Ladies and gentlemen, welcome to The Navigator Company conference call and webcast for the fourth quarter and 2023 full year results. Joining us today are the following directors: António Redondo, [indiscernible].

As usual, we will start with a brief presentation, and we will have a Q&A session at the end. The presentation can be accessed through the links available on the website, and questions may be addressed also through the webcast platform.

And Don, you will start with a comment on the main highlights of the year. I will now hand over to Antonio.

Good afternoon, and thank you for joining us today. We are happy to be here once again and share with you our 2023 results.

As we will see in today's presentation, the resilience of Navigator's business model and our strong financial position enabled us to present the second best result in the company history even under very adverse market conditions. I will start with Slide 4 for a global overview of the year.

Navigator reached an EBITDA of EUR502 million. What we believe are the strong results achieved in the year with a very volatile market condition.

It should be recalled that the first half of the year was marked by the charters drop ever in pulp prices in such a short period of time, down from record high levels in 2022 with a downturn in demand, especially in Europe. Over the course of the first half, we also saw a slow and severe destocking of paper and packaging, which had accumulated along the distribution chain over the course of 2022.

In the tissue business, with a shorter supply chain and sold less tendency to acclimate stocks. Performance remained considerably stronger benefiting also from the increased market share and positive synergies brought by the integration of the new tissue mill in Zaragoza.

In this context, adjusting production to demand, fixed and variable cost management, commercial performance and actively adjusting the business mix were decisive in protecting margins and results. To highlight also this year, we resolved a strong value-added CapEx of EUR197 million, of which 57% ESG-related aiming at both decarbonization targets efficiency gains and business diversification.

While keeping a strong financial position with a net debt-to-EBITDA ratio below even with the outflows of the tissue acquisition, the payment of EUR200 million in dividends and the tax outflows owing to 2022 results. In the next slide, Slide 5, we can clearly see the resilience of Navigator business model.

Business diversification mainly through tissue, operational flexibility between pulp and paper market mix adaptation, production adjustment and an efficient commercial strategy made it possible to offset the international paper and packaging demand drop and transaction in pulp minimum with paper sales up 26% and tissue sales at 49%, offsetting the 32% drop in paper sales. Now turning to Slide 6 with the main financial highlights.

Turnover in 2023 stood at EUR1,953 million, the second best result in the company history, 11% up on average over for the past 5 years. The all-time record of EUR2,465 million having been set in 2022.

Annual net income reached EUR275 million, 29% higher than the average for the past 5 years. If you turn please to Slide 7, we have an overview of the quarter evolution.

The management of our business mix allows stable quarter results. In the fourth quarter, turnover stood at EUR492 million, up 2% quarter-on-quarter.

EBITDA reached EUR125 million, up 1% quarter-on-quarter. Paper and Packaging sales up 17% quarter-on-quarter, and pulp sales down 41% in the third quarter, mainly due to planned maintenance outages and of course, integration into paper issue.

My colleagues will give you more detail on the different business performance. Fernando will start with the analysis on the EBITDA evolution.

Fernando, please go ahead.

Thank you, Antonio. Turning to Slide 8.

We can take a closer look at the main impacts on EBITDA on a year-on-year comparison. Despite the annual trend on the pulp and coated with the market prices and cott has been significantly more resilient than pulp, while tissue price performed better up by 4% year-on-year.

The cash cost also comparing well year-on-year with an average reduction of around 5% in pulp and paper business. 15 to 20 drop comparing H2 versus H2 '23 versus H2 2022, where it was the peak.

The total fixed costs dropped by 5% in 2023 despite the inclusion of the tissue and higher unit in the second quarter. Considerable efforts have been made to contain costs with maintenance and to costs rising by less than 1%, well below inflation and global wage increase in particular Navigator where the average rate at implemented in 2023 was 5.3%.

In this context, the achieved an EBITDA of EUR502 million. Turning to Slide 9.

We have quarterly EBITDA [indiscernible] versus last year. Compared with the same quarter last year, [indiscernible] market price is evident particularly in pulp with a 40% drop in average plants and [indiscernible] and cote fee and tissue price more resilient.

It's also evident a significant cash cost positive evolution with a sharp drop in cost in all pulp and paper segments, a decrease between 15% to 20%. [Indiscernible] and Santos will now comment on paper and tissue.

On Slide 11, we have a price position. After first half of Q3 marked by a sharp fall in prices from historical highs are even role at Fix reached in Europe, $1,380 per tonne in 2022 and $866,000 per tonne in China in '22 as well.

Prices started to drop since then. The second half of '23 saw a recovery in prices in China and Europe.

Peaks in China reached the bottom in May, $475 per tonne and in '23 at $653 per tonne. In Europe, the minimum was reached in August at $800 per ton and recovered until December, starting -- standing at $1,008 per tonne in December.

