Lena Schattauer – Head, Investor Relations
Ivar Vatne – Chief Govt Officer
Andrei Kres – Chief Monetary Officer
Convention Name Members
Linus Larsson – SEB
Robin Santavirta – Carnegie
Cole Hathorn – Jefferies
Christian Kopfer – Handelsbanken
Johannes Grunselius – DNB Markets
Martin Melbye – ABG
Good morning, and welcome to this webcasted Convention Name about Billerud’s Fourth Quarter and Yr-Finish Outcomes. As ordinary, our President and CEO, Ivar Vatne; and our CFO, Andrei Kres, are right here to carry the presentation. And after their presentation, there will probably be a Q&A session.
So, after this temporary introduction, we’ll now get began. So, please Ivar, go forward.
Thanks, Lena, and good morning, everybody, and thanks for becoming a member of. So, we’ll undergo a number of the highlights and key financials for each the quarter and for 2023 in complete.
I feel the headline says all of it for a way a abstract of how 2023 has turned out. And I’ll give just a little bit extra context. So, let’s transfer into the following slide, please. And there’s no doubt that 2023 was a particularly tough 12 months and a 12 months that, in some ways, has been a little bit of a hangover from 2022 and characterised by uncommon excessive inventories throughout the worth chain. This has led to low gross sales quantity and together with gross sales worth strain and better enter prices, it has worn out many of the profitability in comparison with final 12 months.
Now, on this difficult market context, it’s crucial to maintain sturdy management of things we are able to affect. And there are two explicit gadgets that I’m happy with and the way we handle to drive a very good efficiency. Primary, holding a continued shut eye on working capital to safe a robust money conversion; and quantity two, how we rallied round our effectivity enhancement program and over delivered versus the goal we set one 12 months in the past.
One other massive occasion for the 12 months has been our soda [ph] restoration boiler in Frovi, which is now accomplished on time, on spec, and on price range. And that is one thing we’re actually happy with, on condition that a lot of that was performed and accomplished in a COVID time interval.
Now, onto a bit extra particulars across the This autumn, so subsequent slide, please. And This autumn was one other quarter going through extreme market headwind, but it surely landed broadly according to our expectations. Volumes had been gentle, largely in North America, whereas we skilled some pricing strain in each of the area. And that has led to challenged profitability and eight% adjusted EBITDA is the efficiency we actually should not proud of.
Our money circulate is a transparent spotlight with excellent money conversion, and that is one thing I’m actually happy to see as we’re placing appreciable effort to realize that outcome.
We do have some gadgets impacting comparability, minus SEK244 million, the place the most important one is the revaluation of the organic belongings via a holding in worth and that merchandise is minus SEK164 million. The opposite merchandise is the one-off restructuring value associated to our FTE discount, and that’s SEK80 million.
Now with that, let’s proceed with some enter in the marketplace sentiment. So, subsequent slide, please. And as I discussed already, market circumstances, they remained weak all through This autumn just about as anticipated. Second half of December shipments, they got here in a bit beneath what we had foreseen, which was a transparent signal of consumers defending their working capital earlier than 12 months and most of that has been moved into January, so no actual drama on that one.
Now, going ahead and into Q1, we do anticipate to see some slight enhancements, however coming from weak ranges.
On the associated fee facet, we see an increasing number of indicators that the shopper destocking part is coming in direction of an finish or have normalized already. And that ought to yield a barely higher quantity demand. Now on the detrimental facet, increased curiosity stage is beginning to chew in sure classes and pull consumption down. In that regard, we’re effectively positioned with a robust relative weight in direction of foods and drinks, the place consumption are typically extra steady. Therefore, net-net, we stay cautiously optimistic, and our order books do level in direction of a greater begin for 2024 versus how we ended 2023.
And with that, I hand it over to Andrei.
Thanks, Ivar, and good morning, everybody. So to start out off with the highest line growth for the quarter. Each areas had been sizably down in comparison with the final 12 months, and the whole group gross sales had been down 20%, with North American volumes and European pricing as the principle drivers. We had additionally detrimental combine impression in each areas as we bought extra pulp in quarter 4 this 12 months.
Forex charges continued to have a optimistic impression, whereas the divested Managed Packaging enterprise had a marginal detrimental impression. And on Managed Packaging, simply as a reminder, so the enterprise contributed with a gross sales of SEK420 million in 2023 and can clearly not contribute with any gross sales heading into 2024.
