AAK AB (publ.)

Welcome to the AAKQ1-2026 report presentation. 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.

Good morning, everyone. Thank you for joining us, and thank you for your interest in AAK. As you heard, with me here today to review our first quarter results is our CFO, Thomas Bergendahl. Please turn to page or slide number two. Today, we will cover quarterly highlights, selected events, and the business and financial updates, followed by concluding remarks. This presentation is scheduled for 45 minutes in total, including questions and answers at the end. And with that, please turn to page number three regarding forward-looking statements. 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. With that, please turn to slide Four quarterly highlights. We delivered a solid start to the year, with both organic volume growth and continued strong profitability. As expected, currency translation had a negative impact on reported figures. Operating profit increased by 11% year-on-year at fixed exchange rates. Including currency effects, growth was more modest at 2%, reflecting the headwind from FA. Volumes amounted to 515,000 metric tons, corresponding to a 3% increase year-on-year. This marks a return to growth following a period of softer demand, supported by improved commercial execution. Profitability remained strong, with operating profit per kilo reaching SEC 2.49. This represents a 9% increase at fixed FX rates. The improvement was driven by continued internal optimization, including productivity and procurement improvements across our oil refining footprint, as well as the ongoing impact from our Fit2Win program. In addition, we benefited from improved portfolio and price management, positive operating leverage from higher volumes, and supporting market conditions for cocoa butter alternatives. Operating cash flow was strong at say at 1.395 billion. This was supported by earnings as well as positive effect from working capital. Thomas will elaborate a bit more on the drivers later in this presentation. Return on capital employed was 20.7%. excluding the one-time restructuring cost in Q2 last year. Net debt 3BTA was at 0.39, reflecting a strong balance sheet and continued financial flexibility. Overall, we are pleased with the start of the year, particularly the return to volume growth and continued strong profitability. At the same time, we are not satisfied, and we remain focused on further improving our performance. Our priorities remain clear. Try volumes, strengthen profitability, and maintain discipline in execution. And with that, let's turn to the next slide. Some comments on selected events, starting with the annual report for 2025, published earlier this month. This is our first fully integrated report. combining financial and sustainability disclosures in line with the new CSRD regulation. This is now a requirement, but also an important step in increasing transparency in how we report our sustainability impact. A key element is our first double materiality assessment, which forms the foundation for how we identify and report our most relevant impacts, risks and opportunities. The sustainability statement has also been subject to limited assurance by our external auditor. During the quarter, we also participated in the World Economic Forum in Davos. I represented AAK in discussions with industry leaders, policy makers, and experts on topics central to our strategy, particularly the role of food systems in supporting better health outcomes. Building on this, we saw an increased focus on non-communicable diseases, where AAK was invited to contribute a broader system-level perspective in relation to this. This aligns well with our role in complex value chains and our focus on scalable, plant-based solutions. And importantly, Davos provides a platform to position AAK at the center of key global discussions and strengthen relationships that support our long-term strategic priorities. Turning to sustainability performance, we were awarded a silver medal in the 2026 ECOWADIS assessment. We achieved a score of 74 out of 100, placing us in the top 12% of companies in our category. Rating reflects continued strength in areas such as environmental reporting and supply chain utilities. Finally, an update on our new food service facility in Staffanstorp, Sweden. Construction is progressing well and according to plan, both in terms of timeline and budget. The facility is expected to be fully operational by the end of this year, with production ramping up through 2027, replacing the current Dalby site. Once completed, the site will strengthen our food service platform through increased capacity, improved efficiency, and more scalable operations. Overall, these developments reflect continued progress across our strategic priorities, from transparency and sustainability to external engagement and capacity expansion. Please turn to the next slide for a review of performance per business area, starting with food ingredients. Volumes in food ingredients increased by 5% year on year. Growth was relatively broad-based across segments and regions. In bakery, we saw a broad-based growth across all regions, led by Asia, the Middle East, and Africa. In dairy, performance was mixed, with overall volumes declining. Asia, the Middle East, and Africa grew, while the Americas and Europe declined. Special nutrition grew slightly year on year, driven by Europe, while other regions were softer. Food service declined slightly compared to the first quarter last year. Operating profit per kilo amounted to SEC 2.42, down 7% year-on-year in the reported numbers. This includes a currency headwind of SEC 0.21 per kilo. At fixed exchange rates, operating profit per kilo increased by 2%. Operating profit decreased by 2% to SEC 752 million. This includes a negative currency impact of 66 million. At fixed exchange rates, operating profit increased by 6%. Next slide, please. Over to chocolate and confectionery fats. Volumes in chocolate and confectionery fats declined by 1% year on year. Performance was mixed across regions. The Americas and Europe declined, while Asia, the Middle East, and Africa grew. From a product mix perspective, the portfolio of cocoa butter alternatives developed positively and grew in the quarter, including CVEs that was flat year on year. This together with higher volumes in spread was offset by lower volumes in filling fats and non-speciality single oil solutions. Operating profit per kilo increased to 4.23. This includes a negative currency impact of SEK 0.43 per kilo. At fixed exchange rates, operating profit per kilo increased by 14%. Operating profits increased by 2% to SEK 532 million. Currency had a negative impact of SEK 54 million. So, at fixed exchange rates, operating profit increased by 12% in the quarter. Over to the next slide and highlights for technical products and feed. Volumes in technical products and feed grew by 1% year-on-year. Performance was mixed across segments, where technical products delivered growth in the quarter, while feed declined slightly. Operating profit per kilo increased by 3% and reaching SEC 0.70. Operating profit increased by 4% to SEC 54 million. With that, we now covered the three business areas. I will hand it over to Thomas to review the first quarter financial results, as well as a closer look at our current CapEx priorities. Over to you, Thomas.

