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Good afternoon, and welcome to this presentation of Metsä Board's First Quarter Results for 2019. My name is Mika Joukio, and I'm the CEO of Metsä Board. Together here with me, I have our CFO, Jussi Noponen; and our Head of Investor Relations, Katri Sundström.Let's first have a look at today's agenda. First, I will go through our January-March 2019 results as well as the outlook for coming months. After that, I will tell more about the CapEx plans that we and our associated company, Metsä Fibre, announced earlier today. If realized, the investment value for all 3 projects would amount to approximately EUR 2 billion. The planned investments would further develop our competitiveness of pulp and energy production, and move us towards fossil-free production. And regarding to these investment plans, we have also updated our financial targets. Then, at the end, we will take our normal Q&A.But first, January-March results. All in all, our profitability improved, thanks to the higher paperboard prices and slightly increased delivery volumes. Demand for folding boxboard was good in both EMEA and the Americas. And in Europe, higher folding boxboard prices came into effect mainly from the beginning of the year. In the Americas, the price levels remained stable.In white kraftliners, weakened demand, especially here in Europe, has been reflected in our delivery volumes, which have been declining for some time now. The price level of white kraftliners remains stable compared to the previous quarter. However, we expect that the weaker market will have an impact on average price of our kraftliner sales in the coming months.The pulp market, especially in China, has somewhat recovered from the sudden drop at the end of 2018. In softwood pulp, the price gap between Europe and China has narrowed as prices in Europe have declined, but prices in China slightly improved.Metsä Board's and Metsä Fibre's delivery volumes in market pulp increased during the first quarter compared to the previous quarter, but the average selling price was lower. And compared to other quarters, the first quarter is always lighter in the sense of maintenance breaks. There were no maintenance shutdowns at Metsä Board paperboard mills. But Metsä Fibre's bioproduct mill in Äänekoski had its planned maintenance shutdown in March.Here are the quarterly paperboard delivery volumes. Compared to the corresponding period last year, we had steady development in folding boxboards, but declining volumes in white kraftliners. Total paperboard deliveries, however, were slightly up from the previous quarter. And the expectations for the second quarter look fairly similar to the first quarter.Our sales grew by 6% compared to the previous quarter, thanks to the higher delivery volumes of paperboards and market pulp. Of total sales, 58% derived from folding boxboard, 24% from white kraftliners and 18% from market pulp. The comparable operating result was roughly at the same level as in the fourth quarter last year, as we estimated. On the positive side, we had higher paperboard prices, increased volumes, less maintenance and a positive FX impact.On the negative side, we had lower market pulp prices and slightly increased production costs. And if we compare the first quarter result to the corresponding period last year, the main positives were higher paperboard prices, higher volumes in folding boxboards and currencies. At the same time, production costs increased significantly. The planned maintenance shutdown in Metsä Fibre's bioproduct mill and declined market pulp prices in China also impaired profitability.Our return on capital employed during the first quarter was 14.4%, well above our targeted level of 12%. The capital employed at the end of the review period was EUR 1.7 billion. The total impact from foreign exchange rates and fluctuations, including hedges, had a positive impact of EUR 6 million on our first quarter results compared to the previous quarter. And when comparing it to the corresponding period last year, the positive impact was EUR 11 million.Total production costs for paperboard and pulp increased slightly in the first quarter compared to the previous quarter. However, there was a negative difference of several million euros when comparing to the corresponding period last year.As we remember, wood costs, especially in Sweden, rose rapidly during 2018. And the price level remained at the high level at the beginning of this year. Another big negative item in 2018 was higher in-land and transport costs in the U.S. We expect them to fall slightly in 2019, but not to return to their starting level. Then a few words about the pulp market and its impacts on the first quarter's result.First, I want to remind you that our annual pulp balance, including the share from Metsä Fibre, is approximately 600,000 tonnes long in 2019. The majority of that long position is long-fibre pulp, which is sold mostly in Europe and in China. So Metsä Board's and Metsä Fibre's market pulp delivery volumes increased in the first quarter compared to the year-end volumes in 2018.In the fourth quarter, we experienced a sudden decline in pulp demand, especially in China. However, the increased delivery