Subsequent slide, please. Wanting into the profitability growth. Additionally right here, pricing and quantity are the principle drivers behind the decline. For the primary quarter of this 12 months, we’ve got year-on-year enter value aid as we begin to meet increased base, but in addition because of the enter prices coming down sequentially in quarter 4, which I’ll get again to. The impression from our effectivity enhancement program contributed with SEK 215 million. And as Ivar talked about, is likely one of the highlights for the 12 months and likewise for the quarter as we noticed extra good progress.
The opposite is roughly SEK 200 million detrimental the place the most important merchandise is from stock revaluation had a detrimental impression of SEK2 00 million year-over-year. And as we talked about on the earlier calls, this has been a big impact versus earlier 12 months with the associated fee inflation we’ve had, however the impression is marginally full sequential growth now. After which lastly, the upkeep schedule for this 12 months was barely extra intense as we had the shutdown in Escanaba mill in quarter 4. So we’ve got a detrimental impression from increased upkeep prices.
Subsequent slide, please. Heading into area’s efficiency and beginning with the European area. Gross sales volumes had been flat versus a 12 months in the past, whereas internet gross sales declined by 12%. And the decline was pushed by decrease pricing for all classes, besides Liquid packaging board, but in addition, as I discussed, detrimental class combine with increased pulp gross sales. The market circumstances for the European segments remained weak within the quarter with the exception for liquid packaging board, which was on a normalized stage.
For liquid packaging board enterprise, we concluded pricing negotiations for vital volumes, which can have sizable and significant impression heading into 2024 now. Sequentially, the volumes for the area declined with 2%, and we noticed clear year-end impact with postponement of orders into quarter one and likewise some logistical challenges to get out volumes. Profitability for the area was down with one-third versus a 12 months in the past. And once more, the principle drivers is the decrease pricing and likewise detrimental combine.
Yr-over-year, the area’s enter prices had been down, which was supported by the impression from effectivity enhancement program. And we are able to transfer on and look into enter value growth for the area through the quarter.
Subsequent slide, please. According to our expectations, we noticed a normal decline in enter prices, with the exception for power prices, which elevated on the again of upper spot costs for electrical energy. The fiber costs had been down SEK140 million versus the third quarter, chemical compounds down SEK30 million and logistics down SEK10 million. This optimistic impression was then offset by increased power prices of SEK50 million.
And on logistics value facet, the associated fee impression from the challenges that we skilled through the quarter to get out the volumes was restricted, however we see that this can have some impression heading into the primary quarter. And so heading into the primary quarter, we do anticipate that the whole enter prices will improve by about SEK100 million, and that’s primarily from logistics of SEK50 million. Power prices anticipated to extend with SEK60 million, which will probably be offset by decrease chemical compounds prices of SEK30 million.
Fiber value is predicted to extend marginally, leading to a detrimental impression of about SEK20 million. So all in all, complete value elevated versus quarter 4 of about SEK100 million.
Subsequent slide, please. And heading then into the North American area, the markets remained weak by way of volumes in quarter 4, and we proceed to function our belongings at under 60% of capability. Web gross sales within the quarter had been down considerably versus earlier 12 months in the past, pushed by 25% decrease gross sales volumes. Additionally inside the North American area, we had much less favorable combine with increased pulp gross sales.
We noticed some worth strain within the quarter, particularly, on specialty paper. And looking out forward into quarter one, we anticipate pricing on graphic and specialty paper to come back down considerably, as new contracts for 2024 begin to kick in. Sequentially versus the third quarter, the volumes had been down marginally, and we noticed a transparent order postponement into quarter one this 12 months, the place we see that order books are enhancing for quarter one.
EBITDA for the area was down considerably on the again of a lot decrease volumes and unfavorable combine, whereas additionally value aid in comparison with the final 12 months, totally on power and logistics.
Subsequent slide, please. And only a fast touch upon the associated fee scenario for North America, which remained steady as we additionally anticipated, and actually no massive callouts for any explicit value bucket. General prices had been flat versus the third quarter and the minor modifications we’ve got inside the totally different buckets canceled out one another. That’s additionally what we anticipate heading into quarter one with flat value growth.