Thank you, Johan. Good morning, everyone. Please turn to slide nine. Operating cash flow amounted to a positive 1.4 billion SEK in the quarter. Working capital decreased, contributing to the positive cash flow. This was driven by a reduction in inventory and an increase in accounts payable while accounts receivable increased, driven by volume increase and seasonality, which then impacted negatively on the cash flow. The decrease of the inventory in the quarter of almost 500 million SEC was driven by lower inventory levels, partially upset by an increase in price of raw materials. CapEx amounted to 290 million SEC 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 2026 is expected to be slightly higher compared to 2025, at roughly 1.5 billion SEC, and in line with the indications given in the connection with the Q4 report. And I will come back to our CapEx spend later on in the presentation. Free cash flow amounted to a positive 1.1 billion SEC for the quarter. Turning to slide 10. Return on capital employed for the quarter remained strong at above 20% at 20.7 and on poor with last quarter. Adjusted for the one-time restructuring cost of 250 million SEC recognized in Q2 2025. Year over year, the return on capital employed is slightly down from 22%. mainly prompted by the increase in working capital driven by raw material prices. Turn to slide 11, please. The net debt to EBITDA ratio came down from 0.6 in the previous quarter to 0.39 in Q1, close to the recent low of 0.29 in Q4 2024. The ratio is expected to increase in Q2 2026, all else equal. driven by dividend and the initiation of the share buyback program, provided that these are approved by the AGM. Turn to slide 12. Let me briefly touch on capital expenditure. And as previously communicated and mentioned in this presentation, again, our investment level in 26 is expected to be somewhat higher than the recent year at around 1.5 billion. Starting with project governance on the left-hand side, our investments follow a structured and disciplined process. Each year, we build a three-year rolling pipeline based on bottom-up input from our sites and regions. This is then prioritized and aligned through the annual strategic planning process in combination with the target setting of the coming year. For 2026, this translated into an initial pipeline of about $2.5 billion. Then we have prioritized this list down to approximately $1.5 billion. The pipeline is split between maintenance, optimization, and growth projects. The first category, roughly 600 million SEC, or 40% of the spend, ensures operational stability, efficiency, and sustainability across our existing footprint, while growth projects are focused on capability and capacity development, strengthening long-term competitiveness and enabling future volume growth. Moving to our current investments, making up the 2026 CapEx, These are focused on three main areas. Firstly, supply chain resilience. Here, we're evaluating a potential investment in the she-value chain in West Africa, including crushing in Ghana, and progressing the already announced joint venture with K2K in Malaysia for specialty palm fractions, both aimed at reducing volatility by supporting a more secure access to and quality of key raw materials. Second, capacity. This includes investments in food service, such as the new facility in Saffronstorf, Sweden, that Johan mentioned before, and a hot-fill capability in our Runcorn facility in the UK, also food service, enabling impact pasteurization, cleaner label products without added preservatives, thereby entry into adjacent categories. It also includes continued expansion in Karlsson, Sweden, all aimed at supporting future volume growth and a more flexible and scalable production footprint. Third, portfolio enhancement and technology. Here, we're increasingly investing in innovation, often in collaboration with external partners, to meet future demand for healthier and more nutritious food, improved functionality, such as taste and texture, more sustainable solutions, and increased supply chain resilience and versatility. And this is closely linked to our better futures innovation pillar that we have shown and discussed before. Key areas include precision fermentation, power to X technologies, and then somatic processes, where we continue to build capabilities through both near and long-term projects. We're also exploring new natural inputs for non-food applications from non-fossil sources, although this remains at an early stage. In addition, we're investing in a pharma facility in India, focused on non-active delivery systems, strengthening our position in higher value-added specialty ingredients and expanding into adjacent growth segments. While these investments are smaller in scale today, there are important building blocks for future growth and long-term competitiveness. Finally, on the right-hand side, from a capital markets perspective, these investments support de-risking of supply chains. capability and capacity for volume growth, as well as stronger sustainability position. Together, this strengthens our ability to deliver long-term margin resilience and earnings growth, in line with our 2030 aspiration. And with that, I will hand it back to Johan for a summary and concluding remarks before we go for questions.