volumes did not compensate for the weakened average price level, and therefore, the overall impact in the first quarter remained negative.During the early part of this year, the pulp market has showed signs of recovery. And together with rising volumes, Chinese pulp prices have slightly improved. At the same time though, the price level in Europe has weakened, which has narrowed the price gap between Europe and China. Yet, I want to highlight that we still have a positive view of global pulp demand in the long term.Then to the cash flows. Our cash flow from operations was EUR 36 million. It was improved by the dividend received from Metsä Fibre, EUR 63 million. But at the same time, weakened by increased working capital due to the higher inventory levels and growth in sales receivables. Gross investments during the first quarter were minor, only EUR 6 million.Then to the balance sheet. Our net debt fell below EUR 300 million, and the leverage at the end of the review period was 0.9. In March, we paid the remaining EUR 60 million of our bond issued in 2014. We have improved and simplified our folding boxboard portfolio, which will further enhance our leading position in premium lightweight paperboards. This new portfolio will answer to increasing demand for sustainability, product safety and brand promotion. The operating environment around us is constantly changing, and we have to keep up with the pace, or even more, be a step ahead of our competitors.We must continuously develop our products and offer solutions to meet the needs of future packaging. A big part of our product development work relates to the light weighting of paperboards, and that is based on improved properties in the high-yield pulp. We will continue our development work in this area also in the future.Then to the near-term outlook. We expect our second quarter paperboard deliveries to remain roughly at the same level as in the first quarter. In folding boxboards, we expect to see stable price levels in the coming months. Demand for kraftliners has weakened, especially in Europe. And this development could have a negative impact on our average sales price.We expect demand in the global pulp market to remain stable. Several maintenance shutdowns among global pulp producers during the second quarter may reduce the pulp supply somewhat and reduce inventory levels. Changes in FX as well as production costs are estimated to be only minor in the second quarter compared to the first quarter.And finally, the April to June results will be negatively impacted by several maintenance shutdowns, especially at Metsä Board's Finnish mills, as typically. And based on these assumptions, we expect that our operating result in the second quarter will weaken compared to the first quarter of 2019.Then, moving on to the investment plans. Metsä Board and its associated company, Metsä Fibre, of which Metsä Board owns roughly 25%, have today announced to launch pre-engineering phases for 3 major investments: Renewal of the Metsä Board Husum pulp mill, Metsä Fibre to build a new bioproduct mill in Kemi, and a new pine sawmill line in Rauma. If realized, the total investment value for all these projects would amount to approximately EUR 2 billion.The final investment decisions are expected to be made depending on each investment, roughly within a year from now. The aim of all 3 investments and for both companies is to further improve the competitiveness of our pulp and energy production and move towards fossil-free production.Husum pulp mill would be renewed in 2 phases. In the first phase, the existing 2 recovery boilers would be replaced with 1 new recovery boiler, and the old turbines replaced with 1 new turbine. We will launch a pre-engineering phase for the investment in the recovery boiler, which will also include the necessary regulatory process among other things.Investment would enable the long-term development of the Husum integrated mill. It would reduce the energy costs of the mill, improve the reliability of production and decrease the duration of the annual maintenance shutdown. Own electricity generation, entirely based on renewable biomass, will double and increase the self-sufficiency in electricity of the integrate to over 80%.Then in the second phase, during the 2020s, the existing 2 fibre lines of the mill would be replaced with the one new. During that period, potential investments to increase paperboard capacity could be based on a cost-efficient, long-term energy production solution.And this shows the estimated time schedule for the renewal. The timing of the final investment decision for the first phase depends on the duration of the regulatory processes. The investment decision is expected to be made in the fourth quarter of this year at the earliest. The recovery boiler and the turbine would be in operation roughly 2 years after the final investment decision.The size of the first phase investment is approximately EUR 300 million, and it would be divided between years 2019 to 2022. Total annual production capacity of the pulp mill after the investment would remain at 750,000 tonnes.Then, Metsä Fibre will launch a pre-engineering phase for the construction of a bioproduct mill in Kemi, Finland. When realized, the