Subsequent slide, please. In quarter 4, we continued with our money circulate efforts and decreased our working capital additional, which resulted in a superb money conversion of 99% for the total 12 months. And I’m more than happy with the efforts that we put in to cut back our inventories through the 12 months, which was the principle constructing block behind releasing SEK700 million in working capital in 2023.
The money circulate focus implies additionally that we find yourself with a leverage of SEK1.6 million, effectively under our goal of two.5% regardless of the profitability-wise, difficult 12 months. Capital expenditures for this 12 months amounted to SEK3.2 billion, which was SEK200 million above our steering, as we selected to proceed with a number of the investments on the again of stronger money circulate.
The capital expenditures for the following 12 months is SEK2.3 billion, unchanged from our earlier steering. Board of Administrators proposes a dividend of SEK2 per share, equivalent to a payout ratio of 65% of adjusted internet revenue for the 12 months, which can also be according to our coverage. Topic to the AGM’s approval, the dividend will probably be paid out within the quarter 2 this 12 months and lead to a complete dividend quantity of about SEK500 million.
With that, I want to hand it over again to Ivar.
Thanks, Andrei. Now our effectivity enhancement program has been one of many massive successes for ’23 and one thing I’m more than happy to see how we’ve been in a position to mobilize as an organization and create a robust momentum. The FTE discount program is continuing as per plan, and we’re on observe. We’re proper now in dialogue with unions on how the plans will probably be executed throughout the corporate.
And as already talked about, we booked a provision of SEK80 million now in This autumn, which is one of the best estimate of a complete one-off value, and we don’t foresee at this stage any extra value. Now in This autumn, SEK250 million extra was added to this system, and that takes our complete 23 supply simply north of a revised goal of SEK600 million. Most of the largest initiatives over the 12 months are efforts that requires extra collaboration and systematic work throughout our capabilities. And that was precisely one of many predominant functions behind this system. Having stated that, this isn’t a dash, however a program anticipated to run over a number of years, and I’m satisfied to have potential to extract extra going into ’24.
And with that, it is likely to be a very good bridge to the following slide, please. So for ’24, we’ve got three predominant priorities, and we’ll preserve coming again to these. Primary, at the beginning, we’re continuing with preparation for our strategic tasks. And right here, the US transformation is a very powerful one. Now we proceed to guage alternate options of how this transformation will be executed, and which means exploring scope and phasing. And we’re clearly doing this in shut collaboration with suppliers. We are going to proceed to maintain you up to date on our progress through the 12 months.
As effectively for BCTMP challenge with enterprise in Norway, the visibility research is accomplished, environmental permits to the regional authorities have been submitted.
Precedence quantity two, we’ll do a selective technique improve for Area Europe. And I preserve referring to the purpose that the premise for Nordic pulp and paper manufacturing has modified, and we have to brace ourselves for increased fiber prices going ahead. Now inflation and enter value just isn’t an issue per se so long as you’ll be able to move on that pricing. However this can partly be a problem in sure classes, the place we function with international gamers, we don’t essentially see the identical value scenario as in Nordic and Europe. And which means, we should be agile to remain aggressive and assume otherwise from at the moment.
Extra info will comply with right here, however there isn’t any doubt that we have to enhance our effectivity of our mills. And never least, we have to make some daring strikes to safe value aggressive fiber sourcing. And right here we’ll discuss partnerships, decreasing fiber consumption and an extra improve of our subject fiber purchases.
Precedence quantity three, preserve delivering on our effectivity program. Andrei talked about this, we’re off to a very good begin, however we have to do extra. And that’s why we set the bar even increased for 2024 and had a goal to ship SEK 700 million, and we’ll report our progress quarterly as we’ve performed all through ’23.
So subsequent slide, please. So to spherical it up, circumstances for Q1, a bit extra optimistic versus what we noticed in This autumn, however extra of a gradual enchancment. We do anticipate volumes to enhance because the buyer de-stocking part is coming to an finish. And we’ll see a optimistic gross sales worth impression from liquid packaging board, which ought to greater than offset a number of the excessive worth strain in different classes. Enter prices anticipated to extend pushed by logistics power, as Andrei already talked about, and we’ll proceed to drive our effectivity enhancement program with precedence.
So with that, I hand it again to operator for Q&A.
Thanks. [Operator Instructions] And now we’re going to take our first query — and it comes from Linus Larsson from SEB. Your line is open. Please ask your query.
