The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Justin Joseph Jordan - Exane BNP Paribas, Research Division - Analyst
: I've just got 2 quick questions. Firstly, on Communication Paper, and I guess this is really for Jussi. I remember well, back in 2009, you took some
very decisive action clearly then to rationalize capacity. Clearly, I know you've already closed the Chapelle newsprint mill. I guess I'm not asking
you to comment on specific mills, that would be unfair. But I'm assuming you are reviewing the situation regarding actions that may be required
over the next 6 to 12 months for Communication Paper capacity for UPM?
Question: Justin Joseph Jordan - Exane BNP Paribas, Research Division - Analyst
: I've just got a quick follow-up for Tapio here really on the Capex. Clearly, you're now guiding to EUR 200 million less CapEx in calendar 2020. And
I just want to clarify, that's the EUR 100 million reduction in the Uruguay or experience related Capex. I assume that's just a timing issue that
presumably will be just increased in 2021 or 2022. And then really, the other EUR 100 million that's reduced UPM maintenance Capex, shall we say?
Or how would you describe that, Tapio?
Question: Alexander Berglund - BofA Merrill Lynch, Research Division - Analyst
: I think most of my questions have been answered, but I've got 2 ones. The first 1 is a bit more of a detailed modeling question. So I apologize for
that. But I believe you renegotiated a pulp contract with BillerudKorsnas. And as a consequence, you will be compensated EUR 15 million in 2020.
I was wondering if that figure is in your Q2 numbers or if that's yet to come?
So I'll stop there and then let you answer that question first, and then I have another one.
Question: Alexander Berglund - BofA Merrill Lynch, Research Division - Analyst
: And will that be -- that would not be an underlying number, it would be an adjusted number?
Question: Alexander Berglund - BofA Merrill Lynch, Research Division - Analyst
: It's a one-off.
Question: Alexander Berglund - BofA Merrill Lynch, Research Division - Analyst
: So moving on to my second question. So a bit more of a higher-level question and it might be a hard one to answer. But do you think or consider
any potential change in the behavior of customers as a function of this lockdown, not specifically relating to graphic paper consumption? Is there
any conversations that you are having with your customers, for example, of a risk that this move from printed paper to digital might be accelerated
because we get used to working from home or learning from home in school, et cetera? Yes, if you have any thoughts on that?
Question: Linus Larsson - SEB, Research Division - Analyst
: On biorefinery, biorefining, you had a strong performance in the second quarter. Shipment to capacity, I think, is in excess of 100%. And you write
somewhere in the report that the results leave room for improvement. I wonder if that is only referring to external factors and maybe pricing in
particular or is there still -- do you still see upside in terms of production on the current production footprint that you have or something else?
Question: Linus Larsson - SEB, Research Division - Analyst
: Great. And on the full year, what's your expected group net pulp position?
Question: Linus Larsson - SEB, Research Division - Analyst
: Sure, sure. And then just 1 final follow-up question on Capex. I mean you reduced your 2020 CapEx guidance by EUR 200 million. Do I read it right?
I guess this is a timing question, but do I read it right that 2021 will have higher CapEx than 2020 and if so, by how much, roughly?
Question: Markku JSrvinen - Handelsbanken Capital Markets AB, Research Division - Analyst
: I had a few more questions about pulp. I was wondering if you could comment on your view about the pulp market now in the second half. For
the first half, we saw a solid demand from tissue. Now you're saying that you see graphic paper gradually moving back towards normal and a lot
of maintenance has been in addition to you, other people have also rescheduled the maintenance to H2. How does the balance look to you now
that we're going to H2?
Question: Markku JSrvinen - Handelsbanken Capital Markets AB, Research Division - Analyst
: And while you don't produce in Brazil yourself, you sit quite close in Uruguay. Do you see any impact on the industry from the COVID-19 situation
in Brazil?
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Question: Markku JSrvinen - Handelsbanken Capital Markets AB, Research Division - Analyst
: And then on sort of the longer-term view, I mean, you sell a lot of pure pulp to China. There have been several recent announcements of quite
large integrated pulp and board mills in China with the integrated chemical pulp lines, which is perhaps a bit new. Do you see some sort of shift
in this dynamic? And what's driving that? Does that have an impact on your pulp business going forward?
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