Arctic Paper (ARP) ABGSC Investor Days summary

Company overview and strategy

• Operates five mills in Poland and Sweden, with over 1,500 employees and EUR 610 million turnover in the first three quarters of 2024.

• 4P strategy since 2021 focuses on pulp, paper, packaging, and power, aiming to diversify and align with market trends.

• Investments target efficiency, automation, and new technologies in traditional segments, while expanding into packaging and renewable energy.

• Packaging segment leverages global shift from plastic to renewable materials, with a new fiber tray unit in Kostrzyn nearing operation.

• Energy segment targets self-sufficiency by 2030, with renewable capacity set to grow from 27 MW in 2025 to 80 MW by 2030.

Financial performance and investment plans

• Planned investments of EUR 30 million until 2030, funded 30-40% by internal capital, with a net debt-to-EBITDA target below 3.5%.

• 45% of EUR 300 million investment will go to packaging and energy, aiming for over 25% of EBITDA from these segments by 2030.

• Paper segment saw a 5% revenue decrease in Q3 2024, but average prices remain above pre-pandemic levels.

• Pulp segment revenues and prices are more stable, with growth driven by the shift from plastic to wood.

• Cash flow in 2024 heavily allocated to investments, especially in energy and packaging.

Operational highlights and market positioning

• Holds leading positions in European design and premium book papers, with strong brands like Munken and Arctic Volume.

• Focuses on margin over volume in response to weak European demand, maintaining profitability.

• Packaging production unit for molded fiber trays to be operational by year-end, with additional development of own packaging paper brands.

• Energy projects include solar farm expansion, biomass boiler modernization, and wood pellet production.

• Maintains a strong balance sheet and stable margins, with a net debt-to-EBITDA ratio below zero.