The benchmark index for office paper in Europe averaged $1,206 in 23, a drop of only 0.8% year-on-year. Although the benchmark index closed the year at $1,092, down by 18% from the start of the year.

Paper prices in Europe stabilized in the second half of '23. And to date, at historical high levels, also due to a historically high cost base.

On Slide 12, we have an update on the pulp market. As I've just mentioned, the first half of '23, we missed a significant very weak price reduction in pulp, down from the all-time highs of '22.

This was driven mainly by first, the downturn in global demand, particularly Europe; second, the rising stocks along the supply chain in later '22 and early '23, third, the easing of the logistical constraints experienced during '22. And finally, the new capacity in Latin America for short-fibre in Chile, 9.6 million tonnes were added which started up in March '23 and in Uruguay, 2.1 million tonnes that started up in May '23.

The first 6 months of the year ended with residual growth in demand for hardware leveraged by China, which grew 21%, but offset in Europe, which reduced demand by 21% due to weak demand for end users. In the second half, Chinese demand for hardwood continue to perform well.

In fact, it even increases leading year-on-year growth of 35% in hardwood and 33% in the caliper’s hardwood in the second half versus the first half of only 21% for hardwood and 14% for caliper. As a result, global demand for hardwood at base with a positive trend in the second half, ending with 88% hardwood increasing by 8% in hardwood and by 6.5% in eucalyptus pulp in '23.

Stocks at manufacturers and ports were also high in the first half then reduced normalized levels in the second half, and we were below average of the last 5 years by the end of the year. Comparing second half levels with the one in the first half stock fell 7% at manufacturers and 6% at ports, with stock ports dropping by 11% in China and 35% in Europe.

Our sales, our pulp sales reached 460,000 tons an increase of 80% year-on-year. Navigator’s operational flexibility and product quality enabled us to produce more pulp and to place this additional output in geographical regions, where demand was more robust in '23.

Antonio will now give some market context on the paper side.

If we please move on to Slide 13, we have summarized the main developments of pulp and papers. In a global context of sharply following current demand for printing and writing papers, which declined by 11% year-on-year.

And [indiscernible] remains the most resilient product in view of its versatile uses with a reduction of 60%. It compares with coated papers with a drop of and the demand for paper produced from mechanical pulp, which dropped by 18% year-on-year.

In Europe, in particular, apparent demand for uncoated papers was down by 20%. And although it remained also the most resilient panels in but in the Cathie segment in principle, more vulnerable to the trend or digitalization presenting better performance than the others.

In fact, capsid outperformed portfolio by 7 percentage point and real by 4 percentage points. It should also be noted that in Europe between 13 and 23 in 10 years.

Apparent demand for uncoated papers held by an average of 4.7% in year, a clearly better trend than any of the other segments in the printing and writing paper channel. U.S.

demand declined more slowly than in Europe in '23, down by 14%. And apparent and content reconsumption in other world regions dropped by 2%, with China representing growth of 6% in copper consumption in when compared to year-to-date over 2022.

As Antonio mentioned, ‘23 is marked by a slower-than-expected destocking and restocking -- but by the end of the third quarter, we already saw an improvement, which has continued consistently in the last quarter today. In this context, Navigator was able to maintain its high market share improving by 1.5%.

Navigator succeeded in maintaining focus on the one new brands, representing 80% of volumes which is a record high revenue of a navigator and premium products overall represented 57% of our volumes that compares to historical average of 53%. The operating rates in the industry have fallen sharply in print.

Navigator has also adjusted the pace of production, although it maintained an average operation rate of 78% which compares with 71% of our competitors in Europe. As already mentioned by Nuno, the paper industry, mainly by holding paper price, working on cash costs, also in due better in the cycle, managing to protect margins.

To be noted that the price increase announced for December is now fully implemented with cap size and wheels up by around 5% and volume sheets, up by 6%. And also, we have just announced last Friday to our customers new increases for the end of Q1 onwards in Europe and overseas markets.

Looking at '23, the paper total turnover continues still at a historical high level looking back to the industry. Moving now to Slide 14, please, we have summarized the main developments in packaging.

In the packaging business, ‘23 was also marked by a significant overstocking throughout the supply chain. Additionally, consumption of Navigator in segment fell by 40% after the introduction of inventory in-store charges for consumers.

Nonetheless, the packaging business continues to progress with the growing customer base with more than 230 active customers in 30 countries since starting up in 2021 and recognition of the quality of our products based on globulus fibre and consequently, on our gKRAFT brand. Navigator has based its offering of packaging papers on gKRAFT micro segments.

