Operator: Good day, and thank you for standing by. Welcome to the Sappi Q4 2025 Results Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Steve Binnie, CEO. Please go ahead.

Stephen Binnie: Good day. Thank you, everybody, for joining. As always, I'll go through the investor presentation calling out page numbers as I move through. I'm just starting briefly on page 2, just drawing your attention to the forward-looking statements disclosure. Turning to page 3, which is summarizing the year as a whole, the financial year 2025. And it's fair to say it was a challenging year, marked by ongoing global economic weakness. We did see difficult market conditions across all our segments actually, and obviously, partially driven by the weak economic conditions, but also the global trade tensions. As a result of all that, we saw downward pressure on selling prices. And from a materiality perspective, particularly on dissolving pulp, they dropped quite sharply during the year. And on the paper side, added to that, we have seen excess supply globally in our key market segments. Despite all those challenges, we did have some operational highlights. We saw our DWP and packaging volumes growing year-on-year. And in the graphic paper space, we were able to gain market share. Thrilled to say that we've obviously completed the Somerset PM2 conversion and expansion, and that's an important step in our strategy and the machine is performing well. In Europe, we continue to make further rationalization to take cost out of the business and to improve capacity utilization. Then on slide 4 is a summary of the quarter itself. Relative to the prior quarter, Q3 of this financial year, numbers up a little bit. However, the market conditions remained challenging. We did see sales volumes pick up for pulp and packaging, and we also benefited, obviously, because there was no maintenance shuts. Regionally, Europe continues to be in a challenging place. The economic situation there is still difficult for us. And across many of the paper grades, we see excess capacity. North America, obviously, beginning the ramp-up of the -- the Somerset 2 conversion. We saw improvements in volumes and modest improvement in profitability. Obviously, you're not at optimized levels, but we start to see that improvement come through. And in South Africa, I think South Africa had a pretty good quarter, actually. Obviously, lower dissolving pulp prices are the big story there. But on the packaging side, a reasonable quarter, albeit that on the packaging side, even selling prices there globally have an impact on the South African business. Slide 5 has the bridge from last year to the current year. And the big story is obviously the lower selling prices and its impact on our business. It's across all the segments, and that kind of dwarfs all the other variables when you look year-on-year to give us the $111 million. On Slide 6, we did see relative to the prior quarter, we did see variable costs coming down in each of the regions. Pulp at relatively low levels. And obviously, that benefits the paper business, but obviously indirectly has a negative impact on DWP prices. Energy prices coming down a little bit as well, but really across the board. And then turning to slide 7, which is the evolution of our net debt and our leverage over the last few years. And obviously, we saw the peak through the COVID period. We saw it coming down substantially. We made a decision to invest at Somerset, obviously. And then in the current year, we've got the higher CapEx, which is now behind us. We also were negatively impacted by the exchange rates, the fact that a significant proportion of our debt is denominated in euros. And when you convert that to dollars, you get the negative impact. But having said that now, the investments are now behind us, and we would expect our debt to start coming down. You saw it coming down a little bit in this quarter, and we would expect that to continue over the next quarters ahead and into the next few years. And then the debt maturity profile is reflected on page 8. And maybe just a couple of callouts. Firstly, on the short-term debt, which is 2026, you can see we've got a chunk of short-term debt in the box there, the $224 million. We are - and we did put out an announcement on this. We are in the process of terming out some of that debt and making good progress, and we'll give an update as soon as -- as soon as that's complete. Perhaps the other major refinancing that we've got coming up over the next few years is the 2028 bonds, Eurobonds, it is about at EUR 400 million. We obviously monitor the markets, and we'll pick the right time to refinance that as we move into the new year. And then on cash flow and CapEx, obviously, a tough year and lower profitability, which has meant that we utilized cash during the year and you add in the CapEx as well. So $360 million that we utilized during the year. CapEx going forward, 2026, we are estimating at $290 million. And then 2027, we're committed to keeping that below $300 million. We haven't finalized the number yet, but it will be below $300 million. Taking that forward into Page 10. As you all know, we gave a recent update on some of the work that we're doing on the balance sheet on the funding side. Obviously, with the lower profitability, our leverage ratio increased. And because of that, we proactively renegotiated our covenant levels through next year, great support from the banks, unanimous support, and we've negotiated significant -- enough headroom to manage through this peak time. We're terming out the short-term debt, as I said, and overall, with that debt reduction focus back to basics, focusing on productivity, cost containment. At the same time, we've obviously stopped the dividend, and we have some initiatives to reduce costs, particularly in the European business, and I've got a slide on that just now. The Thrive strategy is reflected on Page 11. And obviously, our focus in the short to medium term is this back to basics, but we must never lose sight of our strategic focus. And obviously, operational excellence is key to Back to Basics, maximizing productivity and efficiency and reducing costs. We continue to focus on enhancing trust across all our stakeholders. In terms of growing our business, we're