Duni AB (publ)

Hello and welcome to the JuniGroup Second Quarter Interim Report 2026. 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 Bablu Zakashku. You may begin.

Thank you. Hi, and welcome to JuniGroup's report for Q2. Yeah, the headline is, it's been a challenging quarter impacted by the ongoing logistic transition. We'll come back to that, of course. If we look at the agenda, we'll go through some highlights and then the key activities in Q2, what we have been doing, a little bit around the market outlook, and of course, the financial performance within both business areas. and looking into our sustainability and our long-term targets as a company and then at the end a little more deeper dive into the financials and the summary and the Q&A at the end. So, if we take the headlines here in Q2, of course, logistic transition is the big, big thing, of course, impacting our sales and operating income in the quarter. And, of course, we've done a lot of work here and tried to stabilize, of course, during the quarter. We'll come back to that. Positive was that Germany remained stable, and they were unaffected by the transition. We haven't moved those volumes yet to the new warehouse. And we continue to work on our strategic priorities with the special uniform and lighting in focus. So if we look at the logistic transition here and a little bit of background, what we have done here is that we are creating a new modern logistic setup. Yeah, before we had ten warehouses. Now we're moving to one warehouse. It's a state of the art distribution center in Meppen. and we have chosen an outsource operation with a logistic partner there. And, of course, it will be expected improved scalability here and, of course, reduce the long-term cost for us, just thinking around going from 10 to 1 warehouses, of course. And, of course, we had some delivery disruptions in the beginning, especially the outbound. Inbound has worked very well. and of course this has resulted in lost space and increased costs in form of dual inventories and more expensive transport solutions in the quarter. We have delayed the German volumes which are still delivered then from our old warehouse and it's been working very well and we see that we've got good traction in the German market this quarter. And the situation has gradually improved during the first end of June but also the first day here of July. of course not fully normalized yet. But the reduction of our outstanding back-ordered orders now is contributing positively to the earnings and helps offset the remaining inefficiencies that continue to affect the operation. So if we look in a little bit what kind of activities we have done in the quarter to stabilize is that, of course, as I mentioned, we postponed the German transition. We worked a lot with improving the capacity and efficiency work in the warehouse and the delivery flows, done some small changes that have actually had a great impact now on getting delivery performance up. And we are working really tight with our partner here in order to stabilize the operation, which is working at the moment. So that is positive. We'll come back to this later on in the Q&A here, of course, and in the financial run-through. A little bit also, we haven't just worked with this in the quarter, and there are some other activities, of course, focusing on one of our strategic areas is that we want to expand our offering through innovation and collective growth initiatives. and there we have a completed acquisition of SoulServe to the concept Uniform which then adds service and machines to our concept which is really great and also some new launches in packaging products that are really interesting for the market And we had a big launch of Unilighting solutions that was introduced here in Milan and Copenhagen in the first. And that will now be launched in September, the first step of the Unilighting. And the one big milestone is also that we've been to actually serve a in a lot of major events in Europe. So that's also a great achievement in terms of innovation. other really interesting areas that we mentioned before of course is that we're working really hard to turning of course sustainability into scalable solutions and we have actually completed our case out of the PFAS in all products we launched a carbon footprint calculator that is a big help for our customers the big ones especially And we have now launched a reuse system in a market in Munich town. And it's a really interesting project now and really good investment from the municipality in Munich and a lot of other municipalities is looking into this in Germany. So we'll see how that works, but it looks very interesting. And, of course, also working with composting, which we've done at Swinorock Festival and Västeröland Bicycle Event in Sweden, which also is very interesting, where napkins and packaging turn into composting and soy in the end. Really great concept. Yeah, if we look a little bit on the market development, of course, it's been a week, a year, and we had anticipated a little bit stronger year this year, more visits actually from before the year started. But with everything that happens, of course, in the Middle East, it's definitely the market. And especially I think it's interesting to look at the bottom graph on the right side where you have the restaurants and hotels and markets and where actually the conclusions of those numbers is that the VAT now has come down then from 19 to 7 percent but it looks like maybe the restaurant hasn't lowered the full scale so there's the difference between minus 5.5 and almost two percent in nominal terms value then so that's really interesting in a way that's pretty good for us in Dune because we want to have restaurants that actually EARN MONEY AND ACTUALLY CAN BUY QUALITY PRODUCTS THAT'S THAT'S THE POSITIVE THING OF COURSE BUT STILL OF COURSE IT'S A BIT OF A CHALLENGING MARKET AS WE KNOW IN MOST COUNTRIES IN EUROPE AND IF WE JUST LOOK AT THE OTHER SLIDE HERE THE DEMAND OVERALL the data we get is for the big five markets in Europe and of course it's less visits than anticipated as I said in those five markets so far this year in the first six months which then dampens. We believe this was supposed to be 1% plus up, but it's minus 1%. That's maybe the same trend that we've seen in the past quarters now in Europe. And hopefully, of course, it looked a little bit better here with the Iran war. We thought it was ending, but now it's back again. And of course, that dampens a bit and creates a lot of uncertainty again. So that's maybe the conclusions of that. If we look at the top financial, we'll come back to this. We were down on net sales, and of course, we had a big profit drop of 58 million in operating income. Come back to the effect of that. And the margin was, of course, lower than versus last year . Going more into comments and of course if net sales and operating income are affected by the same things, I mean, sales goes down two percent in six currencies and of course the The whole transition where we moved the warehouse in Germany to a new place and started up has really caused problems, of course, and affected both operating income and the next stage. And actually, on the positive side then, actually, the German volumes, they stayed in the old warehouse, which we postponed the move. And there we've seen a really stable pace. So that's positive in that sense that actually then the problems are logistic in the states that take markets that are affected. And of course the Middle East is putting pressure also. And we saw some light there actually, but then of course the last week here has dampened that as well. and we have some higher IT and energy costs affecting the operating income but also we are offsetting that by savings in safety marketing. Positive is the food packaging turned around here and Australia grew slightly and the income development was more positive and creating better markets. That's the highlight, and now Magnus will go into a little bit more deeper.