size of the investment would be approximately EUR 1.5 billion, and the annual pulp capacity of the mill, approximately 1.5 million tonnes. In addition to pulp, the mill would produce several other bioproducts. The final investment decision by Metsä Fibre is estimated to be made in the summer 2020, at the earliest. Metsä Fibre will also launch a pre-engineering phase for the construction of a new pine sawmill with approximately 750,000 cubic meters of annual capacity in connection with Rauma pulp mill.The size of the investment would be approximately EUR 200 million, and the sawmill line, when realized, would be the most modern and efficient in the world. Related to these investments and our target to improve the competitiveness of pulp and energy production, we have updated our long-term financial targets. In the coming years, profitability will guide our capital allocation. This means, small- and medium-sized investments in our existing paperboard production lines and overall more moderate growth in paperboard deliveries.Last, we have removed our earlier growth target, which aimed for higher-than-average market growth in paperboard deliveries. Other financial targets have remained the same. We target a minimum of 12% return on our capital employed, and want to keep the ratio of net debt-to-EBITDA at the maximum of 2.5x, even during the investment periods.Then, to summarize, and starting with current market situation. Demand for folding boxboard is at a good level in all our market areas. Also, we believe that current price levels will hold. In white kraftliners, the market situation is softer, which might have an impact on our average selling prices in the coming months. Pulp market is recovering, yet the high inventory levels are still causing uncertainty in the short term.We have renewed our folding boxboard portfolio, which enhances our position in premium lightweight paperboards. In addition, it provides clear benefits to our customers and end-users. From a broader perspective, it offers solutions to meet the needs of future packaging in a more sustainable way.Metsä Board and Metsä Fibre have today announced major CapEx plans. The aim is to further improve the competitiveness of pulp and energy production, and move towards fossil-free production. For Metsä Board, the Husum pulp mill renewal will enable the long-term development of the integrate. And finally, profitability will guide our decision-making and capital allocation in the coming years. Our return of capital employed and leverage targets remain the same.Now that was the end of my presentation, and we are ready for your questions. Thank you.
[Operator Instructions] We will now take our first question from Antti Koskivuori from Danske Bank.
I would actually have 3 questions. First, on the Husum recovery boiler investment. I understand that the size of the -- or the capacity would be similar than the current pulp mill has. So I was just wondering, just positives are going to come from other energy efficiency, as you mentioned, and better reliability obviously. If you could give us an indication of what kind of ROCE you are expecting -- expect for this EUR 300 million investment? That would be the first question. Secondly, would be very helpful if you could give a kind of indication of the -- what the CapEx will be for the second phase of the investment plan, i.e. the 2 fibre lines that you mentioned? And then thirdly, on the kind of financial targets and you dropping the target to outgrow the market in paperboard. I was just wondering, is this related to the Husum investment plan and capacity to do other investment at the same time? Or is it more that you have changed your view about the market growth for paperboards or supply/demand balance, in general? Those would be my questions.
Okay. First, the Husum investment and the new recovery boiler and turbine. Of course, we are still at the planning phase or we will start the pre-engineering phase, and it's too early to say anything concerning the kind of payback time or something. But we don't -- we -- our target is the 12% in company level, and we don't, at this point, kind of specify what are the return of capital employed levels for the separate investments. Then, the second phase in Husum. That's pretty much the same money we are talking about. So new fibre line replacing 2 old fibre lines. The price tag would be pretty much similar, so EUR 300 million. And then these profitability targets. We need to remember here that during last 5, 6 years, we have been able to grow more than 10% annually year-on-year on the average. So growth rate has been -- or pace has been quite quick, so to say, or high. And now we really put pressure and emphasis on profitability. So moving less profitable volumes to better profitable volumes. And of course, still intention is to grow, but not necessarily more than the market. And that is concerning this case. So we still see that the demand for high-quality paperboard, global demand will grow like 3% annually. So no reason to expect something else.
So you haven't changed your kind of view apart, for example, the U.S. potential, for example, or...
No, no, no. No changes there.
We will now take our next question from Mikael Doepel from UBS.
