Hello, everyone. Welcome to UPM quarter three 2026 Results Webcast. I am Massimo Reynaudo, CEO of UPM. Here with me is Tapio Korpeinen, our CFO. After a strong first half, quarter three turned out to be softer. High energy and fuel cost led and contributed to increased variable cost. Combined with that, persistent global uncertainty pushed customers to be more cautious, and that determined a visible destocking in a number of market segments. On the other hand, a clear highlight for the quarter has been the strong cash flow, supported by improved working capital efficiency. Meanwhile, we continued our transformative projects aimed to shape the new UPM, built around businesses with strong positions in structurally growing markets.
Our quarter three sales totaled about EUR 2.2 billion, EUR 2.202 billion to be precise, or 1% below last year. The comparable EBIT decreased by 8% to EUR 131 million, or 5.9% of sales.
The actions implemented to improve the working capital efficiency resulted in a strong operating cash flow of EUR 420 million in the quarter. As a consequence, the net debt decreased. When we enlarge the view to the first nine months of the year, the comparable EBIT grew by 10% to EUR 601 million, or 8.9% of sales. I will turn now to Tapio for some further analysis on the results.
Thank you, Massimo. Here on the left-hand side, you can see our third quarter EBIT development from last year. There first you can see that over the past year, prices at the group level have increased more than variable costs. Also, you can see that despite low volumes in the third quarter, both deliveries and fixed costs were minor positive earnings drivers in this comparison. Last year, fair value increase in forest assets supported our result, whereas this year, the forest asset values decreased. That explains, in round figures, about EUR 40 million of that difference. On the right-hand side, you can see the same chart, but the third quarter compared to the second quarter sequentially this year. There you can see two significant headwinds. First, variable costs increased significantly, and then also delivery volumes were clearly lower.
Sales prices increased in most businesses, but decreased in Fibres and Energy. At the group level, sales price increases covered only part of the variable cost increase. This was particularly true for Communication Papers. Fixed cost decreased partly for seasonal reasons, but then also partly due to lower maintenance activity. Here you can see that operating cash flow was strong in the third quarter at EUR 420 million. The chart shows the nine months cash flow, and there EBITDA is EUR 119 million higher than last year for the same period of time. Operating cash flow was impacted by payments for last year's restructurings, and also costs related to the transformative projects. Working capital for the first three quarters tied EUR 63 million.
But in the third quarter, we had a significant release from working cash capital in terms of cash, and we aim to release further cash in the fourth quarter. This is what is the typical seasonal pattern, but then also this year includes underlying actions to improve working capital efficiency. As you can see on the right-hand side in the chart, typically then towards the end of the year, we release cash from working capital. Net debt decreased by EUR 320 million in the third quarter compared to the end of the second quarter. Net debt to EBITDA was 2.09x at the end of the quarter. Strengthening cash flow and maintaining a strong balance sheet remain clear priorities for us. Our aim is to get down to below our two times net debt to EBITDA policy target. We have maintained our second half EBIT guidance unchanged.
While there continues to be uncertainty in the operating environment, it is also important to note that there are also positive factors that underpin our performance. Demand continues to be strong in the Decarbonization solutions businesses, and we are seasonally entering a stronger period in the Energy business and in Fibres as well. In Advanced Materials businesses, unit margins are healthy. Destocking is still going on in some of the markets, but in nature is temporary. Finally, following the increase in variable costs, we will continue with actions to manage our margins across our businesses. Nevertheless, due to the realized low volumes and increased variable costs during the third quarter, the upper end of the guidance range at the moment looks less likely.
In the interim report now, we have also outlined the timing of maintenance shutdowns for 2027 already for your modeling purposes, and you will note that there will be no shutdowns next year at the two biggest units, which are now on an 18-month cycle. That means Paso de los Toros pulp mill and Olkiluoto 3 nuclear power plant. So no shutdowns next year in 2027. On the other hand, there will be a turnaround shutdown at the Lappeenranta refinery, and by this we mean a shutdown that is done every four years. Now back to Massimo.
