Translation: Original published in Finnish on 4/15/2026 at 8:32 am EEST.

On Tuesday, Koskisen published the Q&A from its pre-silent period call, which painted a more cautious picture of the company's business development in the beginning of the year than we had anticipated. While the market situation has largely remained in line with our expectations, technical challenges at the Järvelä sawmill, exceptionally cold weather, and high energy prices have burdened Sawn Timber Industry production volumes as well as the profitability of both units. Conversely, demand for birch plywood has remained high, and the Panel Industry's order books have been stronger than usual at the beginning of the year. We will update our estimates before Koskisen's Q1 result is published on May 15, if necessary.

Market situation has remained challenging and geopolitical uncertainty has increased

According to Koskisen, the subdued trend in the construction sector has continued, and demand for wood products has remained moderate. Market sentiment dampened in March with the outbreak of war in Iran but picked up again at the end of the month. Order books for the Sawn Timber Industry for the seasonally strong Q2 are at roughly the same level as last year. One positive aspect that emerged during the call was the continued strong demand for birch plywood and higher-than-usual order volumes in the early part of the year. This reinforces our previous assessment that the Panel Industry is capable of outperforming the Sawn Timber Industry in a challenging market. However, the Panel Industry's Q1 figures are diluted by the chipboard segment, which continues to suffer from the weak Finnish construction market.

There have been no major changes in product pricing so far this year. In Q1, both sawn timber and birch plywood prices remained at roughly the same level as the previous quarter. The company anticipated moderate sawn timber price increases in Q2 to offset cost inflation, but, in our assessment, the subdued demand situation limits opportunities for price increases. In the Panel Industry, too, sales prices remained relatively stable in Q1. The increase in certain cost items is putting pressure on prices to rise in the Panel Industry as well, but based on the comments, it remained unclear whether the supply-and-demand situation sufficiently supports these increases. Overall, we believe that pricing dynamics in both business areas were generally consistent with our forecasts.

Company also highlighted moderate operational challenges in early part of year

Several factors affected Koskisen's production activities in Q1 that we had not considered in our estimates, according to the call. Production volumes at the Järvelä sawmill decreased temporarily during Q1 due to technical challenges and cold weather. On a positive note, however, the Iisvesi sawmill has achieved production records, and the integration has progressed as planned. Additionally, high energy prices affected the profitability of both businesses early in the year. Thus, our cost estimates for Q1 may be subject to slight upward pressure.

Regarding wood procurement, harvesting at winter sites ended approximately two weeks earlier than anticipated due to the early arrival of spring. Log prices have increased slightly, as is typical in the spring, and the Middle East crisis has driven up fuel costs, which will be reflected in the mill price of raw materials with a delay. However, standing timber log prices decreased in Q1 compared to the previous year, as our forecasts from Q4 predicted.

We believe that broad guidance is still appropriate

Based on the overall call, we interpret Koskisen's year as having started on a somewhat cautious note. In addition, the war in Iran creates significant uncertainty for the outlook for the rest of the year, and the upward fluctuation in market interest rates is negative news to some extent for recovery expectations of demand in the construction sector. In our view, Koskisen's broad guidance for the current year remains realistic. The guidance indicates revenue growth and an adjusted EBITDA margin of 8–12%. However, the risks associated with significant earnings improvement expectations in our estimates and in the consensus estimates (2026e: adj. EBITDA growth > 40%) have become more negative in light of recent news.