The segment of BAG, segment of FLEX and BOX, which is subdivided into 12 segments for different applications. Marietta work over the course of '23 on development of developing new product ranges aimed at the full industry and also at a variety of consumer products.

These are currently still being tested with customers and launched on the market in a large-scale operation aimed at the new customers supported by the conduction of more than 220 market trials in 2023. Developments included the creation of new product ranges most significantly for innovative 100% local listed base product with a total of 31 new grades of packaging.

As part of the diversification of packaging business, the project for integrated production of [indiscernible] based molded pot products designed to substitute single-use plastic packaging in the food service and food beverage market continues to progress, and the production is planned to start up in the second half of 2024 under the gKRAFT Bioshield brand. Finally, the new industrial facility will have production capacity for approximately 300 million a year, making it one of the largest in Europe and the first integrated site in the Southern unit moving into a fast-growing, high potential market.

Operations will start with four products for the food sector and the new mill offers production flexibility and scalability in order to exploit the various opportunities opening up for subsidy in plastics. Nuno will now comment on the tissue.

Thank you, Antonio. Looking into tissue performance on Slide 15.

As Antonio mentioned, tissue segment continues to perform well, driven by the integration of tissue with better-than-expected synergies and significant price resilience. Tissue business took a full [indiscernible '23 with the acquisition of a production unit in Zaragoza Spain.

The integration of this new mill is part of Navigator's ambitions, ambitious plan for growth and diversification and has reinforced strategic initiate market. where in just 8 years, it has stabled itself as the second largest player in Iberia.

The total annual production capacity of 165,000 tons in annual converting capacity of 180,000 tonnes in '23, issue sales proved significantly resided, and there was sustained growth in demand for Navigators finished product. Also, in tissue business that focus on innovation, differentiated products has enabled navigator to strengthen its relationship with customers, the sales is more sales, more distinctive products continue to set new records in '23 and were up by 64% year-on-year.

Navigator owned brands represented 24% of total sales, which grew 25% in '23. Fernando will now comment on our financial pace.

On Slide 16, the debt maturity profile. Group step profile continues conservative.

Navigator as well balanced debt in 95% of total debt issued on a fixed rate basis. Enable us to maintain low financial impact in a scenario of sharp revising interest rates.

Also worth notice that the company has a solid balance sheet of close to EUR130 million of liquidity, both a long-term and new credit lines and cash on them. In December, Navigator signed a long-term financial agreement with the European Investment Bank of EUR150 million, which can be drawn in 3 tranches, with maturities of up to 12 years.

This green finance is provided as part of the RE power new plant designed to boost finance for greener energy and to support the European Union's autonomy and ability to compete. As a result, average debt maturity remains appropriate with balanced maturities and 46% of total debt tied to sustainable.

On Slide 17, we have the net debt and financial [indiscernible]. Net debt versus EBITDA ratio stands below one line, even with the impact of the tissue acquisition in the first quarter, EUR200 million of dividend payment in the second quarter in the amount of CapEx expense before.

And the amount in corporate income tax payments versus 2022, reflecting exceptional level of profit in the prior reason, confirming our financial strength, return over capital in employment and in term of equity ratios at 21% above last 5 years' average. Lorival will briefly comment on campaigns.

Thank you, Fernando. If we like to treat the level of value-added CapEx reached EUR187 million, CapEx projects include the new high-efficiency recovery boiler and the new bleaching tower in the Washington branching, which are both underway and we will keep and will help to accelerate the group's decarbonization plan as well as the investment in the wastewater treatment plant in Setubal the new woodring fors and the ash treatment for a [indiscernible].

As already mentioned in the last quarter over the next 2 years, the Getwell continue with a high level of value add in order to anticipate our decarbonization targets improve the environmental performance of our sites and implement our strategy for development effect. Taking advantage of the next generation that is mandatory to be completed by the end of 2025.

We also have invested in projects to improve business digitation and customer service. As for example, the now-finished goods warehouse in depots, the molded pulp plant and the packaging products.

For [indiscernible] investments, there is an incentive rate of around 40%. The Navigator will receive over EUR100 million gain, [indiscernible] million has received in 2023.

To conclude, these investments embrace our an ability commitment, but also our innovation and diversification efforts to increase efficiency, improve and sustain our results. John Lane will give some color on this impact in our sustainability.

Thank you, Dario. Let's please go Slide 18.

Navigator is fully committed with sustainability. In this slide, we will highlight some of our 2023 numbers and initiatives.

My colleagues mentioned through the presentation in a few actions taken this period that demonstrate our continued work in all sustainability dimensions. [indiscernible] just mentioned in the value added CapEx level delivered in 2023, of reached EUR 106 million, which represents 57% was dedicated not only to environmental or social and government business transformation in operation and diversification investments.