Thanks, operator, and good morning, everybody. First query in your steering for the primary quarter. If you happen to might possibly increase a bit on that. To begin with, do I perceive it proper that you simply see enter prices rising sequentially by SEK 100 million? And in addition, do I get it proper that you simply’re truly seeing rising costs? After which what’s the mixture of this? What’s the online stability of sequential enter value will increase and sequential worth enchancment? Thanks.
Good morning, Linus. So let me begin off with the enter prices. As you identified, SEK 100 million in elevated value is what we anticipate heading into quarter one, and that is fully coming from Area Europe. Whereas the North American enter prices are anticipated to stay steady or flat. When it comes to pricing, I’m going to separate it up between areas. In order I discussed, we’ve got had a large worth will increase on liquid packaging board, which is able to begin to kick-in, in quarter one, however that will probably be offset with the pricing decline, primarily inside paper as we additionally there see quarter one contracts kicking in.
So in complete, we anticipate a worth improve of about 1.5% for Area Europe in quarter one in comparison with quarter 4. And for Billerud North America, the pricing will come down as we additionally see new contracts for this 12 months kick-in. We anticipate the value decline on complete for Area North America of two.5%.
Good. That’s very useful. Thanks lots, Andrei. After which possibly transferring to capital allocation, and possibly when you might present some type of replace as regards to North America. What are the choices on the desk actually? And how much a time line are you ? What are the parameters that are essential out of your perspective right here?
Sure. Hey, good morning, Linus. It’s a very good query. No, however I simply wish to proceed on what I discussed already again in October that we stay assured about the entire enterprise alternative and the context that the paperboard domestically produced in North America can yield and supply. But it surely’s very clear that it is a very massive transfer for Billerud and we wish to make it possible for that is proper, and we take our time now to guage totally different choices. And sure, it must land on a really sturdy proposition. I’ll come again to that in a second and absolutely create shareholder worth.
I feel the 2 items we take a look at largely now could be to discover totally different variations of scope and timing. And I feel all of them have execs and cons, and these are sometimes weighted up in direction of, not least the CapEx it’s going to require. However I’ve to say at this stage, I actually do not need way more info to supply. I do know that there’s a whole lot of curiosity on this subject. So you’ll be able to absolutely or relaxation assured that we’ll replace you on the progress in 2024 and we’ll come again as quickly as we’ve got one thing extra to say. And I don’t actually but have that, name it, estimate, however you’ll be up to date, I feel, all of our quarterly report how we’re progressing.
And it’s key. I simply wish to say this from what are we searching for? It’s apparent the stability that it is a challenge that needs to be clearly optimistic from a internet current worth. It additionally wants to present us return total on capital employed. And absolutely, that needs to be north of what we’ve got as a little bit of a guiding star of 13%. And we glance into this additionally by way of what the CapEx this system will imply and the way we crush on the stability sheet. So all of this had been type of method up in direction of in a giant pot and attempt to discover a good resolution on this. However extra to come back Linus, on that later down the road.
No, that’s honest sufficient. Might I simply ask on CapEx. You guided the 2024 CapEx of two.2 foundation plus SEK100 million referring to additional that’s what you’re detailing. Aside from that, what is likely to be added? I imply, might we assume that nothing referring to Area or North America will present up in 2024, or is there anything doubtlessly which might make CapEx larger in 2024?
No. I imply each of them can, I imply, hypothetically, not one thing that may actually have any estimates on at the moment as a result of, as I stated, for each of the instances, we’re not ready but the place we’re prepared to maneuver forward in any respect. So in the interim, that is the type of two gadgets we do have. That’s the bottom CapEx, as you talked about within the final tail of the restoration boiler. And that’s this view for the time being, relying then on how we progress on Norway and the US. I can add one thing, however actually nothing I can both trace on what that may imply. That will probably be info we come again to doubtlessly later within the 12 months.
Okay. Thanks for that.
Thanks. Now we’re going to cowl subsequent query, simply give us a second. And the following query comes from the road of Robin Santavirta from Carnegie. Your line is open. Please ask your query.
Sure. Good morning, all people. Thanks for taking my questions. To begin with, relating to the effectivity program you have got, what are the important thing gadgets in that program? And the way a lot of a sequential enchancment in earnings ought to we anticipate already now in Q1, Q-on-Q?