not going to be taking on any projects or any material projects in the next couple of years. Our focus is on ramping up the projects that we've done and primarily, obviously, that's the Somerset PM2. Ultimately, we're laser-focused on getting the debt below $1 billion. We know it's going to take a couple of years, but with all the actions that we're taking, and we're confident that we'll get there in the medium term. And then obviously, with a strong focus on our maturity profile, which I talked about already. Slide 12, I'm not going to repeat because a lot of this is similar to the prior slide, just to say that we are in this consolidation phase, focused on costs, focused on efficiency, maximize production. We've got a $60 million target to take out costs in Europe, and that -- much of that's already been made public, but it's not just Europe. We are focusing on the other regions and at the corporate level. And on top of all that, working capital optimization. It's only once we complete all that, that we would consider dividend payments and any growth opportunities. The Slide 13 just talks about our capital allocation priorities, and I've touched on this. So I'm not going to repeat everything here. But obviously, strongly focused on reducing debt, ramping up on PM2, ensuring we get a return on capital employed above our costs -- above 2% of our WACC -- 2% above WACC. And then making sure that we optimize our product portfolio and matching graphic paper capacity to market demand. Slide 14 is a specific slide on Europe, which we thought would be useful. It just breaks down the $60 million saving that we've got. You can see it's across some -- the mills and at the corporate level or the central regional level. We're closing 2 machines at Alfeld, at Kirkniemi. At Ehingen, we are reducing shift details. And at Gratkorn, which is our #1 mill in Europe, looking at a number of initiatives to optimize product -- production and profitability. Then turning to the segments. And again, I'm not going to go into detail, but just to summarize, and I'm on Slide 16. The demand -- the underlying demand for DWP remains good. And we are fully sold out, and we continue to have our customers pushing for volume. The challenge is obviously that global prices have come off, and that's linked to various macroeconomic conditions. And I also think that the lower paper pulp prices have not helped as well with carouseling and substitution there. But overall, volumes are good. Also on the production side, things are going -- going better as well. Packaging, a really tough year -- sorry, Slide 17. Packaging, a tough year across all the regions, actually. Europe, a modest recovery. But as I said earlier, the European economy continues to be challenging, and there's overcapacity in all the key product categories. North America, we've begun that ramp-up. The machine is performing well. We're adding volumes, and we're confident that we'll continue to do that in the quarters ahead. South Africa had a very good citrus market season, which is our primary product -- that's our primary market for our South African containerboard business, a good season. The only challenge -- well, the one challenge we have is that global containerboard prices are weak, and that does have an impact on domestic selling prices. And then on graphics, we continue to be proactive in terms of managing our capacity. In North America, the domestic markets tightened. Obviously, we took out PM2 out of graphics. So that supported the market balance, and I think it has helped ensure that we have stable selling prices and good margins. Europe, the challenge in Europe is the excess supply, and that obviously impacted on selling prices in that region, which had a negative impact on profitability. And then Slide 19, just a very brief summary of the regions. And all in all, you can see selling prices across the board down. And then some of it, we did get cost savings in Europe to offset some of that, however, not enough. And then in North America, cost’s up, obviously, because we had the initial ramp-up at Somerset and that obviously impacts on efficiencies and usage and the likes. And then in South Africa, we did have some of the -- some of the raw material costs up year-on-year, some of the chemical costs and wood costs there. Slide 20 has some of our key awards and the highlights. I'm not going to go through all of them. We're particularly proud of our rankings in the Forbes Best Employer and top companies for women. We were 144 in the world for top companies for women, the second in South Africa, really very proud of that. But even best employers as well globally to come in at 289. And when you look at the companies on that list, we're very proud of that. Other than that, we continue to focus on our science-based targets and our wood certification, which gives us a strategic advantage. And then you can see the links to our reports there as well. Turning to the outlook, and I don't intend going through every bullet. I'm on Slide 22. I think it's fair to say that the market conditions continue to be challenging. We do believe that as we progressively move through 2026, things will get better. DWP has stabilized. You saw a little bit of an increase in that quarter, and we continue to think that that will be the case as we move through 2026. We'll obviously have the benefit of the ramp-up in PM2 as we progress quarter-on-quarter. And then on the graphics side, it's about proactively managing that capacity. The cost side, yes, some of the -- some of the raw material costs are relatively low, and we'll look for opportunities there. We do have a maintenance shut -- scheduled maintenance shut at Somerset. That's an 18-month shut, which will have an impact of about $20 million, and we obviously took that into account in our guidance. You've heard me say it many times, back to basics, focus on what we can control, focus on efficiency, focus on cost, debt reduction, very disciplined capital allocation. And taking all that into account and the shut, obviously, we estimate that the EBITDA for -- the adjusted EBITDA for the first quarter of 2026 will be below that of the first quarter we've just reported on. So, operator, I've gone through the presentation. I'm now going to put it back to you for questions.