One of our ambitious goal is accelerating towards recognization. Our investments have navigated to bring forward by 3 years is inter target for via commission and we expect to achieve by the end of 2026, the goal was initially set for 2029 in its road map for decarbonization of its industrial operations by 2035.

This mill that by 2026, [indiscernible] will be able to achieve a level represent less half of the emissions recorded in 2018. It should, nonetheless, we noted that in 2023 emissions were already 41% down from 2018 levels.

2023 Navigator's initiative included signing up to the United Nations Global Compact and taking part in the business and human rights accelerator program. In signing up to the 10 principles of the United Relations in Global Compact the company is furthering its [indiscernible] for super more responsible business conduct and participation in the business and human rights export program represents an opportunity to step up efforts to [indiscernible] if present, eliminate negative impact along the value chain while enabling it to communicate to the progress it makes and to collaborate with international factors.

We create value in the use. I will now hand over to Antonio.

Let's turn to Slide 19, please, with the wrap up. As you can see, we recorded again what we believe are solid results despite this year's market political.

Through slide Q3, we registered a consistent demand recovery on both paper and packaging and a significant drop on cash costs from the peak in 2022. We continue to proceed with our diversification plan.

Navigator Tissue area is duration has been successful with growing sales and better-than-expected synergy results and recapitulating in packaging with ongoing development projects of new parts of paper applications and proceeding as planned with the molded pulp projects. We continue to demonstrate the consistency of our conservative financial policies while keeping our sustainability and investment committee.

The Board of Directors will propose to the general assembly next slide, the solution of EUR150 million dividend. Let's turn to Slide 21 with a glance of the new business opportunities.

Going forward, our sound financial position allows us to consider opportunities for debottlenecking in our core business, investing in efficiency and innovation but also look for new growth opportunities. With the medium-term perspective, we are looking into renewable energy and efficiency of sets, namely new photovoltaic power capacity, which will bring Navigator the total capacity up to between 46 and 53 megawatts peak, making Navigator the number one player in solar photo voltage rated capacity for in-house consumption in Polska.

We're also looking into the possibility of investing in energy spots above all, to provide regulation reserve system services. There is the possibility of investing in app to 3 batteries of 10 megawatts of 2 hours each in the near future.

In tissue, the tissue business has shown resilience and our current position allows us to seek new opportunities for inorganic growth. In packaging, in the packaging business, where a consolidated presence in the international market is still being built.

We continue to look for growth opportunities to our internal R&D program to scale up the business targeting value-add. -- Along turn June, I'd like to call your attention to our clients and discussions in Bioflo.

In terms of biofuels, new projects are being assessed in the production of second-generation bioethanol using ectoparasraw material and introducing craft bioethanol through the recovery and qualification of byproduct biomethanol already produced at our pulp mills for use as a full or in the chemical industry. In full, investment projects are continuously being assessed for production of methanol and eject flow.

These are 2 distinct projects with different technologies and potential partners. In both cases, an essential component is biogenic CO2, which is a byproduct in our core production process.

In brief, these are processes for synthetizing sustainable hydrocarbons in methanol and iteration from biogenic CO2 and green H2 obtained from water electrodes with renewable -- these sustainable other cartons, neutral and carbon emissions will be in high demand in the coming years for both the shipping and/or the aviation sectors where electrification is hardly an option. In Mozambique, we keep our projects since the MOU signed in 2018, the work with the Mozambican government has continued focusing on Phase 1 export of wood chips.

The board of Maco's conception will be a major step in 1 of the conditions present for development of the past. And finally, on Biomaterials, the new El colitis votes by products from our R&D program are being developed with a wide range of applications such as hygiene and oscar, cosmetics, neutraceutical, food additives and health sector.

I will wrap up with a few words on the outlook on Slide 23. The current geopolitical patients and electoral super cycle increases volatility and reduces visibility.

That said, into Q1 '24, Pulp business is expected to continue to improve as already observed particularly during the second half of growth and this uncertainty is not known in what extent this recovery cycle is sustained through 2024. The new capacity entry per year will have an impact, difficult to forecast and anticipate.

The continued demand growth in the Chinese market and of both new printing writing mills and tissue mills may have a positive impact as well as the decrease in paper consumption in the Western world, both in Europe and the state that will reduce the amount and quality of hyperwise available that might lead to increased demand for virgin fiber in packaging and other grades that traditionally use reacte d fibers. In the Paper segment, 2024 began with solid order goods.

The positive trend in demand is expected for a is Q1. Although the economic slowdown in Europe paper prices could benefit for a more polis market structure with improvement in demand after the reduction of supply that, combined with a strong pressure on costs is so far resulting in a reversal of the fall of paper prices we saw in Europe and then even in salination markets during the most part effect, temporary and definitive reduction capacity has been announced in the paper sector in Europe in 2023 and 2024.

