<a id="bm-comp-2d736d40-820a-4315-a72a-d54e1e314d81" name="bm-comp-2d736d40-820a-4315-a72a-d54e1e314d81" class="BMCustomAnchor"></a><table><tr><td bm-component-id="2d736d40-820a-4315-a72a-d54e1e314d81" style="vertical-align: top; width:100.000000%;"><ul><li>Q4e: Clean paper EBIT of ~PLN 10m</li><li>Paper prices down, demand muted</li><li>Fair value range of SEK 40-80</li></ul></td></tr></table><a id="bm-comp-70e91b45-306f-47cd-9e72-f728e8550a3a" name="bm-comp-70e91b45-306f-47cd-9e72-f728e8550a3a" class="BMCustomAnchor"></a><table><tr><td bm-component-id="70e91b45-306f-47cd-9e72-f728e8550a3a" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3" style="text-align:left;">This is our earnings bridge:</h3><p style="text-align:left;"><font color="#00204E"><font color="#212529">We expect Q4 Paper EBIT of ~PLN 10m, down from PLN 20m in Q3'24. The main effects q-o-q are likely: PLN -18m from lower paper prices, PLN +5m from marginally better volumes (seasonality effects) and PLN +3m from higher pulp prices. Pulp EBIT will likely be ~PLN 31m lower q-o-q driven by lower pulp prices and maintenance at Rottneros. Hence, we expect Q4 group EBIT of ~PLN -2m vs. PLN 48m in Q3'24. Arctic Paper will also book a ~PLN 30m one-off gain related to energy compensation. We expect Q1 Paper EBIT of PLN 10-20m driven by lower pulp prices.</font></font></p><h3 class="bm-h3">Paper prices down, demand muted</h3><p style="text-align:left;"><font color="#000000">Paper prices declined by ~1% in Q4 q-o-q (driven by coated fine), but the paper markets are helped by 15% supply cuts in '24-'25 (~3.8mt). However, demand growth has abated lately, which leaves the utilisation rate lower vs. historically (~89%). Nevertheless, the utilisation rate has improved vs. '23 (~70%) and landed at ~79% in '24.</font> For '25e, we see a utilisation rate of 81-82% as the full capacity cuts are visible. Our paper price model points to prices increasing ~5-10% in '25, driven by higher pulp prices and improved capacity utilisation in '24, but we expect demand to stay relatively flat<font color="#000000">. Arctic Paper is well-positioned, as it is a leading premium design/book paper player with a decent overall position on the cash cost curve.</font></p><h3 class="bm-h3">Fair value range of SEK 40-80</h3><p>The company is trading at an EV/CE multiple of ~0.8x and a '25e EV/EBIT of ~6.0x. We apply three valuation methodologies, and arrive at a fair value range of SEK 40-80. The fair value range implies an EV/CE range of 0.7x-1.5x, or a '25e EV/EBIT of 5x-11x.</p></td></tr></table>