Operator: [Operator Instructions] Our first question comes from the line of Brian Morgan of RMB Morgan Stanley.

Brian Morgan: Steve, if I can ask 2 questions. First question is on Europe. Pretty torrid quarter, September quarter, like saw what the rest of the -- the rest of the paper packaging management, but none of them were EBITDA negative. So just a question on that is, was there -- in terms of those machines that you closed during the quarter, were there sort of non-normal effects coming through EBITDA, which we can reverse out in coming quarters?

Stephen Binnie: Brian, I think specifically, the two machines that we took out were negative -- negative EBITDA. Obviously, by taking those out and optimizing the product mix and the cost base associated with that, we do think we can get improvement there. One of the challenges we face is that at Alfa specifically, our energy costs have risen substantially since the pre-COVID times. And it’s -- it's meant that those -- those machines that we're closing became uncompetitive, and we've moved around our portfolio. And that combined with obviously all the other initiatives, we're focused on getting the packaging back to positive EBITDA.

Brian Morgan: Okay. So, without -- without any tailwinds from the market, you'd expect that European business to turn EBITDA positive even modestly?

Stephen Binnie: Are you talking about -- yes, in the year? Yes, next year, yes, definitely. Yes.

Brian Morgan: Yes. Okay. 2026. So, without any tailwind, any pricing benefits or anything like that, you would expect an improvement?

Stephen Binnie: Yes.

Brian Morgan: Okay. Steve, could you just flesh out PMT now? Just I'd be interested to know if you worked out how much of an EBITDA headwind that conversion had for you through the course of FY '25? And then also, if you could just chat to us a little bit about how to think about maybe an EBITDA ramp-up. I know you don't give us numbers but just help us to think about how that might evolve over the next couple of quarters.