A few questions here. Just to continue on the Husum investment. You mentioned that this will enhance the paperboard capacity. But I was trying to what -- figure out in what way, given that the pulp capacity won't increase. So maybe you could start by explaining that.
So we have said that these investments in Husum, I mean, the turbine and the recovery boiler, and then later stage the new fibre line. Of course, that will set an excellent, excellent kind of platform for further developing the paperboard production. And I mean, of course, this will -- the first phase will improve the energy efficiency and then self-sufficiency in energy in that integrate. So by doing that, of course, then that will have a positive impact also for profitability of the whole Husum site.
Yes. But I think you mentioned that you expect it to improve or increase the paperboard capacity as well?
No, we didn't say that. We say that, because of course, we are not announcing any investment for paperboard at this point.
Increased paper capacity in the future, solid foundation and increased paperboard capacity in the future. That's on your slides. Okay. But moving on to the pulp markets. A couple of questions there. If you think about the European market now, how would you describe the demand situation right now? And what's your take on the inventory levels? How long will it take to drive them down?
If starting from inventories, of course, it's difficult to say how long does it take. But the demand in Europe at this point is relatively good. But of course, there are pressure on prices because the price gap between China and Europe is quite high. And even though we don't see that the prices in China would further decline, we estimate they'll be stable or slightly increase. But we see that in Europe, during the second quarter, the prices will decline. And the fact is that the gap to Chinese prices is too high at the moment. But demand is okay.
Okay. And then also in your slides here, you're saying that longer term, you still believe in the pulp demand growth and that's going to be supported by the China's recycled paper import ban. Now with regards to that, how much of incremental demand do you expect that to bring to the diverging fibre market and in which grades?
Those numbers, I don't have in mind. But we need to remember here that, especially concerning the long-fibre pulp, no new projects have been announced. Okay. We announced today that Metsä Fibre and Metsä Group is planning a new mill in Kemi, but it's still several years ahead. So at the moment, there are -- after Äänekoski investment, there have not been any new announcements concerning new capacity. And the -- and demand is growing, so it's quite logical that the demand/supply balance will be healthy also in the future.
Okay. Then a final question on the white linerboard market, which you say has been weakening now recently. Could you explain a bit in more detail, I mean, which customer segments are driving demand down right now? And also in terms of the pricing, how steep declines are you looking at?
So Metsä Board is the market leader in white kraftliners in Europe. And of course, we have last year -- during last year and also 2017, we have increased prices because demand has been good. And as a market leader, of course, we need to act, so to say. And now last year especially, when the prices of the recycled fibers in Europe have declined comparing to -- I mean, relatively declined comparing to pulp prices, then, of course, these recycle-based producers have had a possibility to kind of attacked also the kraftliner producers. And all in all, kraftliner producers have lost market share slightly for test liners and other recycled-based linerboards. So that is one effect. And then the other one is, to be honest here, that -- because we have been quite strict with the prices, we have lost some volumes for our competitors also in white kraftliners. But all in all, the market as such, if I compare 2018 to 2017, it still grew close to 1%, I mean, box market.
We will take our next question from Gustaf Schwerin from Pareto Securities.
I have 3 questions. Firstly, a follow-up on the Husum investment. I mean, is this something you would purely in order to reduce your energy cost and the self-sufficiency? Or is this an investment that can't wait because of the recovery boiler being in bad shape? I mean, I'm trying to get a feeling for the potential return levels on the investment. I'll take them one by one.
Yes. So the current recovery boilers, they are not in the best shape, so to say. And now we are moving to modern technology and replacing these 2 boilers with 1. And by doing that, of course, we will get benefit on -- of course, in energy, energy costs and energy production, but also then the length of the annual shutdown. We are able to have, in the future, shorter shutdowns -- annual maintenance shutdowns than what we have had during last years.
Okay. Great. Then secondly, again, on you changing your financial targets today. I mean, I understand the reason behind it. But I mean, you talked about the focus on profitability already at the CMD last year. I mean, is there any reason for changing this right now?