Sure, I’ll begin with that — after which I’ll let Andre simply touch upon the potential impression you had for Q1. Now pay attention, I feel that the principle function of this program just isn’t, at the beginning, the associated fee discount, and that’s additionally why we intentionally name the effectivity enhancement program.
I feel we’ve got acknowledged through the years that also once we take a look at challenge throughout totally different capabilities that we’d like, even tighter collaboration, that potential has not been at a passable stage. So when you take a look at examples, I imply, it’s a fairly lengthy and broad listing, however I can absolutely provide you with some examples to present some context of what that’s.
I imply TRIM [ph] is a fairly identified problem on this trade on how do you utilize the entire width of the paper rolls in any good method. That’s not one thing that both operation or industrial can do a mortgage, however they must be that in fairly good tandem. And that’s a fairly large piece. I feel we’re nonetheless wanting ahead to have a look at, as an illustration, consumption of all of our chemical compounds, experiment totally different alternate options of chemical utilization, how we are able to additional stretch ourself of optimizing a number of the recipes even additional. And that’s one thing that fairly often you’ll have each industrial operations and board provide in a very good interval to make that as profitable.
One other instance, possibly speak about our outbound logistics particularly for Europe and the way that may be optimized even additional with type of much less vehicles and extra boats and extra trains. It’s an space the place we’re already fairly superior, however we be ok with that, hey, this needs to be much more into that potential. And we already talked about this in Q3. We’ve already added now the FTE discount of 350 into this program. So that ought to provide you with some sense of what we’re searching for. It’s a fairly lengthy listing of a giant challenge, however I feel the important thing denominator is to search for extra collaboration throughout. Possibly I’ll hand it to you, Andre, for the Q1 impression.
Sure. Thanks, Ivar. And Robin, on the sequential impression, if we glance into quarter 1, 2024, we estimate that the impression will probably be within the area of SEK50 million to SEK60 million in comparison with the fourth quarter.
Q – Robin Santavirta
All proper. Thanks very a lot. Second query I’ve is said to this technique of grade work in Europe, you’re most likely form of early days, however are you able to increase a bit on that? And in addition, you stated effectivity should be at a excessive stage in mills. So is it possible that, that form of sport will probably be form of one thing that may result in materials CapEx investments within the subsequent few years, or is it different stuff that you simply’re ?
Sure. No, however I’m completely happy to take action. And I feel, as you say, we’ll most likely come again even later with extra content material on this, however I did point out already fairly consciously that there’s two gadgets, and let me simply take them piece by piece. Once we take a look at the effectivity of our mills, we don’t proper, however I feel it’s honest to say that we’re not doing nice, and that’s what actually we’re striving for. And that sometimes, when you use the benchmark of OE, set it as a proxy. And I feel it’s a sophisticated query of what drives that. I feel particularly, once we take a look at our board mills, we do acknowledge which have come fairly a good distance since we began off the KM7, how the board mills work as a unit. And we put the totally different, you’ll be able to say, manufacturing segments on every of the machines which are greatest outfitted to try this job.
Now having stated that, there may be simply extra potential on the market. And I feel we are able to additionally fairly comfortably say that we additionally anticipate extra from our paper mills, and that is on common and type of in a normal assertion. Initially, this will probably be methods of working standardization and the way we actually take the corporate has on a better diploma versus we’ve got performed previously. So I don’t anticipate at this stage that this can include a really massive CapEx construct truly on the contrary, our predominant ingoing assumption is that almost all of this effort ought to and will probably be lined from the bottom CapEx that Andrei already talked about.
Extra to comply with on that. I feel the opposite one is round the entire fibre scenario in Nordic. And there’s no doubt that, hey, we, as the most important fibre purchaser in Nordic, we should be brave and we’ve got to take sure strikes on condition that the scenario is actually beginning to tighten up and we’ve seen that it has tightened because the conflict in Ukraine.
I feel for us, it means we have to take a look at many alternative parameters. Partnerships is one. We already talked about our chapter in Norway with Viken Skog, which is one thing we’re enthusiastic about. Then you definitely speak about fiber optimization and even a better diploma of CTMP is vital for us. I’d have talked about this as a part of our effectivity program, how we steady have to problem ourselves of what’s the optimum and what’s even a greater recipe formulation in gentle of now that the fibre market has tightened.