Thank you, Tapio. Let me give you some more detail business area by business area. If we start with Decarbonization solutions, well, markets, Tapio said it before, continued to be strong in the quarter. In Energy specifically, the performance was in line with the low seasonality of quarter three. Meanwhile, the electricity consumption in Finland continues to grow. I am going to be talking a bit more and specifically about Energy and the situation in Finland soon. On the other hand, on biofuels, our refinery Lappeenranta underwent the planned maintenance shutdown during the summer, moderating our quarter three performance. But the demand for renewable fuels was good and the bio premiums are at a healthy level. In UPM Biochemicals, the interest for our products stays strong and the Leuna ramp-up continued.
But here, let me spend a couple of minutes to tell you some more about our operational ramp-up in Leuna. In this slide here, it's a bit busy, but in this slide here, we are providing a visual description of the various processes happening in the refinery. Basically or simplistically, two of the three core processes are producing commercial volumes already. When it comes to the first process specifically, the one you see in the middle, that is where wood is transformed either in lignin or sugars. That process was started up in Q4 of last year in 2025, and it has been ramped up during this year, and commercial deliveries of industrial sugars have reached substantial volumes already. This represents a major milestone as nobody until now has achieved success in this process and definitely in this scale before.
The production of lignin-derived specialty chemicals has also reached stable operations, and we are ramping up sales into attractive growth segments such as batteries and construction materials. This is for the first process. When it comes to the second process you see here on the slide in the bottom part of the slide, we have reached technical readiness to produce Renewable Functional Fillers. The production is ramping up now during this quarter. We will immediately start qualifying the final products at the customers and subsequently start the sales, and these sales will go in areas like tires, mechanical rubber goods, or plastics. Then it comes the third process. It's in this slide, the upper part of the slide. That is the so-called sugars-to-glycols process. This process was expected to start production by the end of this year.
During the commissioning of this last process, we have identified small technological challenges that require some modifications. We expect these modifications to be completed by Q1 2027, and the refinery to start integrated production in Q2 2027. This means approximately six months later than we earlier anticipated. As already discussed, the final process, the conversion. Sorry. This has been covered. We expect the production will reach the nominal capacity as a consequence of this in the early part of 2028, and this is the prerequisite for EBIT positive operations. The EBIT impact for the full year 2027 is expected, therefore, to be broadly on a similar level as it was or as it is in 2026. The commercial interest, on the other hand, in the main products and the sidestream is strong.
The confirmed customer contracts and the sales and customer qualification pipeline exceed multiple times the annual capacity of the refinery. During the project, we are being also able to widen the portfolio of high-value products and materials, opening up additional market opportunities. This includes, for example, lignin-derived specialty chemicals and additional grades in the Renewable Functional Fillers category. We have also continued strengthening our IPR portfolio, which is going to be a critical element for the future. In other terms, the biochemical business case is intact. Let me turn now to Energy. As we have discussed in earlier earning calls, Finland is a very attractive location for data centers. During Q3, several new data center projects have been announced, and this has a significant impact on the electricity market outlook.
We are an active player in this market, and we are having discussions with various counterparties now because we have three things which are in high demand. We have electricity. As the second largest provider in Finland, we have annually about 12 TWh of reliable CO2-free electricity production. We are able and willing to offer long-term PPAs. In addition, we can offer trading and balancing services for large electricity consumers, such as data centers. This is the first point. We have powered land. This is the second thing. This means the reduced time to market to hyperscalers or developers that want to build data centers capacity quickly. We are also the second largest land owner in Finland, with extensive industrial presence and expertise in permitting in the country. Here, we can offer about 1 GW worth of power land in a relatively short period, less than two years.
