Duni AB (publ)

Hello and welcome to the DUNE Group Year-End Report 2025. Throughout the call, all participants will be in a listen-only mode, and afterwards, there will be a question-and-answer session. Please note this call is being recorded. Today, I am pleased to present Robert Dacascog, President and CEO. Please begin your meeting.

Thank you. Yeah. Welcome to the year-end report for 2025. Headline here is an increased full-year net sales despite weak demand in the market. If we look at the agenda today, we have highlights first, a little talk around the market outlook and what happens in the market, a summary of Q4, and then we're going into our business areas, and then sustainability targets and initiatives there. And at the end here, financial summary, and then in the end, questions and answers. All right. So if we go to the highlights for the year, full year first here, we have a net sales that increased in 2025 versus last year. And, of course, a lot of challenging market conditions in the market we will come into as well. If we look at organic growth declined, and also the net sales was also impacted due to currency effects. And also, of course, the subdued demand in the market. Acquisitions had a positive effect on our net sales during the year. And we have really worked hard on taking efficiency initiatives. We strengthen our long-term capabilities. And the board of directors proposed an unchanged dividend of six, five Swedish krona, same as last year, five, to be divided into two partial payments over the year. If we look then at the Q4, there we had a net sales decrease to 1.965 versus 2057 last year, but it's up in fixed currencies with 1.5%. And this is driven mainly by the acquisition of the companies in the UK and the city. Operating income then declined from 178 to 162. but down 2% in fixed currencies. So currency effect there as well. Decline is mainly due to, of course, negative currency effects, as I said, and, of course, the soft demand in market. The organic growth was down with 7% versus last year in Q4. So if we look then at the market, how that looks, and as you can see, bottom right there, it's all red down there, and both in nominal and real terms. and it's been a tough market in 2025 as well. And, of course, inflation has continued to weigh on restaurants and the purchasing power both on consumers and the restaurants. And, of course, the nominal growth has not been sufficient to offset the pressure on the real demand in the market. If we look a little bit on the broader picture here on the food service market dynamics, And you can see on the top right there, visits continue to further decreasing in the year, actually, between 24 and 25, actually down 1%. And there was some anticipation, actually, of increasing in the beginning of the year, but that didn't really happen. And if you look, then, it's still down 11%, and this is the top five markets in Europe from versus 19 and 11% down. And the outlook then below then in the bottom right here is that it will be a little bit more stabilization in the visits in the market and projected then 1% up almost for these five markets in 2026. And we can move to the key financials, so high-level turnover net sales decrease. The operating income decreased also, and the operating income ended up at 8.2% versus 8.7 last year in Q4. Coming into more details around this now. So, as said before, total sales increased 1.5% in the quarter in fixed currencies, and that was mainly driven by the acquired companies. And what effect the net sales was the negative organic growth, down of 7% in the quarter, but also then, of course, negative currency effects. Also, being in between larger contracts now with the retail channel and overall a lower bond in Horeca sector, where actually it's a bit of a negative mix here that customer placed maybe more order on lower quality and lower priced products in the assortment. We also saw an impact here on Christmas sales. It was lower than last year in the horeca sector. And to balance this, we had a growing price increases in the quarter, and the BiPAC group in Australia continued to grow in local currency, which was positive for the quarter. And, of course, operating income corresponds a lot to this then. And, of course, it's driven by currency effects and, of course, the organic growth as well with mainly the mixed effects in the market and the products we sell. We have good cost control and we're taking a lot of decision to improve efficiency in the company, both in production. Now we're moving into the scaling up our new logistic facility. And this will, of course, strengthen the results going forward. And we also took some extra efficiency measures and programs here in the Q4 as well, which we'll come into as well. And positive improved market in BiPAC Group, thanks to lower inventory levels, brings an improvement of the results in both Austin Dollar and SEIC, which is important. All right. We're moving in, Magnus, to the BA.