And I feel the third one is we’ve got already taken steps over the last quarters and 12 months to extend our presence of what we name subject fibre purchases and that has yield outcomes which are good and proud of. Possibly we wish to do extra. So that allow me provide you with just a little bit extra context of some or two gadgets. However as you stated to start with, that is an space we’re anticipated to come back again with extra info throughout 2024.
Q – Robin Santavirta
I perceive. Thanks very a lot.
Thanks. Now we’re going to take our subsequent query. Simply the second. And the following query comes from the road of Cole Hathorn from Jefferies. Sir, line is open, please ask the query.
Good morning. Thanks for taking the query. Possibly similar to just a little little bit of commentary specializing in Europe. Might you give any variations in what you’re seeing, possibly not by finish markets, however by classes, how are you seeing type of containerboard? How are you seeing stack and specialty into 2024 in addition to cartonboard, you’ve been fairly clear on liquid packaging board?
After which on the European area and the alternatives there, it sounds such as you’re specializing in type of optimizing the product combine and footprint. I imply, are there actions you possibly can take to concentrate on type of the worth over quantity facet, doubtlessly consolidate some volumes from some mills or some machines to maintain your decrease value belongings at higher working? And would this evaluation embrace enthusiastic about some rationalization of capability in any respect? Thanks.
Hey, good morning. Properly, truly going to start out with the second query, earlier than I’m going into the primary. No, however I feel you’re completely proper. And that is one thing we have to ask ourselves constantly. And I’m very positive that the identical query is being requested by all of the gamers now within the Nordic area.
I feel we should be very clear on what combine and what worthwhile development we are able to see going ahead. That’s an important piece on how we will be much more selective on what providing we deliver out to the market. It additionally signifies that doubtlessly the providing we used to have previously just isn’t essentially, which is 2024 and onwards.
It actually additionally signifies that how will we make sure that all of our belongings, and which means mills and machines they keep aggressive and never least our skill to move on that potential value inflation that comes our method. I do know that it’s a little bit of a generic reply together to what I discussed already on the fiber possibility. However I can solely say that that is now extra necessary than ever within the Nordic area, and it’s very excessive on our agenda and a part of the Europe technique.
If I transfer into type of your first query, I can perform a little little bit of a tour on feedback per class. I imply beginning with cartonboard, I feel, the underlying theme there that’s nonetheless a weak underlying demand, and we see that each in premium and energy merchandise. And destocking is getting there, however most likely that is likely one of the few classes the place we are able to see some indicators that it’s nonetheless not accomplished. And in the principle market, Europe, for us, macro economic system, demand is type of steady, however at a low stage. So it’s probably not discovering the gear but versus what we see in different classes.
And if it goes straight into containerboard, sure, I imply, underlying demand just isn’t sturdy. And there are some challenges additionally there, however the scenario is unquestionably extra manageable for virgin than recycled. And as you already know, we’re, at the beginning, within the former. And inventories have actually come down and nearly to the purpose we are able to say that the destocking is type of a previous chapter on that one.
Fluting for us is a good market, however we’re nonetheless all proper. We do selective worth improve and pushes for sub cost, et cetera, for the affected geographies, however underlying consumption is comparatively unchanged. I imply on liner, I feel, we are able to even get extra confidence say that, hey, you already know all of the destocking is completed. And it’s nonetheless on a comparatively low stage, however getting possibly just a little bit higher and we see some small indicators that order books are selecting up. I feel the North America containerboard continues to be very weak, however for us, this isn’t a giant market in any respect for the time being.
If you happen to transfer on to sack, I imply, Europe continues to be weak and pushed by low exercise in development. Rising market is barely higher, and we do see a little bit of a pickup on order books there, particularly, for the brown sack. We’ve even introduced now we can have a worth improve of brown sack 8% from March 1. No plans for something on that on the white sack, which continues to be a bit weaker and at the beginning, discovering its house in Europe. However I can affirm that the amount for sack is predicted to extend, particularly once we go into Q1 versus This autumn.
And when you go to kraft paper, I imply, underlying demand continues to be powerful. And I feel it’s just a little bit totally different when you go brown versus white. I imply, brown kraft paper for us in direction of e-com is actually nonetheless fairly depressed. And the white which matches extra in direction of full service is best. And there we are able to additionally confidently say that we see very clear indicators that the destocking is accomplished. And therefore, we do anticipate additionally there the volumes to start out arising, however not a lot is going on on the value. So hopefully, that provides you some taste of the place we stand on the classes.
