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 and thank you for joining us and thank you also for your interest in AAK. As you heard, I have today with me our CFO Thomas Bergendahl. And with that, please turn to page number two. What we will cover today is quarterly highlights, some selected events, business and financial update as well as some concluding remarks and then we take Q&A and we are scheduled to continue for about 45 minutes. With that, let's move to page number three. 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 are going over the material for you today. With that, let's move into the presentation on page number four. Against the backdrop of disciplined execution and on a strong making better happen culture within our company, we enter 2026 strengthened by a solid execution in 2025. For the full year, operating profit increased by 9% at constant exchange rates and excluding the hillside divestment and the second quarter restructuring cost that we took. Leveraging our decentralized operating model, we adapted well to what we could call a challenging volume environment and continued to really generate value for the company and our shareholders. Moving on to the fourth quarter performance. We delivered a solid result in a demanding market environment in the quarter four. Consumer sentiment and demand in our key end markets remained under pressure, particularly due to elevated chocolate prices. Despite that, operating profit increased by 7% year-on-year, excluding the hillside divestment and a 80 million SEC negative currency impact. When including the currency translation effect, operating profit declined by 2% compared to the corresponding quarter last year. Volumes amounted to 507,000 metric tons in the quarter, which is a decline by 2% year-on-year if we exclude the hillside divestment. Profitability remained strong in the quarter, with operating profit per kilo reaching SEC 2.45. Excluding the hillside divestment, this represents a 2% increase year-on-year and a 9% increase at fixed exchange rates. The improvement was partly driven by continued internal optimization, including productivity and procurement improvements at our oil refining plants, and progress in the fit-to-win cost optimization program that we launched in 2025. Profitability was also supported by portfolio and price management, with continued higher sales of specialty solutions. In addition, the fourth quarter profitability benefited from favorable market conditions for cocoa butter alternatives. Operating cash flow amounted to SEK 288 million in the quarter. Cash flow was supported by strong earnings and was adversely impacted by seasonal sourcing and rising costs for some of the raw materials that we use. With regards to capital structure, Our return on capital employed was 20.9%, excluding the second quarter one-time restructuring cost. Net debt to EBITDA was at 0.60, also excluding the one-time restructuring cost. This reflects a strong balance sheet and a financial flexibility for AK. The board, supported by management, is proposing an ordinary dividend of SEK 5.50, per share for 2025 corresponding to a 10% increase to previous year. In addition, the board proposes the introduction of a multi-year share buy back program of SEK 1 billion per year over three years to a total of SEK 3 billion starting in 2026. The board also proposes an extraordinary dividend of CEP 3.85 per share for 2025. Supported by a strong balance sheet, we remain well positioned to deliver on our capital allocation priorities while continuing to invest in the business and pursue value-accretive M&A opportunities. Overall, we are pleased with the quarter. given the challenging market condition, but we are not satisfied and see further room for improvement. We remain focused on disciplined execution, profitability and cash generation as we move forward. With that, let's move to next slide, page five. Some selected events. And where we... Then if we turn into some more notable events of the quarter, these highlights are continuing to show the progress that we have on impact and the growing recognition for the work that we do. During the quarter, AAK's Colonna Faso sourcing program in West Africa achieved fair wild certification, a first globally for SHEA. This certification verifies the legal and sustainable collection of wild harvested she kernels across roughly 400,000 hectares. Our Colonial Fossil Program directly supports and empowers more than 230,000 women collectors and their families. The certification further strengthens our ethical sourcing agenda and enables customers to leverage Fair Wild claims on their products. In chocolate and confectionary fats, our Ileksav EN10 was awarded Ingredient of the Year 2025 by International Confectionery Magazine. Launched in June 2025, the product addresses industry challenge during the enrobing process that helps our customers improve their operational efficiency, while also providing all other benefits that comes with a high speciality cocoa butter alternative from AAK. We also made strong progress in CDP's 2025 environmental ratings. Our scores improved in two out of the three categories. Climate improved to B from C, Forest improved to A- from C, placing AAK in the CDP's leadership band for forest. These improvements reflect continued progress in areas such as deforestation-free palm oil, low-carbon investments, and stronger sustainability governance and reporting. Starting with the 2025 annual report, we will prepare our sustainability reporting in accordance with the CSRD. Fit on people and culture. Following our latest employee survey with an impressive 91% participation rate, 16 AAK countries achieved Great Place to Work certification, up from 12 in the previous one. This recognition reflects a consistent, positive, and inclusive workplace experience across our organization. More importantly, the survey provides valuable insights to how we can continue to improve the performance of the organization in AK. And with that, let's move to slide number six, some business highlights starting with food ingredients. In food service, volumes excluding the hillside investment were on par with the same period last year. Lower volumes in the bakery segment were largely offset by growth in dairy. Operating profit per kilo was at 2.36 SEC, broadly in line with last year, and included a currency headwind of SEC 0.18 per kilo. At fixed exchange rates and excluding the hillside divestment, operating profit per kilo increased by 7%. Our operating profit excluding hillside amounted to SEC 735 million. This included a negative currency translation effect of SEK 57 million. And if we look at this operating result at fixed foreign exchange rates and excluding the hillside divestment, our operating profit increased by 7%. Moving on to chocolate and confectionery on slide 7. Fourth quarter volumes in chocolate and confectionery fats declined by 4% year-on-year compared to the same period last year. Overall, the challenging market environment and the elevated cocoa prices continue to weigh on consumer demand in the fourth quarter. Against this backdrop, we delivered a fourth quarter volume performance that held up well compared to development in the underlying chocolate market. Operating profit per kilo remained strong and increased to SEC 4.40 from SEC 4.19 last year. Currency translation had a negative impact of SEK 0.19 per kilo. At fixed foreign exchange rates, operating profit per kilo increased by 10%. Operating profit amounted to SEK 524 million, up 1% year on year, but included a 23 million SEK headwind from currencies. At fixed foreign exchange rates, operating profit increased by 5%. Then next slide over to business area technical products and feed. Volumes in technical products and feed declined by 5% year on year, mainly driven by lower volumes in technical products. Operating profit per kilo was at CEC 0.84, down slightly from CEC 0.86 last year and representing a 2% decrease. Operating profit amounted to CX 64 million compared with CX 69 million last year, a 7% decline year on year. With that, we have now covered the three business areas, and I will hand it over to Thomas for some fourth quarter financial results. Please go ahead.