No, of course, we could have changed that already in CMD. But I think now it's -- when we have these big news concerning this CapEx and investments, it was good timing also to do it now. So nothing dramatic there. We just put the profitability first. And of course, as I said earlier, we continue to grow and we are targeting growth and we will open bottlenecks at the current mills also in the future. But now we really put pressure on profitability and that is the background. Nothing dramatic, as I said.
Okay. Great. Then lastly from me on your guidance for Q2 and about profitability. And given stable volumes and stable FX, I mean, can you give us some feeling for how much of it is lower pricing on white kraftliners and how much of that is maintenance?
I would say the 2 major -- or the biggest reasons here are, of course, the maintenance shutdowns, and then the other important reason is coming from pulp. So we see that the prices, especially in Europe, are declining comparing to Q1, and that has -- will have a negative impact on pulp prices. Not that much on volumes, as I said, but prices. And then, of course, linerboard remains to be seen. Our intention is not to decrease the prices in Europe. But then if the demand is a bit soft, then we need to find other customers elsewhere, and then this market mix or customer mix could have a negative impact on prices and then profitability, all in all. But these are the main elements and very important to this is maintenance, maintenance breaks in Finnish mills as well as then the pulp price development.
But you don't want to quantify anything on the maintenance side?
Not really.
We will take our next first question from Robin Santavirta from Carnegie.
So just a question on your liner capacity. And how much of that at the moment is coated? Is it more than 50% of your liners are coated?
Yes. If you take only Kemi mill, that the lion's share is coated. We have some tens of thousands of tonnes uncoated. And then the whole Husum is uncoated. So in rough figures, I think a little bit more than 50% is coated, all in all.
Okay. Okay. And -- sure.
Yes. Kemi and Husum together so it's -- yes...
And so probably a 60% or something like that?
Yes, a bit more than 50%.
Prices in coated grades have historically been very stable. Are you now also expecting coated grades to potentially decline? Or are you seeing pressure there as well or is it just the uncoated product?
We see that the decline is mainly coming from the customer mix or sales mix and not that much so that we are giving up in prices. That is the background. So we try to -- as a market leader, we try to keep the prices or hold the prices, remembering that profitability comes first.
Okay. Okay. That is clear. In terms of CapEx. Now if you would go ahead now with this recovery boiler investment in Husum, that decision would be made end of this year and then it's 3 years of basically EUR 300 million in additional OpEx. Should we think it's EUR 100 million, EUR 100 million and EUR 100 million in that case? So that's the first question related to CapEx. And second, what is probably maintenance CapEx? What are -- how much would CapEx, if you would decide on this, how much would the annual CapEx roughly be over the next 3 years?
So our normal CapEx level the during last years has -- I mean, this kind of maintenance CapEx as well as then small development has been around EUR 70 million, as you probably remember. And concerning then this, how many -- what is the split between the years, I think it's a bit too early to say at this point, because we are still in the planning phase. Probably not that much for this year yet, but then during the -- when the project will proceed, then of course, we will see. But I don't know if Mr. Jussi Noponen will add something, but I think it's a bit too early to say.
Perhaps I could still highlight that the CapEx will be spread over 4 years.
4 years.
And not 3 years in our base estimate. So if the investment decision can be made still this year, we will make certain prepayments to machinery suppliers already this year.
That's true.
Okay. Sure. Sure. Right. But then in terms of the second part of this Husum investment, and would that possibly be made during so probably '19 to 2022, most likely I would assume? Or is it something that you would make on...
No. Most probably it will be a bit later. So during 2020s, but not at the same time. That's the first phase.
Okay. And that would be the same case, with that, that would improve your efficiency, but most likely not the total output?
Yes, that's true. Replacing 2 current fibre lines with 1, 1 new.
Okay. Okay. I understand. And then finally on this Kemi, the Metsä Fibre investment. Wasn't originally the decision meant to be made now in the summer this year, is this of a push forward 1 year? That's the first question. And the second question I have is on financing, how would sort of -- you must have some view or some idea on how this would affect your OpEx? Would it be a similar arrangement as in the Äänekoski investment or how it would affect you?