Stephen Binnie: Yes. Interesting question. Look, I mean, obviously, we had the direct costs of the downtime, and we revealed that in the last two quarters, and I'm looking at my colleagues, I think it was $22 million and $21 million. So, there was about $40-odd million specifically. But then you obviously had the indirect impacts of the efficiencies at the mill. Brian, I don't have that as a specific number. But clearly, it's north of $10 million. I don't have that as a-- as an absolute number, but -- but it had a material impact on the profitability. Now obviously, on top of that, going forward, you're going to have the additional volumes because we've doubled the capacity of the machine. Now Q1, we've got the shut, and you've got to take that into account when you -- when you're quantifying profitability of the North American business. But progressively beyond that, we're still very confident in the ramp-up. We've been signing up customers. We've been adding volumes. Yes, obviously, the delay had an impact. Yes, we have that trade-off between price and volume, which we've got be – we’ve got to delicately manage. You know that and this is public, SDS prices in the U.S. have come down a lot over the course of the last 18 months. And we've got to carefully manage that, but we are confident on the ramp-up. And we know the machine is performing well. We know that the customers like the quality of the product coming off there. And we're still committed. We said it all along that by the time we get to the end of Q4 of this -- this new financial year, we're confident that the machine can be substantially full.

Operator: Our next question comes from the line of James Twyman of Prescient.

James Twyman: Two to start with from me. The first one is the energy credit gain that you always get in Europe in Q1. Could you give us some idea of the scale of that and whether that's included in your guidance? And secondly, the 5 measures you're doing in Europe, could you give us some idea about broadly when you expect them to give a return and when and what the costs are?

Stephen Binnie: Okay. I think on the first one, just to clarify your question, obviously, energy costs in Europe have been rising, and there has been increased costs. And the way that these rebates work is that you incur the cost -- higher costs across the year. And then at the end of the year, you get rebates based on your usage. So it's an offset of the higher costs that you have during the course of the year. Yes, you're right. Typically, the rebates occur in Q1, but not always. And it's difficult to give a -- to pinpoint exactly when we get them. Typically, they're somewhere between EUR 20 million and EUR 30 million. And by the way, it's not unique to Sappi, it is over -- it's all the industry players in Europe. Typically, they are between EUR 20 million to EUR 30 million. We don't know the exact numbers as we sit here today for what we've done this year. We have a rough idea, but we don't know the exact. In terms of our guidance, yes, that would be incorporated into our guidance.

James Twyman: Okay. So, you would have included that the number -- somewhere in that range of number in your Q1 guidance.

Stephen Binnie: Indeed. But ____ 26:25 to stress, it is an operational -- it's an offset of an operational cost, I think, is the important point. And then your second question?

James Twyman: Yes. Sorry, yes. My second question was just in terms of these 5 measures, your big measures you're doing in Europe. … When should we start expecting that return? And when do you expect the costs to -- that EUR 40 million of cost to be incurred?

Stephen Binnie: Yes. I'll let Marco go into more detail. Just from our side, obviously, you have to be sensitive about the discussions with labor and following a process, which we've been going through. And maybe the other point before I hand to Marco, EUR 60 million benefits, EUR 40 million costs. Those are the headline numbers, but obviously, that's phased. And Marco, maybe you want to go into more detail.

Marco Eikelenboom: Yes. Yes, James, this is very much a staged approach. We've highlighted the 5 units basically where most of the work will be done. We finalized the consultation process in Alfeld, Ehingen, Kirkniemi in the last couple of weeks, which means that we now can implement the social plans for the FTE reductions there. I would say most of that benefit we will see as of quarter 2 -- fiscal quarter 2 and the costs because some of the work on the -- particularly on the central organization have been done already in September, October. So the costs will be kind of divided over – over the quarter, quarter 1 and quarter 2. But the effects will mainly be as of quarter 2 next year.

James Twyman: If I could sneak another one in. There have been substantial tariffs on importers into the U.S., from Asia and from Europe, which I think is around 15% at least. What has been the impact on domestic prices for paperboard and for coated fine paper? Obviously, the paperboard impact has been offset by other factors. But what have you been able to achieve in terms of price as a result of that?

Marco Eikelenboom: Are you talking about European prices?

