AAK AB (publ.)

For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Today's event will last for 45 minutes. Now I will hand the conference over to the speakers, CEO Johan Westman and CFO Tomas Bergendahl. Please go ahead.

Thank you. Good morning, everyone. Thank you for joining us today. And thank you for your interest in AAK. As you heard with me today is also our CFO, Thomas Bergendahl. So with that, please turn to slide number two. What we will cover today is quarterly highlights, selected events, business and financial update, and followed by some concluding remarks from my end. We're scheduled to do this for about 40 minutes, including a Q&A session at the end. And with that, please turn to page three. Just a reminder, this presentation includes forward-looking statements that come with risks and uncertainties. These are our views on future events and financial performance, but actual results may differ. So please keep that in mind when we go over the material. With that, please turn to page number four, starting with the quarterly highlights for Q3 2025. As you've seen in the Q3 report published earlier this morning, we delivered a solid quarter overall, broadly in line with the previous one, with strong operating profit despite somewhat soft volumes. Operating profit in the third quarter increased by 9%. This excludes the year-over-year impact of the hillside divestment, as well as the CEC 85 million currency headwind. When including the effects of currency translation, operating profit grew by 2% compared to the corresponding period last year. Thomas will go over the main drivers behind the FX impact a bit later in this presentation. Volumes declined slightly, 2% year-on-year, but increased 4% sequentially. Looking at the year-on-year comparison, the volume decline was mainly driven by an 8% reduction in chocolate and confectionery fats. Food ingredients, excluding the hillside divestment, was flat, while technical products and feed decreased by 1%. Just as a reminder, the hillside divestment refers to last year's sale of our North American food service business. That business accounted for roughly 5% of our total volumes and is therefore weighing on the reported year-on-year development, an effect that will continue also in the fourth quarter. Profitability was strong, with an operating profit per kilo reaching CEC 2.47 in the third quarter. This represented an increase of 5% or 12% at fixed exchange rates, both excluding the hillside divestment. This improvement was driven partly by continued internal optimization, including productivity and procurement improvements at our oil refining plants, as well as our Fit2Win cost optimization program, and partly by better portfolio and price management, with continued high sales of speciality solutions. Favorable market conditions for cocoa butter alternatives further supported the third quarter profitability. Turning to cash flow. Operating cash flow was positive at SEC 542 million, driven by strong underlying earnings, partially offset by a negative contribution from working capital. Our net debt to EBITDA stands at 0.61 and return on capital employed reached a solid 21.6%. Both numbers excluding the restructuring cost we recorded in quarter two. All in all, a solid third quarter result with a 2% absolute growth in operating profit despite the significant headwind from currencies. And with that, Please turn to next page. Before we go into the business and financial updates more in detail, let me briefly cover some highlights, few events since our last call. I'd like to start by acknowledging a very sad loss. As previously communicated on September 21, a tragic incident recorded our facility in Louisville, Kentucky, USA, resulting in the loss of one of our dear colleagues. Emergency services responded immediately and the affected part of the plant was shut down as a precaution. Since then, our focus has been to support those impacted, ensuring access to appropriate assistance and honoring the memory of our much valued colleagues. We are cooperating with authorities in ongoing root cause investigation and have engaged both internal and external experts to understand exactly what happened. Safety and care for each other remain our highest priorities and we are committed to learning from this incident and taking all necessary steps to prevent a reoccurrence. Turning to our strategic development. AEK has entered into a joint venture with Kuala Lumpur, Kepong, Berhad or KLK to build a specialty palm fractions plant in Pasir Gudang, Malaysia. The joint venture, which we've named Nura Speciality Oils and Fats or Nura, will strengthen our upstream access to sustainable, high-purity specialty fractions used in, for example, the production of cocoa butter alternatives, one of the key growth drivers within chocolate and confectionery fats. For AK, the total investment amounts to roughly SEK 300 million to be implemented over the next three years. And the plant is expected to ramp up in 2028 and reach full contribution in 2029. By broadening our supply base and reinforcing upstream integration, Neura will complement our longstanding supplier partnerships in the region, increase resilience and support the long-term profitable growth of chocolate and confectionery fats. Moving on to shea sourcing and the development in West Africa. Shea is one of AEK's more important raw materials and a key input in the production of cocoa butter equivalents or alternatives. Each year we source Shea kernels from across West Africa, where hundreds of thousands of women are engaged in the collection process. In recent months, Several countries have introduced export restrictions on raw shea kernels. We are closely monitoring that situation and remain in dialogue with local authorities, industry associations, as well as suppliers. While these restrictions have created a short-term uncertainty in the supply chain, AEK has long invested in the direct sourcing. local partnerships and traceability programs across the Shea Belt. These initiatives strengthen our resilience and help us adapt quickly to regulatory changes. At this stage, the export restrictions are not expected to have a material impact on our ability to serve customers. Our diversified sourcing model combined with long-standing local relationships help us ensure continuity of supply. And finally, as we entered the fourth quarter, AAK reached a milestone, our 20-year anniversary as AAK. 20 years ago, on October 1st, 2005, Aarhus United and Carlsson merged to form Aarhus Carlsson, today known as AAK. The merger combined more than a century of expertise in plant-based oils and fats, laying the foundation for the global leader we are today in high-speciality fat solutions. This anniversary is a meaningful reminder of our strong heritage and the power of combining technical excellence with global reach, with innovation and sustainability focus, strength that continue to define and drive AEK today. And with those events, we turn into the next slide, starting with business area highlights for food ingredients. Overall volume performance in food ingredients was mixed, excluding the impact of the hillside divestments. Volumes were on par with the same period last year. While this represents an improvement compared to the second quarter decline, Performance is still somewhat soft in bakery. All other key segments were stable or slightly growing. Operating profit per kilo came in at SEC 2.40 compared to SEC 2.33 in the third quarter last year, excluding the hillside. That is an increase of 3% despite the currency headwind of SEC 0.18 per kilo. If we look at this at fixed exchange rates and again, excluding Hillside, operating profit per kilo increased by 11%, which is a very, very solid improvement. In total, operating profit excluding Hillside increased by 3% to SEK 766 million, including a negative currency translation effect of SEK 57 million. On a constant currency basis and excluding hillside, operating profit was up 10% year-on-year in food ingredients. With that, moving over to business area highlights for chocolate and confectionery fats. Slide seven. In chocolate and confectionery fats, volumes decreased by 8% year-on-year, following a very strong 12% uptick in the third quarter last year, so also worth keeping that in mind. Compared to the previous quarter, volumes were up 7% sequentially, mainly reflecting normal seasonality in the year. Overall, the challenging market environment and elevated chocolate prices have continued to weigh on consumer demand. At the same time, the sequential improvement, both compared with the previous quarter and within the quarter, may point to somewhat more stable development. Operating profit per kilo remained strong, increasing to 4.3 compared to 3.95 a year ago. Currency translation had a negative impact of CEC 0.23 per kilo. So at fixed exchange rate, operating profit per kilo was up 15% in the quarter. In total, operating profit came in at SEK 525 million in line with the same quarter last year, but at fixed exchange rates, operating profit increased by about 5%. With that, moving into business area highlights for technical products and feed on the next page. Volumes declined by 1% compared to the same period last year, with higher sales in technical products partly offset by lower volumes in feed. Operating profit per kilo increased to SEIK 0.67, up 5% from SEIK 0.64 last year. In total, operating profit reached SEIK 46 million compared to SEIK 45 million a year ago, an increase with about 2%. With that, we have now covered the three business areas. I will now hand it over to Thomas to provide a review of the third quarter financial results.