In those 2 years, Europe has lost almost 400,000 tons of annual and co-freproduction capacity. Some manufacturers have announced permanent closures on operations, while others have announced the conversion of capacity the packaging rates.

Highlight that Navigator just announced another price increase for all and core papers by up to 5% a year, effective with all the shipping from March 25 onwards. The company will also increase no paper prices outside Europe for all orders already in March.

The recovery in demand is visible in the global market, and this also contributes, of course, to the passenger. In the tissue segment, the demand is expected to grow by 1.7% in Europe and by over 2% oil.

The group continues to leverage synergies driven by business growth, in particular with the acquisition of Navigator Tissue area, business diversification petition or pressure flexibility between paper and pulp market mix adequacy, actually an adjustment and efficient commercial strategy, combined with rigorous programs to control costs as well as the company's strong financial position have enabled us to deliver consistently strong and stable results in changing market context. We are confident that all these factors will continue to point to the resilience of Navigator's business model.

Thank you.

Thank you, Antonio. This ends our presentation.

We are now open floor for Q&A session.

I have 2, if I may. The first 1 would be on price increases and our till date.

You comment that the December increase has been equally implemented, but the A4 copy index in Europe is staying to reflect this, right? So -- could you help us understand from which actual price levels were increased departing and where the prices currently stand?

Second one would be on profitability expectations for sorry, 2024, considering such price increases and taking maybe fourth quarter as a base case for costs are such profitability levels of around the 25% EBITDA margin, a good proxy for the picture for this year. And final one on capital allocation.

I believe that the announced dividends to short of expectations. And I assume that you want to be conservative in light of the CapEx cycle that you commented.

But even still, your balance sheet looks quite healthy. So the question would be, are you seeing any growth opportunities in the market maybe in tissue to which you'd rather target this month?

I must say that the line was awful. I'm going to repeat the 3 questions just to make sure that we fully understand the -- I understood the first question is about our price increases to date and how do we compare this with the peak evolution?

Yes, that's correct. And maybe some guidance on where actually price is done.

Okay? Your second question, I think, is about profitability in 2024 and you would love to give us -- you lose us to give you a guidance of EBITDA margin around 25%.

And that's right. Yes.

And that could be a proxy considering the exit levels from 2023.

And your last question is about capital allocation. And if we see further -- this actually was the 1 that was most difficult to understand, but I think it's about capital allocation and if we see further opportunities to grow in tissue.

That's correct. Yes.

So basically, considering that the dividend is lower and you're facing a high CapEx cycle. But even still your balance sheet looks healthy.

So maybe are you seeing anywhere -- any opportunities in the market to target these funds that you will not be distributing to shareholders?

Okay. I will give first comments for your 2 questions, and I will ask my colleagues to complement.

I will start with the second one, which is easier to answer. My obvious reasons, we cannot give any guidance about what will be our profitability.

You have seen in the presentation, in the last 6 years from 2018 to 2022, our EBITDA margin was in average 24%, and last year was 26%. We mentioned that we believe we are operating, although we have significant decrease our cash costs from the peak by the end of last year in the region of 15% to 20% in the 3 different segments.

So uncopied packaging, tissue and pulp -- so this decrease of 15% to 20%. We are still operating with very high costs comparing to what we have of COVID.

And of course, we are, at the same time, doing our very best to make sure that we translate that into price increases, but we cannot give you further comments on this. Regarding price increases to date, -- and what I can comment is the following.

We have announced a price increase that was if I'm not mistaken, 4% to 6% in December. We have actually in Europe.

We have actually increased 5% to 6% from -- if we compare our February prices. Our [indiscernible] prices with our November prices, they have increased 5% to 6% -- this is not always translate into picks.

I will pass to Antonio clinicals that will explain you a bit technicality, how we believe peak is constructed and why our price increase does not fully translate into peak. Let's not forget that we only have 24% of market share in Europe, so we don't make the pick ourselves along.

Those to comment on back. Basically, we will speak -- the second 1 requisition PV or index and it's non-weighted index by market share.

So 1 data point is 1 data point and was the same on the index. So that's one thing.

That's the second typically, these indexes, they remove the up 10% range and the bottom 10% range, so that they exclude all lines. And the first comment is very typically depending on the timing, but there is typically a lag between price moves and the index as well.

But this is as far as we can comment about the index, which is not calculated our audience on us. So just to recap, the actual prices that Antonio already mentioned that as we actually done in the European market, comparing the announcement with current prices, transactional prices compared to November in February it's 5% on cap size and on and on the for ships that we have announced late March and another way of prices.