Thank you for that, Robert, and good morning, everyone. And as usual, I'll take you through a more detailed review of our two business areas, starting with dining solutions, which includes our table setting products. So despite the positive contribution from Poppibs, that position, the quarter was held back by currency headwinds and weaker sales in Europe, particularly so within our retail segment. And as a result, sales were essentially flat versus last year, ending That means operating profit decreased from 152 million SEK to 132 million, and the margin landed 11% compared to 12.6% last year. I will walk you through the main drivers behind this development on the next slide. So if we adjust for acquisitions and currency, sales were actually down 9%, and the main decline came from the retail segment. So, the main part of this is related to contract facing, where the quarter fell between old and new agreements. We have seen this type of volatility before, although I think the magnitude in Q4 was clearly significant. In Horeca, the hotel restaurant, the cater interface, which is the dominant segment in the business area, volume measured in pallets shift was slightly positive, actually. However, we continue to see a shift away from branded premium offering to more private label solutions. The customers are trading down, and that is a pattern we have seen across the previous downturns. However, also we have recovery following as the macro conditions improve. So this negative mix effect was particularly noticeable in Q4 with a lower share of branded sales. The positive aspect is that we have largely been able to retain customer loyalty by offering alternative solutions. Price effects were slightly below what we anticipated early in the year when we talked about it, but it's still positive, contributed with a low digit single number, I would say. True focus work to adapt our production setup and cost base, and that means including adjustments to lower volumes and weekly demand. We have mitigated part of this negative mix impact, and we've also been able to protect our gross margin in this position as well once the market conditions improve. Our acquisitions, Robert talked about them, continue to progress according to plan and with synergies carrying into 2026. And finally, as we have said a couple of times now, the negative FX effect in the fourth quarter, similar to what we experienced earlier in the year compared to 2024 when FX contributed positively. The year-on-year delta in operating income from FX alone is around 20 million in the quarter, and it's more than 50 million for the full year. So to summarize, Q4 is a bit disappointing in terms of top line, and together with these FX effects, this explains the profit decline. We have taken measures to increase efficiency, and that includes the warehouse consolidation we are in the moment of doing, and that is planned for 2026, going forward, and with full savings expected in 2027. Some cost improvements will already materialize during 2026. As Robert mentioned, we have taken So if we look to food packaging solutions, which focuses on sustainable food packaging, sales declined by 10%, largely driven by FX effects, especially so versus the Australian dollar, which is the most important currency for this business area. But despite these lower sales, operating profit improved from 26 million to 30 million, and that means a strengthening of the margin from 3.1%. to 3.9%. Moving into a little bit more of the details, and as mentioned, the biggest impact on sales comes from the strong SEC, and that, again, particularly against the Australian dollar, which is now around 630, and that should be compared to levels closer to 7 SEC, Australian dollar. The difference actually more than 10%. But if we look on Europe, the demand remains soft in the takeaway segment. while the reform, as we have mentioned several times before, grew slightly. Our Australian-based BiPAP group showed growth in local currency that contributes to the improved results. So we see a slow but steady margin improvement trend reflecting several years of paper work. During the year, we have invested heavily in updating our product portfolio, and that prepares us, for instance, for the non-PFAS product. giving us a strong position ahead of legislative banks coming into force in 2026. Inventory level, which were elevated early in the year due to this transition, I think they are now normalized, and that also relieves pressure on the profits. So as with timing solutions, we have protected the gross margins despite, I think, the challenging market conditions. So with a more specialized sales force and market-specific content, We are well positioned to guide customers through the very complex landscape of sustainable packaging. We continue to see competitors, often from Asia, taking shortcuts around standards and regulations. Over the coming years, I think we expect the upcoming directives to clearly strengthen this relative competitive position. We completed two acquisitions in the business area during the year. They are small in size, absolutely so. and only contributed to a few percentage to the top line. However, they bring valuable fiber technologies that strengthen our portfolio. So to summarize food packaging solutions, sales were a week and a quarter, but we have a strong gross margin. Combined with not being vertically integrated in this business area, it has given us good room to mitigate the impact on the software demand. So we'll have our hand over to Robert.