Thanks very a lot for that colour. I imply possibly simply going again to the primary query, you alluded to it that type of optimizing the product combine, enthusiastic about the way you produce — that may profit your fiber prices. I’ve yet another, which is in your upkeep steering for 2024. I do know the upkeep prices appear a bit decrease than they did final 12 months. Is that simply because the place we’re in type of the cycle? And I observed that Quinnesec, which you — previously, you’ve talked about, type of, a giant upkeep spend each, type of, two or three years. It simply appears just a little bit decrease. So I’m simply questioning if there’s something within the upkeep schedule that we must always concentrate on?
Hello, Cole, I can take this one. So to start out with the Quinnesec mill, the final improve we had there, which was in 2022, that was a serious improve, in order that was considerably increased, the place we additionally elevated the pulp capability for that mill. Now once we — and the upkeep shutdown at this mill, as you would possibly know, is each second 12 months proper now. So heading into 2024, we can have a upkeep shutdown however with a decrease impression. Then if we take a look at the whole steering for the shutdowns, we’ve got revised our steering, as we talked about, and that is actually resulting from revised calculation of the impression, which is principally what volumes are we shedding by way of stopping the machines through the upkeep shutdown interval. So it’s a minor revision downwards and simply adjustment of the calculation.
Thanks. Now we’re going to take our subsequent query. Simply give us a second. And the following query comes from the road of Christian Kopfer from Handelsbanken. Your line is open. Please ask your query.
Nice. Thanks very a lot. Good morning, everybody. Only one brief follow-up from my facet. Sorry, if I missed it. Possibly Andrei, you talked about it, however both method on the amount facet, you have got talked about that you’ve gone via a fairly tough destocking in interval — in 2023. How do you see the restocking taking? What, type of, impression do you see for Europe versus North America in Q1 by way of extra particular numbers?
Yeah. I’ll let Andrei come to the precise numbers. I feel the 2 results, I feel we simply have to bear in mind going into 2024 is that; a, we do anticipate quantity uplift simply on the wake of the destocking is majorly accomplished on most classes. However on the similar time, and it is a little little bit of the unknown that, hey, there are specific classes which are beginning to purchase the upper curiosity stage and it’s holding down the underlying consumption. However net-net, we’re nonetheless what we name cautiously optimistic that we must always see an improved quantity quantity for 2024 versus 2023 as an entire.
However Andrei, possibly some fast touch upon the quarter.
Yeah, I can follow-up on that. And if we take a look at quarter one, I imply, as I discussed through the presentation, we’ve got had some year-end results. So we noticed a transparent signal of decreased orders on the finish of the 12 months with our clients managing their inventories.
Wanting into quarter one, we might anticipate some spillover from that, but in addition as Ivar went via the class, some higher outlook inside a few segments. So all-in-all, we might take a look at improved volumes within the area of 20,000 to 40,000 tonnes in quarter one versus quarter 4.
All proper. Good. Thanks very a lot.
Thanks. [Operator Instructions] Now I’m going to take our subsequent query. And the query comes line of Johannes Grunselius from DNB Markets. Your line is open. Please ask your query.
Sure. Hey, everybody. Most of my questions have been answered now, however I’ve one query and one follow-up. However on the money circulate facet, you probably did very effectively within the fourth quarter, as you stated, releasing loads of internet working capital. Will there be any, form of, swing — had been there any temporal results there, principally? Would you anticipate a few of that launch to come back again in Q1 and different quarters, or had been there structural modifications behind that decline in internet working capital? That’s my first query.
Sure. And I can take that, Johannes, good morning. So by way of the working capital, I imply, we’ve got labored in a structured method all year long to cut back the working capital and launch money. With that stated, there are all the time some year-end results. We don’t anticipate any main comeback by way of tying up extra capital in quarter one, however it could be marginal impact in quarter one.
Okay. Okay. Good to know. Good to know. Then a little bit of a follow-up on the earlier query relating to the amount facet, you had been very particular there, giving us a spread in your very useful. What’s your touch upon how we must always take a look at volumes for North America for Q1 and quarters past that?