Thank you, quickly on capital allocation and remembering what we have shown on Slide 21. So definitely, tissue is an area where we have been signaling in our past calls that we want to keep on growing.

I think we have also mentioned that we are continuously looking to opportunities I think we have, of course, been encouraged as well by the successful integration of [indiscernible] into our present tissue business. So the most obvious evolution is in the near future to find another target that eventually, we will be able to conclude.

I also mentioned in the past that depending on the type of target, which is a pure converter, convert with the paper capacity, we can look after that to further development of tissue paper tissue production in our -- in one of our notes. -- This, I'll say, is for the most immediate and sizable opportunity that we will have.

On top of this, we have also mentioned that we want to keep on investing in our renewable energy. So we have programs to keep growing our biomass production.

Actually, within the unit generation funds, we will be able to launch a new EU biomass plant -- developing further solar to increase our solar PV capacity and also developing batteries to supply services to the grid. At the same time, we have also mentioned, and we are committed to deliver that in the next few years, we will keep on pushing our existing 2 smallest paper machines to being further developed into packaging, and this will allow us to have a packaging capacity in excess of 200,000 tonnes.

So those, I think, are what we can see in the year in the near future. More long term, as I mentioned before, are biofuels, e-fuels, Mozambique and biomaterials.

I will ask now call with someone who wants to have more on this.

Can you hear me?

Sorry, we are not in a…

Can you hear me now?

A bit better, yes. Thank you.

Perfect -- thank you talk about this. Thank you for taking the questions.

I also have 3, if I may. First of all, will be if you could give us some update regarding the less surprises.

So more or less, I want to understand more or less what are the Bingo flavors today? Are they still falling?

Or have they so like always -- do you think that the levels will point some addition -- then also regarding your capitation -- capacity utilization rate, you were talking that you were working at an 85% in the fourth quarter. what levers more or less are you working right now in the first 2 months of 2024, now a little bit more on how we see are going -- and also, if I may I mentioned on tissue prices that have been falling throughout the year, explain a little bit why this -- why have we seen this trend -- and what should we expect for 2024 in terms of prices for tissue

Okay. Again, for the sake of clarity, I'm going to repeat the question, Jose.

Please let me know if they will fully understand the [indiscernible] by us. Your first question, I think, was about an update on imports of ancotoGoup3.

Yes into right now in the first quarter.

Okay? The second question is about our present capacity utilization rate in Cott.

In the first quarter, capacity ratio Yes.

And your last question is how do we see issue prices developing during 2024 Correct?

Okay.

I'm going to give some comments on those questions, but at least on question 1 and question 3, and I'll ask my colleagues to complement question on and to give you some answers on question 2, and then, of course, passenger. Imports, and I will start with the car.

I also can share the important issue, if you want, patent for [indiscernible] in 2023, we have for the majority of the markets already lot of the European markets already data until end of December in a few markets, we have data until end of November and December, for sure didn't change much trends when we have borne in that until end of November. But imports in 2023 in Europe.

So it was from outside Europe -- into Europe have been around 500,000 tons. This means it's the second lowest year of the last 6 years.

So as we have signaled -- have been signaling all over 2022 in our cost, not seeing import as a whole increasing, and it seems that it has been the second year with the lowest level of imports for the last 6 years. Of course, as we also mentioned, imports from Asia increased, but imports from outside Asia decreased in order to compensate that.

As also we have also mentioned, imports are mainly capsized. About fat -- and let's not forget that cut-size imports from Asia are typically without FSC or PSC certification and without, if you will, ESG credentials that the European customers demand.

Hence, they are positioned in the low end of the capsized spectrum in Europe. Want to add something?

Unidentified Company Representative Yes, oh there was a decline this year, as I mentioned, on total port the single source that increased this formation on management as well. And the last that we have, which is December does not include an effect basically on the Red situation.

So it is 1 can argue that it is possible to have an impact going forward, but there is no rate still be set before the impact from the Red Sea. If you look on the month of December only, you see that there was already a month decline of around 16% compared to the average of -- if you look at 2023 as a whole, we can average of imports on period you see December, which, again, as we sort prices, mostly, it's already a soon.

Brazil, there was a reduction of 25% for million unit at from North America significant reduction as well and from Russia, mostly no existing papers from as you think about as we see

Okay. Very good.

So on the second question of capacity conversion, right, I'd like [indiscernible] to make a comment.

In terms of the operating rate, we remain our assets according to the market needs as we in the previous year. And the week we do and adjust our operating rate part market and to the orders that we have.

Probably we can just add the following. We have been learning in the last 14, 15 months to work with different capacity rates.

