Nexam Chemical Holding AB (publ)

CFO Marcus Nyberg. Thank you, Mattias. And what, Ronny, before you present in brief, what have you been up to this quarter?

Well, this quarter we've been seeing a lot of new customers that are not yet on board all over and also work quite a lot on the building more relevant customer information documentation in order to explain our products better.

Okay. And you had a very strong report, so I'm sure you're eager to present, so I'll leave you to it and I'll be back for the Q&A. Okay, thank you.

So, second quarter 2026 report from Nexam Chemical. I will present it together with our CFO, Marcus, who will join in a little bit later in the presentation. So please, next slide. Nexam Chemical, we are a company that work with additives to plastics in order to make plastics better and more sustainable. We have a lot of technology and a very development oriented organization, and we do have a lot of patents on the solutions that we develop. And we are working to make the future of plastics more bright than it otherwise would be. Next slide, please. Yes, this quarter, as you indicated, Mattias, it was our strongest quarter yet in terms of sales and a quarter of many milestones that we'll get back to during the presentation. So next slide, please. Since approximately three years, we have changed a little bit the way how we operate at Nexam Chemical. And one of the most important things is that we have focused or sharpened our commercial focus during these years, continue to do so also. We focus really hard on only additives and how we can enhance performance of plastics and in particular how we can improve recycled plastics and make them more usable in the industry. We have an underlying strategy to deliver a solid profit and a rapid growth towards first of all 300 million SEK from the 200 million SEK where we are approximately right now and way beyond that of course in the years to come. We have We continue to build on a very strong market orientation in the company and we divide our additives, our products into four different customer value groups. One is recycling and the improvement of recycled plastics where we have significant growth and a lot of business opportunity. We also have the segment high temperature which is oriented to the most extreme plastics that are around in the world in terms of temperature resistance and they're used in jet engines and really hot microprocessors where our additives kick out the temperature resistance of the most temperature resistant plastics there are, polyimides, thermoset materials. We also work in aesthetics, giving color to plastics. They will work with, of course, virgin plastics, recycled plastics, and also bioplastics and give them color and durability for life. And we have an additional segment called lightweighting, where our additives enable our customers to produce lightweight, structural foam materials used in composites, for example, in windmill blades, but also in other areas. Today's presentation will focus quite a lot on the recycling segment because it is so significant for our future. Next slide, please. If you look at the various market areas here. A bit more than half of what we do is aesthetics, so color concentrates for plastics. This is a business that provides us with very many customers. It's a day-to-day running production of significant volume. It provides stability and cash flow for our organization and the production means that we need in the other areas. The lightweighting segment, it's a global market, but it's also a niche market with very few customers and potential customers in the world where we have a really strong and I would say dominant position in terms of additives to these structural foam materials. The high temperature segment, which is approximately 10% of the sale rolling 12 months, It's a speciality with a business model, both in microprocessors and in aerospace application that have very long serial productions and very long lead times for new models. So call it a long-term speciality. Also there, it's a niche market with few potential and existing customers in the world. And then we have the areas recycling, which was only a couple of percent a couple of years ago, and is now rolling 12 of the 16% of our sales, which is like a scale-up industry. It bases a lot on the, let's say, technology solutions that we have in lightweight and high temperature, and on the production means and the purchase volumes we have in aesthetics. So all the four of these segments are quite intermingled. This is the current split. Next slide, please. Now turning towards recycling, our solutions for recycling are aimed at improving mechanical recycling and we focus on the big material classes. So we have patented or highly advanced solutions for everything that is polyolefin group, which is polypropylene, low density polyethylene and high density polyethylene. and we're very strong in the area of PET as well, which is the plastic segment with the highest recycling rates. It's used in water bottles and food packaging to a great extent, and there is a very high reclaim rate on those. But the global plastic industry consists of about 450 million tons, It grows every year. OECD has given a 10-year projection of about 50% increase, which is approximately 4% per year in average. And the mechanical recycling part of it, the area that we work inside, is expected to grow significantly. These are the global numbers. In Europe, for example, the recycling rates are more towards 20%, whereas it's around 10% on a global scale. So there is a lot from country to country and region to region. There are also other methods of green plastics, which is chemical recycling when you break down the material to its original components and rebuild it again. It's quite energy intensive and requires very high investments. But it's also an interesting route, and we are working a little bit with that. Also, bioplastics is another route to use biological materials instead of oil to make your plastics. But both the chemical recycling and biobase are quite small in terms of volume on the global market. Next slide, please. Next slide, please. This is how it works. What we do is an additive that can link onto the polymer chains. Polymers consist of very long molecular chains. When the plastic is used and reused, these chains fall apart and become shorter. That's the reason why an old plastic component becomes yellow and brittle, you could say. Our products are added in a very small quantity and links these polymer chains back together. This is the main technology. It's an area where we're, so to say, specialists. And this reaction takes place in the standard processing equipment in plastic industry. So our customers need to do no modification. They add a percent or two of our master batch, and the reaction takes place within a minute or so, which is a normal processing time for the plastic industry. Since the material is bonded onto the polymer chain, there are no byproducts or poisonous rests, and the recycled plastic is still recycled another loop when this modification has been done. In practice, you can see this is an example with a very poor recycled material where we tried to make a blown film, as it's called, and it was impossible, but with only 2.5% of an additive from us, we could make it work. Industrially for our customers, the value is that they can use a higher recycled content without making compromise on the products. We can improve the material performance and fulfill more advanced application requirements. It's an improved process ability for the customer, so