James Twyman: No, U.S. prices in terms of the impact of the increased ____ 29:09 importers into the U.S. and...

Stephen Binnie: Yes, that's a tricky question because you have your indirect impacts, and it creates opportunities for us. I'm not sure you can say that selling prices have gone up just because of tariffs. But Mike, I don't know if you want to elaborate further on the impact of tariffs on the European competitors on North American domestic prices.

Michael Haws: 29:49 I guess my view on that, Steve, is that -- it hasn't had a direct impact on North American prices. There have been announcements from importers of increases and how much they're realizing, it would only be speculation on my part. And that has also allowed some of the markets to improve and orders to move from imported to domestic.

Stephen Binnie: I think that's the important point, James, is that it's not so much for our domestic supply, it's not so much that it's been enabling us to increase selling prices. But what it is doing is creating opportunities for us to secure more volume.

James Twyman: Okay. Well, maybe as an example, obviously, you're a big exporter to the U.S. from Europe. What have you found? Have you been able to raise prices? Or have you …

Michael Haws: James, we're not a big exporter on boards. I think you were specifically talking boards, or was it -- was it graphic paper as well?

James Twyman: Graphics as well, to be honest, sorry, yes.

Michael Haws: Yes. So board we're not -- it's not material. Marco, would you -- would you want to talk on the graphics side?

Marco Eikelenboom: Yes. On the graphics side, James, of course, we have tried to offset some of the increased cost due to the tariffs and to pass that on to our customer base, which, with the domestic competition in the U.S., is not easy. I would say that this has cost us volume, but we've been successful to around 50% of our -- of our incurred costs due to the tariffs. But it's not so much the pricing that we could get up. It's more the volumes that we -- that we started to lose because of this attempt that we did to pass on the tariffs.

Operator: Our next question comes from the line of Sean Ungerer of Chronux Research.

Sean Ungerer: Just the first question around the European cost savings. Just to be clear, as what’s been said on the call so far, sort of -- sort of run rate to sort of see these cost savings come through is only going to really filter through to the second half of the year. Is that the correct way to interpret that?

Stephen Binnie: No. I think from -- you'll start to see it in Q2, so if I was to -- Marco touched on it, but you'll probably -- there'll be a little bit --there'll be some in Q2, more in Q3, Q4, and the final little chunk will be in Q1 of 2027 because a lot of these things that we -- these initiatives are happening now, as we speak, right? So you still have some of the costs in this quarter. But for the next 4 quarters beyond that you’ll -- the savings will progressively get larger.

Sean Ungerer: Okay. Got it. And then just on the net debt target of below $1 billion, what is the sort of definition of medium term? Because if you look at the slide of the presentation, I think it sort of flags resuming dividends and growth, and considering share buybacks from 2028 when the target is reached. Am I interpreting that correctly? Or how should we think about that?

Stephen Binnie: Yes. Look, it's hard to be definitive because clearly, it's going to be dependent on market conditions. We've obviously got a strong commitment to reducing CapEx over the next 3 years. I think that – I do think market conditions are going to improve, and profitability will pick up. Everybody can do their math. It's all going to depend on the level of profitability. If we can get back to normalized levels, we'll get there quickly. But I think it's going to -- it's going to be gradual. I mean, clearly, in 2026, market conditions are still relatively challenging. I do think we will get the ramp-up of Somerset. We will have better DP prices. Our CapEx is going to be $290 million. So I think there will be some strong cash generation this year. And then when you get to '27 and '28, I think there'll be further -- further cash generation. Listen, if it takes longer, obviously, we'll stay committed. We are laser-focused on getting this debt level down, and however long it takes, what's our best estimate? 3 or 4 years.

Sean Ungerer: And then just to follow on another question around the packaging especially the pricing in North America. So if we sort of exclude the ramp-up of PM2, what is the core sort of board business pricing mix done sort of year-on-year at least? I mean, sort of listening to a couple of other competitors in the U.S., it seems like pricing was down about at least 3% to 4% year-on-year.