We have the possibility to add another 3 GW in the next three years. Then comes the third element. We can add the generation. Data centers often want or are required to bring additional energy generation. We can help with this as well. We have a wind, solar, and battery development portfolio in the scale of about 1 GW, ready to build in a relatively short time. In summary, we are well-positioned to take the advantages of the data center development in Finland. Let's turn now to Advanced Materials. In this segment, we have observed a heavy destocking in quarter three, and particularly in Europe. In the Adhesive Materials business, the shipments, to give you a scale, the shipment of label materials in Europe has decreased 20% compared to quarter two, or 5% year-on-year. This is typically a segment where demand grows at GDP level.
So a significant and evident destocking has taken place during the quarter. Now, despite the sharp decline in demand, our business delivered a performance about in line with the same period last year. Our Specialty Materials business has seen similar dynamics. But now, despite the destocking and despite the increasing variable cost, both businesses have kept their market positions and healthy unit margins. This is important because this will ensure that when volumes will normalize, performance will directly benefit from it. But also, and specifically talking about Adhesive Materials, today, we have announced the decision to open up a new factory in India. This investment continues our expansion in the region following the announcement we made in March of the opening of a new terminal in New Delhi. Just for the memory, we have already a terminal operating in Mumbai.
This investment is in line with the strategic objective of the Adhesive Materials area to accelerate growth by expanding in high-margin areas or, like in this case, high-growing regions, such India is. Let's go next to our Fibres business. In Fibres, the performance improved both in quarter two and from quarter four last year. When it comes to Fibres South, while the platform continued to deliver strong profitability and margins, this is despite low prices touched during the quarter. Cost inflation in logistics and chemicals has been mostly offset by continued cost improvements. This all proves the competitiveness of the platform. Fibres North returned to positive EBIT during quarter three after the performance in quarter two was impacted by maintenance activities. In both platforms, our delivery volumes were relatively low during the quarter three.
In the case of Fibres North, we have implemented eight weeks of production curtailment in the Kaukas mill to optimize wood sourcing and to protect the profitability. We will have another five weeks in Pietarsaari in Q4. In Fibres South, our eucalyptus pulp inventories were low, and they required some replenishment ahead of the Paso de los Toros maintenance shutdown, which is ongoing right now. Next, to Communication Papers. Communication Papers has had a really challenging quarter and reported an EBIT loss of EUR 8 million in Q3. The market demand in Europe weakened further compared to the previous quarters and declining 7% year-on-year, so compared to Q3 last year. Energy-related input costs increased sharply during the quarter.
Average paper prices increased as well, but the speed and the scale of the cost increases, combined with the overcapacity in the industry, limited the ability to pass through the full cost increase during the quarter. It has to be considered also that talking about the overcapacity, we estimate it being roughly 30%. Further, and to make the situation more challenging, there have been no meaningful capacity closures in Europe in 2026. Basically, these market realities reaffirm if there was still a need, the need to strengthen the competitiveness. We see the planned joint venture with Sappi Limited as an effective way to achieve this objective, while, on the other hand, ensuring reliable, high-quality supplies to the customers now and in the long term. As we have commented in the previous calls, the transaction is subject to merger control approvals in a number of jurisdictions.
Most jurisdictions have given their approvals already. In early October, the European Commission restated its serious concerns about the joint venture. We believe in the strength of our arguments, and we have been addressing the concerns raised. At the same time, we have opened discussions on potential remedies. The European Commission's final decision is expected by the end of the year or shortly thereafter. Next is still another ongoing strategic portfolio initiative is relative to the UPM Plywood business. Its separation is, in fact, a few days away from completion, and it will result in the establishment of WISA Group as an independent listed company. WISA Group had its first Capital Market Day in September, and there they had the possibility to highlight own strengths.