Thank you, Johan. And good morning, everyone. Please turn to slide nine. Let me take a moment to explain the FX impact we're currently seeing affecting our assaults. The effect we refer to here is primarily a translation effect, meaning it arises when we convert profits generated in other currencies, for example, the US dollar or the Mexican peso, into our reporting currency, the Swedish krona. As the SEC has appreciated against most of our key currencies throughout the year, the value of those foreign earnings becomes lower when translated into SEC, even though the underlying performance in local currency terms remains strong. So it's important to stress that this is not a reflection of weaker operations or lower margins, but rather a year-on-year comparability accounting effect linked to currency movements. As you can see on the slide, we faced a strong FX headwind, mainly coming from the US dollar, the Turkish lira and the Mexican peso, against which the Swedish krona has strengthened during the year. That the effect comes from these specific currencies is a result of the magnitude of earnings for AAK in each country, combined with the respective currency movements versus the Swedish SEC. For the year-to-date period, this has resulted in a total FX headwind of 251 million SEC, representing a year-over-year negative impact of roughly 7% on the EBIT result, mainly driven by the weaker Mexican peso, but also heavily impacted by the US dollar and the Turkish lira. In the third quarter alone, the headwind was 85 million SEC, also representing a year-over-year negative impact of 7% on the EBIT result. with the US dollar being the largest driver, followed by the Turkish Lira. Moving to the next slide, slide 10. Operating cash flow amounted to a positive 542 million SEK in the quarter. Working capital increased, as Johan mentioned before, mainly driven by inventory, as well as accounts receivables to some extent, which had a negative impact on the cash flow for the quarter. Inventory increased with roughly 700 million SEK in the quarter, driven by Higher volume levels of POM, partly driven by the preparation for the introduction of EGR at the end of the year. Accounts receivables increased by roughly 200 million, driven by sequentially higher sales. The impact in the quarter on working capital from accounts payable is very limited, as it remains stable during the quarter. CapEx amounted to 321 million SEC in the quarter, comprised mainly of investments related to maintenance, productivity improvements, as well as capacity increases and deep bottlenecking. For the full year, we continue to estimate the CapEx spend at around 1.25 billion SEC. Free cash flow amounted to a positive 221 million SEC in the quarter. Turning to the next slide, slide 11. Return on capital employed for the quarter is slightly down from the 22.4% achieved in Q4-24, ending up at 21.6%, adjusted for the one-time restructuring cost recognized in Q2-25. This was driven by an increase in capital employed and, as previously mentioned, mainly driven by the increase in working capital. When we look at the next slide, the net debt to EBITDA ratio was reduced slightly to 0.61 in the quarter compared to Q2 25, but up slightly from the low of 0.29 in Q4 24. The increase from the end of 24 is mainly driven by the dividend that we paid in May of 25, as well as an increase in the previously mentioned working capital. The ratio remains at a level that provides us with continued financial stability and flexibility. With that, I will hand back to Johan for a summary and concluding remarks before we open up for questions.