“The rest of the portfolio is actually stable. It won’t be that throughout the year, as you know - I mean, these things change quickly, so there’s a level of variability here, obviously, and we’re forecasting a spot rate as we always do.”

In context

“Falorni: Hi, good morning everyone. I wanted to ask about the commodity outlook. Andre, you mentioned $300 million in headwind expected in fiscal ’25. Can you maybe talk about the components of the headwind, some of the key commodities including pulp, resins, and also on the transportation side, given the recent rise in ocean freight, any potential impact there? Then in terms of--I know some of the commodities, you cannot hedge, but just the level of visibility given your contracted rates on that headwind, thank you. Andre Schulten: Yes, hey Filippo. The commodity portfolio is actually at the moment relatively stable. Most of that headwind that is in the guidance is pulp at the moment. We continue to see strong demand on some of the grades and limited supply, so that’s driving the run-up. The rest of the portfolio is actually stable. It won’t be that throughout the year, as you know - I mean, these things change quickly, so there’s a level of variability here, obviously, and we’re forecasting a spot rate as we always do. The commodity effect as we think through visibility, look - I mean, the flow through is different by commodity class, but I think we discussed this when we were in the middle of the commodity crisis, it generally takes three months to nine months to flow through the P&L, so I think at the end of quarter one, we probably had relatively good visibility on most of it through H1, and then we’ll go step by step. But again, this is one that we forecast on spot, we don’t hedge, so the flow through again is the key driver of latency in terms of P&L, in terms of P&L effect. Transportation, look - generally energy, oil is relatively stable, so overall transportation is flat. Yes, we see some impact from increased transportation on the sea routes, but it is not material in the context of the year at”