right now is to reach these 100,000 hectares of forest land in the Baltic region, and then we will see. So that is what we are focusing on right now.

Maybe what I just said, that was not clear. I mean, we have set some kind of limitation because from time to time we had the question, are you willing to buy forest land in Brazil or other areas of the world? And we are not. We will stay where we are in the same geography. And as soon as there's -- I mean, we buy as much as we can to at least a decent price level in the Baltics. And I mean, you never know when you have the opportunity to buy something from someone. You have to be two for tango, so -- but if we have the right opportunity, then of course, we are interested -- but so we will keep -- we will stay in the geography where we are today.

Would you buy forest land in, say, Finland? Or the current geography, does that mean Northern Sweden and the Baltics?

If you have something to sell in Finland, I buy from you. Yes.

And we have a follow-up from Oskar Lindstrom of Danske Bank.

I have a final question from my side, and it's to Ulf. 10, 15 years ago, you were exploring the opportunities together with other sort of Nordic or Northern Swedish industries in developing new nuclear power in Sweden. And then you drop that, I think, around 2014, 2015. Is this something that could become interesting for you again as a way to help develop sort of industry and the real estate that you have in Northern Sweden to participate in a consortium to develop new nuclear power?

I think it's much cheaper to develop what we can do in wind power. And as Mikael said, I mean, we have a potential on, say, a land of 65 terawatt hours. And what we see as now is that we can realize 15 terawatt hours. And the reason you know, I mean, we have this process for getting permissions and things like that. So I think that something will happen here. And also, Mikael talked about repowering. And I mean, I think that's a no-brainer to go from 6, 7 years to get a no to 6 months to get a yes in repowering. And that's also -- we discussed what kind of projects are we interested in, in wind power. I mean, we like to position ourselves in a way that we can benefit from -- mainly from the repowering potential that we can see. And also, of course, greenfield projects. But the answer on nuclear is no, I would say.

And as -- pardon me, we have a question from Andrew Jones.

Returns on those different projects. I mean, obviously, you don't know how much it's going to come from each. But what sort of returns do you sort of see in greenfield generation of wind compared to this repowering guide, compared to just basically taking on existing projects? And I mean, how do IRRs sort of stack up from what you can see?

Yes. As I said in my presentation, if we look at -- of course, wind power profitability is also about power prices. But if you look at today and if you do a greenfield development from -- on your own and you continue within operation and final investment decision, you will get, I believe, double-digit IRR levels. So bottom line, onshore wind power is a profitable investment.

That's the greenfield. What about the power?

Yes. We expect to -- if you do repowering, we expect 10% to 15% of the infrastructure is such that you can reuse. So that is why we also see that repowering will be also more profitable than greenfield.

And as there are no further questions at this time, I would like to hand the call back to Anders Edholm for any additional or closing remarks.

Thank you, operator. And with that then, I would like to thank you all for watching and wish you a happy weekend. Thank you.