Stephen Binnie: Yes, that’s right. Obviously, it depends on the mix and the different grades and all that kind of stuff. But if you look on average and some of the key product categories, you're talking $100 to $150 type decrease. Mike, I don't know if there's anything you want to add.

Michael Haws: No, Steve, thank you.

Sean Ungerer: That's great, and then, Steve, I appreciate the…

Stephen Binnie: Mike, anything you want more?

Sean Ungerer: No. No, we got it. Okay great. And then, Steve, I appreciate the guidance on the planned maintenance in Q1, and there's obviously a nice schedule for maintenance for the full year by quarter. Just trying to compare like-for-like compared to 2025, if we sort of strip out the [indiscernible] cost of ramp-up. I mean, what is your best estimate? Is planned maintenance going to be sort of roughly flat year-on-year or lower or higher…? We've obviously got a number for Q1.

Stephen Binnie: If you -- yes, look, if you back out the whole Somerset thing, I mean, last year, you had -- in the U.S., you had Cloquet and this year, you've got Somerset. In South Africa, you've got Ngodwana, which you did have last year, oh there is, yes -- yes, it's on Page 28 -- yes, Page 28. So you've got different quarters, but you've got Ngodwana in both years. Perhaps a little bit higher would be -- and I'm looking at Graeme here. Cycle is a little bit higher because we've got that a little bit of a longer shut to fix the one piece of equipment that we need to spend time on, but it's not that material. Graeme? p id="60862666" name="Graeme Wild" type="E" /> No. I think more importantly, we're doing a full mill shut in that one just to do a full clean of systems that don't regularly get cleaned. So it is slightly longer, but not best material.

Stephen Binnie: Yes so I think the conclusion out of all that, Sean, is that broadly -- I mean, obviously, Somerset -- taking out Somerset project last year, broadly, it's about the same as last year, maybe yes.

Sean Ungerer: Okay. So call it like $70 million odd.

Stephen Binnie: Yes.

Sean Ungerer: Okay. Cool. And then, Steve, just going to North America in terms of coated freesheet. I mean, there's a couple of your competitors asked price increases for Q4. I'm assuming that will sort of benefit your business as well. Is there any sort of update there or traction or not -- no traction?

Stephen Binnie: I'll let Mike go into more detail. Obviously, us taking out the machine has brought the market -- domestic market back into balance. And it does create opportunities on Somerset PM1. And I think we talked about that in our results announcement. So we'll obviously -- if there are opportunities to add value and make some graphics on PM1, we'll take advantage of that. But Mike, specifically to recent pricing moves in that.

Michael Haws: I guess -- I guess the way I'd phrase that up, Steve, is the market is still overcapacity with the current coated freesheet assets in North America. And on the [web side], not as much traction as on the sheet side. The sheets are dominated by imports, which have had the tariff impact. And I'd kind of frame it up in that way. We are carouseling some graphic grades to PM1 as we're ramping up the volumes on -- at the Somerset mill.

Stephen Binnie: So overall, there are certain grades where we've been able to get it, but others more challenging. But having said that, it's obviously a much tighter market conditions than Europe.

Sean Ungerer: And then just last one for myself. I mean, what do you think is going to be the biggest catalyst in the short term to sort of see a rise in DP prices?

Stephen Binnie: The biggest risk.

Sean Ungerer: Catalyst.

Stephen Binnie: Catalyst. Look, I do -- and again, I'll let Mohamed expand further. I think that it's clear that there's still a high correlation between paper pulp prices and DP prices. Obviously, paper pulp prices have gone up a little bit – little bit in recent months. And I know there's another price increase out there. I think that will help. And then obviously, secondly, as the kind of macroeconomic situation improves and the consumer environment gets better and the trade tensions that have been out there as they get resolved, I think all of that will help as well. So we think it's going to get progressively better. Mohamed, I don't know if there's anything you want to add there.