Just some of them are the fact of being a leader or a leading plywood player in premium categories to have an experienced leadership team, a resilient track record across all business cycles, and the ability to pursue strategic growth opportunities. The trading of WISA Group will start on the Nasdaq Helsinki on November 2nd, and the UPM shareholders will receive one WISA share for each UPM share they own. No action is therefore required by them. Now, and concluding, going into Q4, we remain focused on protecting margins, improving cash flow, and maintaining disciplined capital allocation. We continue to execute our transformation toward a new UPM, focused on a reduced portfolio of businesses with a stronger growth potential and higher value creation opportunities. With this, I conclude, or this concludes the prepared part of our presentation, and we are ready for questions.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Linus Larsson from SEB. Please go ahead.
Hello, everyone, and thanks for taking my question. Starting off with your implicit fourth quarter guidance, you are expecting quite an improvement. So I wonder if you could just elaborate a bit on what kind of visibility you have. You talk about, if I read you right, a volume setback in the third quarter. So what is the visibility on volume improvement across your businesses and also mainly in Communication Papers, your visibility on variable costs there and pricing and also the energy refunds that you have guided for being clearly lower than last year, and maybe also the visibility on fair value of forests at this point?
Okay. Look, I will start with the question. I will let then Tapio to complement it potentially, because this is a wide question which touches a number of different business areas. But basically, going between quarter three to quarter four, there are typically a number of, let us say, elements that differ also historically. One of them, you mentioned it, is this energy refunds about Communication Paper, that they get mature during the whole year, but they come on December, or they are booked only when they come in December. So this is one difference between quarter four and quarter three. Then another element of difference is energy, but it is our Energy business, and that is because it is a business with a seasonality and typically go into quarter four, energy consumption increases during winter months.
Historically, the profitability of that business has been higher in quarter four than it has been in quarter three. Then when it comes to the volume dynamics, actually, the situation is very volatile, and speculating too much is probably not the right thing to do. It is, however, important to acknowledge the fact that, as we said earlier, in quarter three, we have seen a significant destocking. Some way or in a part, this was a reversal of some inventory build-up in quarter two due to the uncertainty that the war in Middle East brought into the number of supply chains. So quarter three has seen a part of an element of destocking or rebalancing after that inventory built in quarter two. Destocking, and Tapio said it before, by nature is of temporary nature.
There may still be some tail going into Q4, also because it is difficult to separate destocking from underlying demand in times of uncertainty, but then demand should be normalizing. Then here I will hand it over to Tapio to complement what I said and if there is anything relevant that I have not covered.
Yes. Maybe Linus, to your list of questions, I think Massimo mentioned the bigger moving parts. Again, we have the energy refunds, like always, booked at the end of the fourth quarter. Scale, in a sense, has been coming down somewhat. One can say it in round figures, around EUR 60 million order of magnitude, kind of addition to the profitability of the underlying business as such for Communication Papers. Then we have these forest valuations like we have indicated earlier, less than what we had last year in the second half of the year. As I mentioned earlier, in the third quarter now, actually, we had a small decrease in FX asset valuations. Again, in round figures, in the third quarter, we will have a current estimate in the scale of EUR 50 million impact from that. Then we do have more maintenance, as has been mentioned.
If we had maybe about EUR 25 million impact or similar level to last year's third quarter in current year's third quarter, then fourth quarter with the Paso de los Toros shutdown and, in a sense, the remaining impact of Olkiluoto 3 can be in the scale of EUR 65 million. So about EUR 40 million more than in the third quarter. That is obviously to the other direction, but on the positive direction, these refunds and the forest valuation. As Massimo said, then you can look at the previous years. We have seasonally higher prices, obviously, when winter comes in the Helsinki price area. So that should boost the result of Energy business seasonally from third quarter. As I was pointing out in discussing the outlook, we do have healthy, resilient unit margins in Advanced Materials businesses. I would say that that also is true for our biofuels business.
Maybe that is some additional color.
Thanks a lot. That is super helpful. Could I just double-check one thing you said, Tapio? Did you say that you will have a EUR 55 million positive impact in the fourth quarter from forest revaluation? Did I get that right?
Yes. That is the, I would say, scale that we would expect at this time.