We can tell you that we expect to have in Q1 a higher operating rate than we had in Q4 last year and of course, a higher operating rate that we had throughout 2023, and having already some mills working at full capacity, not necessarily through all the quarter, but having seen already working at full capacity. But I think the main point is that our teams have been learning how to operate the mills with some variable operating rate, contrary to what has been our traditional model of operation.

Regarding tissue prices, introductory coloan I'll ask Nuno to complement a couple of comments. -- issue like in Ecoponte, we are operating at higher costs than before.

Again, a decrease [indiscernible], but higher costs than before. In porous II, we have been increasing prices already twice, both in Europe and outside Europe, including the announcement that we have made last Friday to our customers.

So I think we can expect as well that tissue prices will go up. I can share with you the comment from a trader to trade that we have just got a few minutes before starting this call.

And it was mentioning that we have some announcements of pulp a new port increase from now if they are true or not true, but it was comment a couple of minutes ago that there is this rumor in the marketplace. And of course, if this materializes, I think there is no other option than to tissue to increase prices in the very near future.

Yes, Fadi, I don't think I have much what you are saying is on you. Unfortunately, we will not have a critical goal but these tissue work as a competitive environment on one side and indeed also for leading cost or an energy sale mentioned, pulp prices have been going up this year again.

So we do expect that there is a high profitability that issue prices will continue to go up. Regarding the price reduction in 2023, as we mentioned, yes, they have come down, but our margins have not decreased put it this way.

So we have been operating and the comfortable prudent margins in the tissue business and despite our bad price reduction last year. But going forward, as we mentioned, as Antonio stressed, we expect prices to go up, and they have started to go up already, especially in mother reels but also in finished goods.

So most of them were already answer. Nevertheless, regarding capacity utilization, I don't know if you can provide a little bit more color on it because that was big surprise last year, I guess, at least from my side.

So I don't know if you can provide more color on it what kind of capacity reversion should we expect for the current year? That is the first question.

And second question, if you can provide some color in terms of wood prices. I don't know if we should expect lower prices in wood in 2024 versus last year?

Or it will be just a blended less import that will help.

Okay. Thank you, Antonio, for your question.

I don't think we can give much more precise guidance for Q1 capacity than the one we have just given to you. again, and summarizing, we expect to operate in Q1 at a higher operating rate than in Q4 last year, was slightly higher than Q4 last year, not yet all mills at 100%.

That sum already some Peter machines already at 100%. So we are focused on 2 things.

One, you might appreciate that it's not easy to accommodate variable operating rates in a large middle of our size. So we are learning how to operate flexibly with variable operating rate, as Dorval said, sometimes from 1 week to the other.

And again, some mills already operating at 100% capacity. Second, in between price and volume like we this in 2023, we will choose price.

So I think with the present situation of the uncertainty on all our cost base and operating from a higher cost than before in between volume and price, we will choose to protect our margins. Regarding wood, I'll ask Joan to complement a couple of generic comments.

Obviously, we are going to work on the mix trying to use as much as possible Portuguese wood, Iberian wood and the balance being with extra Iberian good. I don't expect in Portugal to increase nor to decrease, I believe would be relatively stable.

Any variations at or downwards will probably most the most dependent on logistics than on wood itself is harder to anticipate price evolution in from outside Iberia. But if I would bet, I will probably bet that move outside Iberia will go more slightly down than up.

But let's not forget that in China, a significant amount of pulp capacity, chemical pulp capacity will start this year. Coating by memory, not far from 2 million tons of chemical pulp capacity.

The large majority, not to say all is going to operate with imported wood. And wood is the scar raw material, as we mentioned, in previous discussions.

So I don't think we can give much more details on this, but on, please be free to add to anything you like.

Antonio you mentioned the big picture, and I subscribe it that we don't expect any major changes in terms of pricing. -- Mainly in extra Iberian wood.

In fact, expect to have less mix more favorable with less extra billion in our pulp mills. That's a movement that we -- that came from a decision that we took last year.

So we are trying to maximize our own wood and our wood from local market in Portugal. And of course, also in the second level of relevance, we expect to have some more wood from Spain, in general, not only from Galicia, but in general, from North and South space.

So -- we are looking at this with some expectation that prices may stabilize in Iberia. And let's wait for what we have in -- mostly in the second quarter in the extra Iberian wood.

The first one is around the restocking cycle of some of the graphic paper distributors, just like some color on where do you see inventory levels for some of those distributors and could they restock and pull some more demand for office paper? And then secondly, going back to not necessarily wood costs, but understanding how the cost curve has shifted for Navigator and the wider industry.

I mean you're an integrated player lower down on the cost curve. You use a lot of Iberian wood.

But if you look at across Europe, you've got the Nordic wood costs that have risen including Central Eastern Europe, the cost curve seems to have steepened. How do you see that cost curve developing from here?

And where is Navigator's position on that cost curve?