Mohamed Mansoor: Yes, Steve, the only other thing I would just add is that the fiber prices also has a big impact on the DP price. And viscose staple fiber prices have stayed and operated in a fairly narrow band for a long time, but the operating rates have moved higher. The inventory levels have moved lower. And at some point, that's got to start showing up in the fiber prices moving up. And as soon as that happens, that is -- that could be a very important trigger to lift the DP price.

Operator: [Operator Instructions] Our next question comes from the line of Lars Kjellberg from Stifel.

Lars Kjellberg: I just want to come back to Somerset a bit. Steve, you talked about your great confidence in ramping up this machine over the next 12 -- 15 months or so. At the same time, most would say it's about 0.5 million tonnes of excess supply in the U.S. market and volumes are flat to down a couple of percent. So how will this be done? What is behind that confidence? What are your prime way to ramp your machine?

Stephen Binnie: Yes. Look, I think it's a progressive process. We've been in discussions with customers for the last couple of years. And we know that we've got the best machines in the industry in the U.S. And we know that we are targeting the independent converters. So, it's going to be a progressive process. Some of our -- interestingly, and I'll let Mike expand further here. We've seen some reasonably good growth numbers in the last couple of months in terms of volumes coming out of the SBS markets. So it's a combination of -- in terms of the longer-term discussions that we've had, the -- our ability to service those independents and building on the relationships that we have. Clearly, and I said that on an earlier comment, there's going to be a price volume trade-off. And we've got to -- we've got to carefully manage that and optimize profitability as we go through that process. But Mike, do you want to talk further there?

Michael Haws: I think if you -- if you just think about the market and the scale of the 2 assets that we now have as independent suppliers, it is absolutely the best largest scale machines in the SBS market. So we've got new equipment, highly technical. We've got a product match with our PM1 that was extremely well accepted in the field. And we're obviously a domestic supply. So we've seen opportunities as a result of some desire to switch to domestic from imports. And as the independent suppliers are looking to grow their business, they're clearly looking to grow with companies that are convicted around this business, which is clearly Sappi with the investments that we've made and not just the mill, but with our sales force, and our technology group with R&D. So we've had many business with customers. And I think it's a relationship piece that we're going to continue to build. And we feel as though things are progressing well. Is it a seller's market? It's clearly not. But we're making great progress and the product off the machine and the asset is running very, very well.

Stephen Binnie: Lars, just -- and one other point to make is that remember, we have PM1 at Somerset. And we can -- and with margins healthy on the graphics side, we can leverage off that flexibility on PM1 as well on top of all the good stuff that's happening on PM2.

Lars Kjellberg: Yes. Could you remind us also the yield benefit you would have relative to a standard U.S. SBS sheet and how you would compare with import FBB?

Michael Haws: Probably we have about a 5% yield advantage up from SBS, which is a little bit less than FBB, but we also have a couple of fighter grades that we developed that are similar to FBB.

Lars Kjellberg: Final question for me is, again, we're talking -- coming back to Europe, right, where there's -- as you pointed out, significant excess supply and it feels as if some volumes turning back that used to be exported from Europe. So are you seeing any incremental pressure from repatriation of overseas tonnes into the European market that makes that particular market when it comes to coated paper more challenging than it already is?

Michael Haws: Look, that's one of the dynamics, isn't it, Lars? Yes, part of it, it is already there, and it's a continuing pressure point. Obviously, you have the indirect impact on tariffs, right, from the U.S., right? Other players can't get into the U.S., where do they look to sell their product in Europe. So it just compounds the challenges of Europe and adds to that excess capacity, and that's why it's very important that we're proactive taking -- matching our capacity to our demand and taking costs out of the business. So it just compounds the challenges we faced.

Operator: There are no further questions. I will now hand back to Steve Binney. Please continue.

Stephen Binnie: No, thank you. I just want to take the opportunity of thanking everybody for joining us today and look forward to discussing our results at the end of Q1. Thank you very much.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.