Perfect. Thanks for clarifying that. Then maybe just finally, on variable costs, you showed them one graph how you saw variable costs escalate by more than EUR 100 million in Q3 compared to Q2. What is your sense now if you bridge Q4, Q3, are variable costs still rising? I can imagine for instance, energy would be rising, but then I do not know if there are offsets in fiber or anything else, or your own actions. So what do you think? What is the delta Q4 and Q3 on variable cost for the group?
Well, I would say without quantifying more that we are seeing, let us say, some stabilization on the kind of market prices for inputs. Well, in a sense, this sort of real energy-driven impacts that are there. So, no respite there, but I would say stabilizing into the current quarter, so impact should be obviously less than what we saw between the second and third quarter.
Excellent. Thanks a lot.
Thank you.
The next question comes from Gabriel Simões from Goldman Sachs. Please go ahead.
Hi. Thank you very much for taking my questions. The first question would be on the Communication Papers side. As you were saying, you usually have the energy refunds in the fourth quarter. You mentioned at an earlier point in the year, and now again in the call that you expect that to be lower at around EUR 60 million this year. But I just wanted to understand how the mechanism work exactly for the refunds. Because what I'm trying to understand mainly is that if we're in a high energy cost environment still, if we could actually see higher than expected refunds in the fourth quarter, if they're related to that specifically. And then my second question is on the Energy division. You usually hedge around 60% of your volumes ahead of time.
I understand and have a little bit more color on how exactly the policy for the hedging works. In the end of the year and beginning of the year, do you usually hedge at a similar amount, even though we usually expect higher prices? How much energy is already hedged for 2027, and when will you start hedging for 2028 as well? Thank you.
I will take maybe the first part of the question, and then I leave the one about energy to Tapio, which has handed over the business at the beginning of October, but I am sure maintain good memories about it. When it comes to Communication Papers, the way refunds work, or basically the refunds we are getting this year are the ones that have been matured last year. Any impact from the situation this year will be visible potentially in 2027. The specific energy situation this year will not have any impact on the scale of the refunds in December.
Tapio, you want to comment about our hedging strategy?
Yes. On hedging, we have not disclosed numbers for any quarter or years separately. What we have said, obviously, is that we do build our hedge position over several years. We do start also when liquidity is there, and obviously depending on the price level, hedging on the third year. We have started to hedge also 2028. We build up the portfolio, let us say, typically, or the position typically over three years. Then we do take a view in how soon we build up that sort of hedge position. We do take a view of the forward prices vis-à-vis our kind of fundamental view looking forward. What obviously tends to impact that is that there has been a fairly common pattern that the liquidity, the demand for the years further out has been less.
There has been a backwardation on the forward prices, and that's usually then leading to, let's say, our building the hedge position later rather than sooner on the further out years.
Thank you. Very clear. If I may just add a follow-up on the Communication Papers side. Given, Massimo, what you mentioned for the impact in 2027, is there any guidance you could give in terms of how much those refunds should increase actually in 2027 versus 2026?
No, I believe that we're not in a position or willing to give a guidance right now. Also, let me recall another aspect here. A part of these refunds are both proportional to the energy price, but also to the production levels in the country where we do receive those subsidies, and so production curtailment or stopping assets play a role as well.
Perfect. Thank you.
Okay. Thank you, Gabriel.
The next question comes from Cole Hathorn from Jefferies. Please go ahead.
Good afternoon. Thanks for taking my question. First of all, Tapio, you have been here ever since I have covered UPM, so I just wanted to thank you for all the calls that you have done in the past. But I would like to focus on the pulp markets for the question, and your thoughts on how you see the pulp market developing into 2027. We are starting to see FX slightly move from a headwind to a tailwind. I am just wondering what you can call out from a demand perspective as well as look into 2027. Anything that you can provide there on the pulp side?