Yeah. I can begin on that piece. I feel we had been most likely fairly reluctant to present a quantity for the entire 12 months.
However when you simply type of take into consideration this logically, that the, the most important route operation proper now that you simply anticipate for subsequent 12 months is coming from North America. And that’s fairly clear once we take a look at what working charges we’ve had different mills there for the final quarters. I feel Andrei talked about once more that we had one other quarter in and round 60%, which is, to be trustworthy, extraordinarily low.
We’ve maintain significantly better in Europe, over the 12 months. And I feel, name it, an 85% working fill charge for Europe just isn’t a foul estimate for 2023. That signifies that there needs to be nonetheless alternatives additionally in Europe. However I feel it’s honest to say that given our broader portfolio, it’s just a little bit simpler to seek out some alternate options and fill the machines with worthwhile quantity in Europe versus the US.
So for that quantity that as Andrei talked about, I feel we might anticipate US to have the larger piece. And looking out into 2024 versus 2023, I will probably be very stunned if not the larger quantity recoveries is coming from US.
Okay. For Q1, sorry, I may need misunderstood it, the 20 to 40 tonnes in uplift quarter-over-quarter. Is that for the entire group then for each divisions?
Sure, that’s appropriate.
Okay. Okay. Obtained you. Okay. Thanks for answering the questions. Nice.
Thanks. Now we’re going to take our subsequent query. Simply give us a second. And the following query comes from the road of Martin Melbye from ABG. Your line is open. Please ask the query.
Good morning. Might you simply affirm how giant these liquid packaging board worth will increase have been? And second query, you stated one thing a few kraft paper worth modifications from March, which I missed you do repeat that, please?
Yeah. Good morning. Martin. So by way of liquid packaging board, I imply, we don’t remark particular person contracts, however the worth will increase that we’ve got achieved are sizable. And if we take a look at the whole section as an entire, it could add roughly SEK 800 million in 2024 in comparison with 2023 in pricing. And in — inside the sack paper, the determine Ivar talked about is that we intend to extend the costs for brown sack with 8% ranging from March this 12 months.
Thanks. Now we’re going to take our subsequent query. And the following query comes from the road of Cole Hathorn from Jefferies. Your line is open. Please ask a query.
Thanks for taking my follow-up. Only one touch upon the way you see fiber prices within the Nordic area creating. And I do know you’ve given for the remark for the 1Q, however I’m simply questioning how your ideas are altering via the total 12 months of 2024. And I need you to hyperlink that to have fiber prices being increased for longer, have they modified the way you’re enthusiastic about setting costs to your product classes going ahead? Thanks.
No. Pay attention, it’s an excellent query, Cole. So thanks for approaching that subject. I imply, when you begin on the wooden value. I imply, we’ve got seen some worth actions upwards in Sweden final week, however that needs to be stated, that’s at the beginning on sawtimber. However it’s little doubt, when you simply play with the situation that the entire Europe now and particularly, Nordic have had a manufacturing stage in 2023, which has been on a a lot decrease than normalized stage. It’s not unreasonable to assume that the development for wooden costs will then proceed upwards in 2024 if we’ll begin to see elevated manufacturing stage as an entire.
We don’t have an estimate of what that may imply, however that’s a bit our learn of the development. However I can affirm that what has already been introduced final week, that won’t hit our P&L earlier than Q2. And the worth of that in the interim, it’s very restricted. It’s extra within the SEK 5 million, SEK 6 million vary, and that’s annualized. So, to date, that’s not one thing in any respect that we’ve got a lot on the radar.
And I feel the second level could be very fascinating, and it’s a very good one. as a result of there isn’t any doubt that when you contemplate that enter value will increase are actually not anticipated to ease and truly to the nation would possibly begin to go up. We’ve a really clear expectation that gross sales costs also needs to begin to transfer. And positively, certainly we’ll take the duty to be early on capturing a chance that may come up. After which simply for instance of that is simply what myself and Andrei touch upon is the 8% worth improve now that we’ve got introduced not too long ago on Bronze.
Thanks. Very clear.
Thanks. There are not any additional questions. I’d now like handy the convention over to your audio system for any closing remarks.
Yeah. We are going to thereby conclude this convention. So thanks all for collaborating, and welcome again subsequent time once we report the Q1 report. And please notice the date for that, the twenty fourth of April. Thanks, and goodbye.