Thank you, Johan. Please turn to slide nine. Operating cash flow amounted to a positive 288 million in the quarter and 862 million SEC for the full year of 25. Working capital increased in the quarter, mainly driven by negative impact from the development of inventory and accounts payable, while accounts receivables had a positive impact on the cash flow. The value of inventory increased with roughly 800 million SEK in the quarter, driven by seasonal sourcing activities mainly related to SHE, but also to rapeseed, as well as an increase in price of several raw materials. The negative impact in the quarter on working capital from account payables is driven by the raw material mix and related payment terms. Account receivables decreased with roughly 500 million SEK in the quarter, driven by lower sales at year-end, in line with normal quarterly seasonality. CapEx amounted to 335 million SEK in the quarter, comprised mainly of investments related to maintenance, productivity improvements and capacity increases, as well as the bottlenecking. The capex spend for the full year of 25 ended up at 1.3 billion SEC in line with previous indications. Directional capex spend for 2026 is 1.5 billion SEC. Free cash flow amounted to a negative 47 million SEC in the quarter. Please turn to the next slide, slide 10. Return on capital employed for the quarter is somewhat down from the 22.4% achieved in Q4 2024, ending up at 20.9%, adjusted for the one-time restructuring cost of 250 million SEC recognized in Q2 2025. The outcome of the ratio was driven by an increase in capital employed, mainly due to the previously mentioned increase in working capital. Please turn to slide 11. The net debt to EBITDA ratio remains stable at 0.6 in the quarter compared to Q3 2025, slightly up from the low of 0.29 in Q4 2024. The increase from the end of 2024 is mainly driven by the dividend paid in May of 2025, as well as the previously mentioned increase in working capital. Please turn to slide 12. As Johan mentioned earlier in the presentation and is outlined in our Q4 report published this morning, we're updating our capital allocation framework. Our first priority remains to invest in organic growth of the business. This includes continued investments in innovation, capacity expansion and capability development. We also focus on efficiency improvements to support profitability and scalability over time. Acquisitions are a second capital allocation priority and remain an important part of our strategy. We focus on M&A activity that supports geographical expansion and capacity expansion, bolt-ons, as well as potential adjacent product portfolios. We also look to strengthen technology and capabilities where it enhances our strategic position. Third, return to shareholders. Within capital returns, the ordinary dividend is the primary and foundational mechanism. Our dividend policy targets 30 to 50% of net profit with the ambition to continue to grow ordinary dividend over time in line with our long-term financial targets. Share buybacks are a second priority tool and subject to maintaining leverage within 1 to 1.5 times net debt to EBITDA target range. and may be suspended in connection with significant increases in raw material prices, M&A activity, or other strategic cash needs. Extraordinary dividends are not structural and may be proposed when balance sheet capacity allows. To conclude, we maintain a solid balance sheet that provides financial flexibility. Where relevant, we have the potential to temporarily operate with a net debt EBITDA ratio of up to three times to support acquisitions ahead of the upcoming agm in may the board supported by management proposes an ordinary dividend of sec 5.5 per share for 2025 an increase of 10 year-over-year the introduction of a disciplined share buyback program of one billion sec per year over three years three billion sec in total starting in 2026. as well as an extraordinary dividend of SEK 3.85 per share amounting to 1 billion SEK for 2025. Each of the proposals are subject to separate approvals by the annual general meeting in May. Our capital allocation framework is designed to drive long-term shareholder value creation through sustainable and profitable growth. With that, I hand it back to Johan for a summary and concluding remarks before we open up for questions. Go ahead.