Yes. So roughly a year ago, we announced that we are starting different options in Kemi -- at Kemi integrate. So whether it will be a totally new bioproduct mill or is the -- is it the current mill kind of renewal. And now we said that, during 1 year, so latest this summer, then we will know that, announce that and now we are here. It's almost summer. So I think timing is more or less as we said a year ago. And concerning then what is the Metsä -- and then concerning the Metsä Board's share of financing. Again, it's too early to say anything about that. It will -- remains to be seen when the final plans are ready.
We'll now take our next question from Linus Larsson from SEB.
Maybe a follow-up on Husum. Just a clarification, did I hear you right that you say that the second phase would also be the same magnitude CapEx, i.e. another EUR 300 million?
Yes. Roughly.
And then if we call it maybe phase 3, what you might do with your paperboard capacity on the same site? Could you talk a bit about that in terms of capacity numbers or CapEx scope? What possibilities do these investments in the phase 1 and phase 2 provide you with?
I think and if you think about the volume development, so currently roughly 50% of the output of pulp mill is used and utilized at the paperboard production, both in linerboard and folding boxboard. And as we have said that the capacity of the pulp mill will remain pretty much as today, so 750,000 tonnes capacity. So -- and today, we are utilizing only 50%. So of course, there is a lot of possibilities to increase -- from fibre perspective to increase the paperboard capacity. And as I have said earlier, there are -- on our table, we have different calculations concerning different mills. But then at the moment, we don't have any decisions. But it's an excellent situation that we have in Husum that we have more fibers than we are utilizing at the moment.
But it sounds like the long-term plan would be to add a new state-of-the-art paperboard machine on that same site?
No comment.
Linus, Jussi here. I would like to add that what we want to communicate about the pulp mill with this phase 1 and phase 2 is that, after phase 2 what we have is a new pulp mill with a lifetime of at least 35 years. So what it enables is a long-term platform for developing the paperboard capacity there without any concerns about the remaining life of the pulp mill. So that's the story we want to tell you.
That's fine. Sure. If we then stick to phase 1 and phase 2 and you said -- I mean, that's without capacity growth, really. So it's all about cost improvement and competitiveness. Does -- do those projects meet your return requirements?
So our -- as I said, our company target is this 12%, and no reason to say something else.
So you don't have to think like long term into the next step in order to defend this EUR 600 million platform improvement?
No, not at this point.
Okay. And then just also a follow-up question, that's on the containerboard volume side. Shipments dropped by 19% year-on-year, which is obviously a lot. And you talked about the reasons behind that. And I think I understand the background. But could you maybe say a couple of words about how that year-on-year development was during different parts of the quarter? And maybe in the beginning of the second quarter, is second quarter, for instance, materially different from the low-volume that we now see for the first quarter?
So first of all, if you compare the first half of last year -- comparing first quarter of last year to this quarter, of course, the market was really overheated a year ago. So demand was really good and inventories grew. And then, that was the reason that it slowed down in Q3 and also partly Q4. But then also, as I said, we have lost market -- all kraftliner producers have lost market share for test liner producers, so that's one thing. And the other one is that we have really kept the prices or hold the prices quite tightly. And for that reason, to be honest, we have lost some volumes to our competitors in kraftliners side. And then, as Q2 this year is concerned, our estimation that the volume development is quite stable, as we said. So that's it.
We'll now take our next question from Markku Järvinen from Handelsbanken.
I still had a few questions. First, on the pulp mill. You've sort of outlined the second phase CapEx, and it possibly would happen in the 2020s. And I guess, there is no sort of increase in capacity. Does it still sort of leave upside to open up bottlenecks of the pulp mill at a later stage? Or is this sort of typical at new pop-ups?
So really the recovery boiler is literally the heart of the pulp mill, and the size of that pretty much then -- I mean, how would I say? If and when we fix the size now, then it's very difficult to get it bigger afterwards. So we need to remember that. So if we now say 750,000 tonnes and design and plan the recovery boiler based on that fact, so it's very difficult to increase then later.
And could you sort of discuss this various options for the Husum pulp mill? In the past, possibly -- I mean, if you utilize currently 50% of the pulp at the site and how did you sort of arrive at this sort of solution where you keep the current scale, rather than having a sort of smaller scale at the site which probably was also thought about?