Okay. Thank you for your question.

Just to make sure we understood your first question is about restocking size distribution -- distributor, sorry, in ancotand you are specifically cut size, if I understand correctly

Yes.

And your second question is about how we believe the cost curve has shift namely in Europe, and I think you are referring many to pulp.

I'm actually we hope that your fine paper operations.

Okay. I will give some highlight and my colleagues will complement those answers.

Regarding the restocking. I don't think our distributors are fully restocked I think they are at a normal level of stock for what is the present level of SAS in cutsize and coating by memory, the stock level tends to be somewhere in between 3 weeks and then it shot of 4 weeks.

I believe they today are not -- at size, insure it might be more around 50 days. I don't think they are more stock than this.

And of course, they are probably at least some of them and in some countries, this is true -- looks like before U.K. This is true for the south of Europe, namely Greece and Italy and some southern stand part of group from Europe from the former Eastern area of Europe.

-- And eventually from the Benelux. Those countries have been typically importing paper from Asia.

And now with the difficulties in the Babmaes trade and the lengthy travels cap and, of course, to increase costs. I believe that some of these are probably a bit understocked because of the delay in deliveries of cat size from Asia.

-- [indiscernible], do you want to add something?

Also had a couple of information. We have a couple of information more quantity from industry sources, indices.

Again we have qualitative conversations, of course, with customers. And the picture is pretty much what the Antonio mentioned.

So normal situation in some areas more exposed to imports, which are now with a longer lead time to supply and cost as well customers. In some areas, you might have some lower-than-normal stock position.

And this applies both this common applies both geographical so holding and pet size although the import dependence comment is more related to. So we will see some players with lower than normal to bottom?

Regarding your pressure for the cost curve is a bit probably hard to answer. So what is our perception based on the data that we have available.

The real cost increase, which is the dominant cost simple and being the dominant costing pulp is a very important cost impact. The wood increase falling the Barbarian Russian evasion of Ukraine has led the wood costs to significantly increase in Central and Eastern Europe, very significantly more than the cost has increased in Port Spain.

And probably with a big impact on both our boot and software. When we speak about Scandinavia, our educated guess is that they also have a significant impact, probably one country more than the other.

And this impact was larger in do than in software. And Johan, do you want to add something?

No, I think it's -- as you mentioned and I will also stress that right now, it's very difficult to predict what the past all of those companies. And for us, sorry, a little bit difficult to stand if there might be any change in the cost curve.

Right now, it's not a -- that's not a clear vision of all of those contract and then I wouldn't say much more than that.

So more likely than not, based on this limited view, more likely than not, our cost competitiveness gap has increased vis-a-vis the Central European producers.

And then if you just allow me one follow-up. I'm just trying to understand how lower gas or energy prices might impact Navigator and your business?

I imagine that you're probably going to get some benefits in your tissue plants, but then it also probably flattened a bit of the wider industry graphic paper cost curve. So I'm just wondering how kind of lower energy and gas prices might impact Navigator in 2024?

An introduction last on to complement an introduction. Your assumption is right, but let's not forget that even at today's levels of energy and electricity, if you will, and gas the cost base is significantly higher than what it was recovered is, of course, lower than the peak in 2022, but significantly higher both for gas and for electricity than it was before.

Is for gas is 30% above -- so we are still being much affected by the cost of energy.

So I just wanted to remind you that we have -- we do have -- we sell power electricity, as you know, in the Fortis market. And -- but still, we are still a net buyer of energy.

But given our position where we have a lot of energy assets that sell into the market, -- we do have a pretty balanced and robust naturally helps position on energy. So overall, our, let's say, competitive position in energy is good price reduction.

If we are a net buyer at the end of the day, will benefit us. We will see -- we don't know exactly what will happen.

I think you were implicitly alluding to the fact that if energy prices go down, paper prices will also go down. Let's see exactly what will happen.

Some of the industry players have already had taken some hedging positions already. So also pulp is increasing significantly.

So it's actually quite difficult to predict what is going to happen on the paper prices and what -- how will energy price variations will be translated in paper prices. But overall, we feel comfortable [Technical Difficulty]

Europe is not reflecting the increases. Maybe it's because your peers are not pushing for such increases as you are and maybe as we typically see in the pulp segment.

So how do you think that, that should bode in terms of market share and volumes in this year? Could would other peers offer lower prices take away some of your volumes.

Is that the right way of thinking.

I will give an introduction [Technical Difficulty] does not fully translate what is our price increases.

Sure. We cannot comment, of course, on competitive price position.

We do have some data to measure, of course, [indiscernible] it's quite granular. So we see every week order intake and industrial intake.

And we see that we are actually keeping or even increasing slightly on [indiscernible] so in off on that.

Thank you.