Well, getting into forecasting 2027, I believe we do not have much more, let us say, visibility or intelligence here than anybody else in this call. What we can comment about when it comes now to Q4 at least, is that we have seen a different and improving dynamic compared to Q3. Basically, when it comes to the price dynamic, what we have seen is already in September 1st, I am talking general information, not necessarily talking UPM numbers to be clear, but we have seen a first round of price increases being announced, and I believe mostly implemented in the market. A second round announced in October. It still required time to see the realization on that element. That has been supported by an improved demand, some seasonally improving demand combined with rather low inventories during the summertime.
Going much farther from that and into 2027, I don't think I will be adding valuable information here.
Maybe I'll just ask you on the FX side, is there anything that FX is impacting your business or turning slightly more positive? The reason I ask this is it's moving from a headwind to a tailwind into 2027, and particularly with the Brazilian real, I'm just wondering if there's any competitive dynamics there that maybe mean that the Brazilian players are less likely to push for price, considering they've just got a lower production base with the Brazilian real. Just wondering if the lower Brazilian real is a concern and if improvements in FX will support numbers for 2027. Just your thoughts on the FX side. I know it's a difficult one.
Well, I don't think we are in a position or even willing to build a scenario on a lower real in Brazil on a base of a couple of days of trading there. That I would leave it apart. But when it comes to the broader question around what's the impact that FX has on our business, I'll hand it over to Tapio.
Well, yes, like you say, Cole, it's obviously relevant for the pulp business. Let's say a stronger dollar, generally speaking, is impacting the most the pulp business through the top line. To some extent can impact also the biofuels business because fossil diesel, ultra-low sulfur diesel prices are quoted in USD. Generally speaking, stronger dollar is good for UPM.
Thank you. Then just a follow-up is maybe just technical guidance for the Leuna business. You talk about a similar level of EBIT year on year into 2027, just with the push out in the ramp-up. Is there any kind of rough quantification you give for 2026 so that we just have an idea what we should expect for 2027? I mean, is the kind of roughly -EUR 140 million the right ballpark for Leuna and that kind of stays similar in 2027?
Well, we have shown a -EUR 65 million EBIT for the first half of the year, and if you read the outlook statement carefully, we have there increased costs moderately in a sense in that comparison. So a slightly higher than negative impact than the EUR 65 million for the second half of the year.
Thank you.
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The next question comes from Priya Ribiawala from Barclays. Please go ahead.
Hi, good morning. This is Priya Ribiawala from Barclays on behalf of Pallav Mittal. My question would be on destocking and Q4 demand. You highlighted significant customer destocking, particularly in Adhesive Materials and Specialty Materials, which you expect to be temporary. Are you seeing any signs of normalization in October, or should we expect this destocking to continue into Q4? What gives you the confidence that this is inventory correction rather than an underlying demand weakness?
Okay. Yes. I am probably partly repeating what I said before. We have seen destocking for Specialty Materials and for Adhesive Materials. There may still be some tail during Q4, and then we believe that demand will kind of normalize. Any inventory play effect will be exhausted, then it comes a point of what is the normalized demand, which depends by a number of other factors. Answering your question, this is what we see. I also add here, compared to what I said before, that for both businesses, we believe that not only we have kind of protected our margins during the quarters, but we have also protected our positions, our market shares. By this standpoint, any market recovery, we are well set to capture it and make it visible in our performance.
Okay, thank you.
The next question comes from Cole Hathorn from Jefferies. Please go ahead.
Thanks for taking the follow-up. I'd just like to ask on the Energy business. Massimo, you gave a lot of helpful color on expectations of timing of when you could do data centers. Tapio, you've run the Energy business for a long period of time, and you brought it up a lot to where it is today. I'm just wondering, as you move on from UPM, what do you see as the most exciting opportunities for the Energy division as you hand it across?
Well, thanks, Cole, for a good question. I would say, of course, the kind of fundamental change that we have been talking about for a while, but you can now see happening in very concrete terms and live as we speak, is that there is a fundamental change in electricity consumption in the Nordic countries and also specifically in Finland. We have been basically in an environment where energy consumption has been pretty flat, but now there is a clear trajectory upwards. Also what we know is that when this growth happens, and we can see the construction with our bare eyes happening at the moment, what will become scarce is electricity supply that is not weather dependent. We can add renewables. UPM also has, like Massimo has pointed out, wind and solar capacity ready to build soon, so we can add that.