We need to remember that the -- there are also other parts of the pulp mill, not only the fibre lines and the recovery boiler and turbine. There are woodyard, there are different other areas. And they are designed for the 750,000 tonnes. So it really doesn't make sense to, at this point , do something else or plan something else.
And once you've done the recovery on the fibre line, is there any other part that needs to be sort of rebuilt after that? Or is it sort of something that you...
They are much, much minor. So these 2 are practically the big ones.
Okay. And in terms of the Metsä Fibre investment, I guess, you didn't really have any view at this stage on any need for a capital injection. Do you have any idea on the impact on potential dividends from Metsä Fibre or the dividend policy? Could you just clarify what that is and will that remain in the H1 report?
Yes. Too early to say, too early to say at this point.
And when would you expect if that decision is made in a year's time, when would the Metsä Fibre pulp mill start?
So if the decision will be made, then next -- by next summer. So then it's depending on the regulatory processes, et cetera. But roughly 2 to 3 years after that decision, the mill should be up and running.
Okay. Okay. And on the Husum pulp mill, still you've said that energy production or electricity production at the site could increase. What -- could you quantify that increase?
Yes. It will double. So today, our self-sufficiency of the integrate is roughly 40%. And in the future, then after these planned investments, they are -- it's a bit over 80%. So it's clearly higher, over the whole integrate, including paperboard production.
Yes. And in terms of our production in terawatt hours, how much is that?
Okay. We can come back to that topic later.
Okay. Good. And then just on the maintenance schedule this year, you didn't quantify how much Q2 would be higher than Q1. I guess, could you just say something about Q3 at this stage? I guess the maintenance schedule is a bit different this year than last year.
Not much. I mean, the same Finnish mills have their plant shutdown now, Q2, and then Q3, we will have Kemi. And Husum then probably partly starting in Q3 and ending Q4 as last year. So pretty much similar pace.
So Q3, Q4 similar to Q2, more or less?
I didn't say that. I said that pretty much similar as last year. So I mean, the Finnish mills were Q2 and then Kemi and partly Husum Q3, and then Husum Q4, partly.
So only difference is that Q1 was a bit higher than last year?
Yes. And the fact that in Q1, we didn't have those major shutdowns.
Yes. Okay. And then on the kraftliner market, pulp market and the volumes. You sort of indicated that you this year will get the final benefits of EUR 20 million to EUR 30 million from Husum. Do you still expect that? Or is that sort of something that is now sort of -- is apparently tougher markets for the time being?
So could you repeat the expectation of what?
While the Husum transformation final leg of this both savings or earnings improvement was expected this year?
Okay. All right. So yes, no reason to change that.
Is that still sort of...
Yes, it's still valid. Yes.
We will take our next question from Harri Taittonen from Nordea.
Harri Taittonen, Nordea. Just one quick question on the Americas market and falling books for deliveries and basically they have now gone up a bit still from a year ago. But what sort of ambition level on further potential in the price mix or customer mix in the U.S. do you see? And should we look at further changes in the geographic sort of balance or the mix for the folding boxboard side and sort of price mix improvement from there?
So concerning the Americas market and the U.S. market, we have said earlier that target is to be at the level of roughly 300,000 tonnes in folding boxboard and food service board together and we are not far away from that. So we are still growing there, and then we improve the customer mix at the same time. But no major changes concerning the geographical split in Americas market.
Yes. Exactly. Exactly. Exactly. And well, I mean, just within that customer mix, I mean, is that -- is there some sort of kind of changes worth mentioning or sort of the ways how to do it? Or is it kind of a customer-specific or is it more like product-specific development or how would that work?
It's both end. It's both end. We still increase our PE-coated volumes, for example, in the U.S. So it's partly related to product and partly related to customers.
We'll now take our next question from Mikko Ervasti from SEB.
Just going back to Husum once more. I'm just trying to understand the timing of this investment announcement. How much does the technical age of the mill parts drive these investments? Or is it actually more sort of opportunistic for these efficiencies? So it's like reactive or proactive? And also related to that, how do you actually build it when you turn 2 recovery boilers into 1? Do you have to be off-line for quite long? Or do you have like more a [ length lock ] there or how does it work?