Thank you, Robert, and good morning, everyone. So as usual, I will take you through our two business areas in more detail. I'm starting off with dining solutions, our table setting offer. So the net sales amounted to 1 billion 45 million compared to 1 billion 138 million last year, and that is a decline of 93 million. And the single largest explanation is the temporary constrained delivery capacity that we have talked about during the scale-up of our new external logistics setup in Methen. And that meant that we could not fully serve the demand that was actually there. Operating income decreased from 99. to 31 million, and the operating margin declined to 3% compared to 8.7 last year. I will talk you through the drivers on the next slide. So in fixed currencies, sales declined by 6.2%. I want to be clear about the nature of this decline. Again, it is primarily a delivery issue, not a demand issue. The limited outbound capacity during the warehouse transition meant we could not fully meet demand during this period. And the clearest evidence of this that we have mentioned is Germany. German distribution has not yet moved to the new logistic setup, and Germany delivered a stable development on par with last year in both sales and earnings in an otherwise weak market, we must say, as we saw on the previous page. And that contrast with the rest of Europe underlines that the shortfall is transition-related rather than a loss of market position. So beyond logistics, which has dominated, of course, this quarter, I think three factors shaped the quarter. First, we have the mix shift and that continued. A higher share of sales come from lower-priced products. and our customers' own brands within Horeca, and that weighs on the sales value and gross margin. Second, we have the Middle East, and that declined sharply due to the geopolitical situation and reduced travel. We saw some stabilization towards the end of the quarter. Let's see what will happen in the future. And third, on the cost side, we carry double warehouse structures and more expensive transport solutions during the transition, in addition to higher energy costs and rising input prices. So to summarize styling solutions, it is, of course, dominated by a temporary transition-related delivery constraint with an underlying market position that Germany shows remains intact. So the negative effect remains at the start of Q3, but are expected to decrease now gradually as operations stabilize and consequently clearly lower negative impact versus outcome in Q2. Returning now to food packaging solutions, our sustainable food packaging offer. So here the net sales amounted to close to 780 million compared to 746 million last year. Operating income improved from 22 to 34 million SEX and operating margin strengthened to 4.3% compared to 3% last year. So a quarter of clear profit improvement despite the European logistic headwind as we also see here. If you look a little bit more on the details, sales grew by 4.3% in fixed currencies, driven by contributions from recently acquired companies and the continued positive development in Biopac Group. So in Australia, we see slightly positive organic growth that is supported by a regulatory tailwind from more strict plastic restrictions, but also increased sales to new customers. Europe was negatively impacted by the logistic transition in the same way as dining solutions. However, the uniform showed a relatively more resilient development, and that is aligned with the previous quarters where we believe very much in this concept. On profitability, margins improved in both Europe and Biopark. In Europe, lower volumes were more than offset by improved margins and a continuous focus on profitability. BioPact delivers a strong gross contribution supported by both the sales growth and improved margins, but also higher indirect costs absorb part of that effect. But all in all, the net impact on earnings was clearly positive. And as Robert mentioned, during the quarter, we also completed the acquisition of Zooloft, consolidated from 1st of April. The company was around 50 million SEK in annual revenue. And that strengthens the uniform offering with machines, service capacity, and of course, an established customer base. And that takes the uniform clear step into the industrial segment in Sweden, but also in Nordics. So if we summarize food packaging solutions, continued top-line growth, improved margins, and a strengthened platform through SolSol. The rolling fair amount profitability trend continues to move in the right direction. With that, I hand back to Robert.