What is very difficult for anyone to add in the short term is capacity that is not weather dependent. Therefore, thinking about these kind of new consumers who are investing billions here, and obviously are not sort of fair weather consumers of electricity but are here for the long term, we have a lot to offer to them in terms of the portfolio of power consumption that we have, which is, I would say, world-class. Additional new electricity, whether it's through lifetime extension in Olkiluoto 3, so more nuclear or renewables and the sites, we can package basically solutions that nobody else can in Finland.
Tapio, may I just follow up? If you're thinking about that, is it right to reduce your out year hedges if you believe that power prices are going to be higher and you want to be able to offer those PPAs? Is the business going to be less hedged as we move forward from here to look at some of those positives?
Well, I would say that is kind of again, a sort of portfolio question, so to speak, in a sense that the reality is that even if and when these sort of longer-term contracts for electricity then become more a kind of a market standard, so to speak, over time, eventually then the Nordic power market is still also dependent on the weather. So whether we have lots of hydro and wind or then a dry year and a cold winter, then that will still, in this sort of a spot market, obviously affect electricity price.
Therefore then, how to sort of manage that depends in a sense on the kind of portfolio of contracts that you have going forward, whether they are longer-term PPAs or whether they are then sort of shorter kind of tenure or term bilaterals or then perhaps some hedges in the sort of futures contract market as well. So you have to obviously look at it as a totality, so to speak.
Thank you very much for the color.
The next question comes from Tomi Railo from DNB Carnegie. Please go ahead.
Hello, this is Tomi Railo from DNB Carnegie. Just a question on the maintenance you provided some timing and commentary for next year, but just to make sure, do I read it correctly that the costs should be lower next year compared to 2026? Maybe still that, if I understand correctly, the cost for 2026 is maybe roughly EUR 140 million-EUR 150 million.
Well, let's say if I just comment on that, like I said, we would expect the impact for the fourth quarter to be around EUR 65 million, EUR 25 million in the third quarter. That impact includes both the costs and the lost margin. I point that out, therefore, that it's early to talk about the total impact of maintenance next year because obviously then we will comment that more when we have also a better view on what the margin loss might be. Maybe just having said that on the cost basis, of course, the fact that we have two big maintenance shutdowns less next year should mean that we have less maintenance cost overall, even if we have the Lappeenranta turnaround shutdown. Then again, the total impact, we will know more when we have also better visibility on the margins.
Yes. Thank you. Great. Thanks.
The next question comes from Joni Sandvall from Nordea. Please go ahead.
Yeah. Thanks for the presentation. One question related to Adhesive Materials. Following your label material investment into India, are you actually considering any consolidation possibilities within the Adhesive Materials market?
That is not the strategy we are pursuing right now. At this point, what we have done very actively over, I would say the last 18, 24 months, has been acting on our competitiveness, and we have done significant, let's say, internal consolidation, closing some assets, moving production toward a more, let's say, cost-efficient options. Then we have invested a lot on the commercial side. This is one of the thing we have done. The second one has been to reinforce our presence in area with high margin growth opportunities. Like we've invested in a quarter in the U.S., or we have invested in new terminals in Vietnam, in Taiwan, earlier on mentioned India already. Now we are reinforcing our position in India. Call this kind of organic development of the business.
Beside that, as we have also stated publicly, we stay open to consider acquisitions in this space, but only if and when they create value in the sense of, let's say, either opening up to or reinforcing our position in geographies where we are already or enabling additional value creation.
Okay, thanks. That's clear.
Okay. Thank you. Thank you, Joni. Okay. But look, I believe we have received or have taken all the calls in the line. Thank you all for your participation to the call today. Have a nice rest of the day. Thank you.