Yes. So concerning the Husum pulp mill, in general, the -- all these parts are more than 40 years old. That needs to be remembered. So it is relatively old mill comparing, for example, to the -- to Kemi mill, which is we are talking about now. So Husum is on the average then older. And concerning then this new boiler and new turbine, we have a land. So we are building that up during the -- and during that time period when pulp mill and board mill is running. So this is pretty much, so to say, plug-and-play. So we start up the new boiler and then connect that to the other process. So we don't expect any long standstill or something like that due to this renewal in the first phase.
Okay. Because at the time of the Husum board investment, some -- was it 5 years ago? It was highlighted that this is a very cost-efficient brownfield investment, and now we are getting suddenly this EUR 600 million on top relatively soon. So I mean, did this come as a surprise to you as well? Or have you communicated this or how did it go?
We mentioned that this brownfield -- I mean, this investment on the paperboard production per tonne, that was really competitive price. I mean, by using this roughly EUR 200 million, we were able to get 400,000 tonnes new capacity. So that was the kind of background of that. We didn't -- at those -- at the time, we didn't mean anything concerning the pulp mill. Of course, those days we also knew that pulp mill is old and there are old parts, and there are challenges. And already then, we knew that something needs to be done for that mill. And then last year, we had this kind of pre-engineering phase, and now we know what to do and now the decision is to renew the mill. But then still when we started up this board production back 2016, then we still had different options concerning pulp mill, but they were not ready, ready to be published, I mean.
Okay. And then more operationally, obviously you are a player in China as well. So you have this comment about the Chinese pulp market and the prices. And we have asked this from every player in the market, so are you -- do you see that this uptick now is on a sustainable level, based on what you see? What do you have to say about the customer inventories or the competitive behavior underlying end demand, these things? Or are you just commenting on the same index as we see?
Pretty much similar. Yes, so we see that the demand will be quite stable and the price -- but price development won't be that positive, and not either negative in China. But then we need to remember that historically, on the long term, the pulp prices are good at the moment. That needs to be remembered also. If you take like 5, 6, 10 years back, the prices are still in a healthy and good level.
[Operator Instructions] We will now take our next question from Mikael Doepel from UBS.
Just a couple of follow-up questions. I was starting to think about the folding boxboard volumes seen in Q2, which you say will be flat compared to Q1. Looking at history, it seems as if there is a positive seasonality usually. I think there are some seasonal effects that's driving up volumes in Q2 compared to Q1, but now you are seeing it flat. Is this a reflection of demand weakening or is it something else?
It's nothing special. I mean, order inflows are okay for the mills, and we are running in a good operating rate, expect, of course, these maintenance shutdowns. So -- and the Q1 was actually quite good. It was more than 300,000 tonnes altogether. So I think, it is quite fair estimation that the volumes remain flat. Of course, we are looking after growth. But I mean, at this point, it's fair to say that target -- our estimation is, it's flat.
Yes. Okay. And then just on the costs. If you think about your total input cost in 2019 and compare that to 2018, what kind of inflation or deflation would you expect to see?
Of course, concerning pulp, wood prices, they were -- they peaked last year, in the second quarter roughly, and then they stayed in the higher level. So from -- estimation is that wood prices this year will be slightly higher on the average than last year. And then there is a normal cost inflation that started last year, but I can't give you any exact figures. Can you Jussi? Do you have any?
Well, what we can say is that cost inflation is much slower now this year than it was last year. So low single-digit percentage.
And do you intend to mitigate that by any cost measures or are there any plans for that?
Of course, we are continuously improving our efficiencies and cost efficiency and cost competitiveness. So that is ongoing and continuous work. But now no kind of separate measures or actions, but it's no more work. No more daily work.
Thank you so much. Speakers, it appears there are no further questions at this point of time. I would like to turn the conference back to you for any additional or closing remarks.
Okay. Thank you, everybody, for good interesting questions. At this point, I wish you a nice weekend. And also in Finland, we have this celebration called Walpurgis. So have a nice 1st of May even up also next week. So thank you.