fewer line stops and less problems in the production. And it can provide recycled products with a higher value and other uses that weren't possible without our additives. So that's the technological background. Next slide, please. Then in the value chain of recycled plastics, there are these big recycling companies collecting and sorting scrap. They are then cleaned and ground down into small flakes, which are one square centimeter large, and then sorted into fraction. And that is used as a raw material, again, in the plastic industry. So it goes to a compounder that blends it with various other additives, for example, our additives. And then this compound goes to component manufacturers that make various components. Here are some mechanical components on picture, but it can also be a call it a film, for example, for building industry or packaging material or other plastic products. And then these components go to an end product. In this case, it's a robotic lawnmower, but it could be many different kinds of things. It could be ice cream packages, or it could be building. And so our role in this value chain is that we sell additives that are added in a very small percentage, either at the component manufacturer or at the compounder. And the thing is that They are maybe not so cheap, our materials, but they are added in a very small fraction. So per kilogram of material, the added cost is quite low, but the added value to the plastic after this addition is much higher than before. So it's a disproportionate customer value if you add these additives into the recycling loop. So next slide, please. So an example of that, this is from packaging industry. Call it the inverse green premium. It's like we turn the ability to improve better performance into lower costs. So this is the case when ordinarily you produce a recycled food package from PET. You use a very high degree of recycled bottles. Maybe 10% of your own process return and 10% of a virgin material. And by adding our additive, the customer can reduce the amount of the expensive material, increase the amount of the lower cost material. So if you press on a little bit here to the next variant of this slide. We work together then add a lower cost grade at a higher percentage. going from 80% to 28% of the expensive grade in this case, and adding 60% instead of 10% of the lower cost material, maintaining the virgin for the inner surface, and then add 2% of our additive. We add 6% on the cost, but the total customer recipe cost goes down by 25%. This type of calculation can be done for other applications as well, and it is the major driving force for most of our customers in the area that we call recycling. Next slide, please. So. We have very many external market forces working in our favor. It's both economics, but it's also regulation and its brand owner commitments that all reinforce each other towards the direction of using more recycled materials in products. Cost pressure, of course, right now, due to the instability in the Middle East, the polymer prices have gone up quite a bit. was more extreme last time we had this type of presentation, but they are still quite high. And it also... Yes, so we have that, the cost part of it. We have a regulatory pressure, high recycled content requirements coming in very many regions, amongst others in the EU. We have a growing pressure for compliance on this. The PPWR, Packaging Recycling Directive of the EU has just come into force and is planned to increase quite a lot this compliance pressure. And similarly, also in Asia and other regions of the world. And there is a demand for higher quality recycled plastics because when you need to use more and you need to use it in more advanced applications and not only the, let's say, easy stuff, then the demand increases for higher quality. So quality enhancing additives are a good thing there. And there is also a strong direction from brand owners to do self-regulations of various kinds on the global scale. And that is driven, of course, by the end customer expectation of the, let's say, consumer products becoming more sustainable. And then there is the commercial impact for our customers. Stronger return on investments. There are higher incentives to upgrade the recycled streams, and all of this in sum improves the demand for our products. So there's a structural market orientation that is increasingly aligned, you could say, between these factors, which is, I believe, really good for our future development. And we see this in customer meetings that the interest is growing and growing. Next slide, please. Now, Moving on to the figures of the quarter. So, next slide, please. First, a summary. Markus will go in a little bit deeper into the numbers. Record quarter, as we have mentioned before. Just some of the activities we've been up to this month. Price compensations, because of the instability in the Middle East, there has been throughout the value chain from, let's say, natural gas and oil, all the way to end consumers, need to compensate the prices in the plastic industry. We have also been involved in that, of course. We have used the ability of having a little bit better financial position in the beginning of this year to do some really good deals on raw materials at attractive price levels, which has impacted the cash flow a little bit. We have had a lot of intensive collaboration with new distributors. We started one in the USA around the turn of the year. And during this quarter, we have launched France and Turkey, and we started Romania, I think it was in the first quarter. And all of these onboarding processes are very good for both these distributors and for ourselves in order to develop our message and become even more, let's say, customer and market oriented. We do it in a different way now this year than we have done before. We are very intensive in the onboarding process together with these new partners and put a lot of weight on giving them the right sales tools. We have also been to trade fairs like crazy. A lot of the direct customer meetings, going and visiting customers and also improved our digital visibility enormously. If you have a problem in film blowing or extrusion of PET and you use CHET GPT or a co-pilot to try to find out what to do with it, you will find Nexam. And also, we have had a volume increase during the quarter, obviously, because we're selling more. And our organization has done that in a really good way. We have maintained supply precision and a really good quality performance throughout the quarter as well. And it's thanks to our collaborators who have done a really great job, and suppliers, by the way. But I hand over to Marcus here, and he can give you some more insight into the numbers. Thank you, Ronny.

Here's more details about the figures. We had a record quarter. It took five years, by the way, so I guess it's about time, but we hit 60 million. That means a growth compared to last year of roughly 11%, but compared to the first quarter, we really bounced back. The first quarter, we had close to 44 million SEK, so that means a growth actually of more than 35%. Our margins continue to be on 48%. We're getting closer every single quarter to hit the 50. We don't really know when, but that's how Our target, of course, to hit the 50%. We continue to grow in recycling. During this quarter, we were mainly growing by existing customers. And that's really good for us, meaning that once we enter a new customer and they start to use our additives, they start, in general, in small scale, and then use more and more. So that is a really good sign that we are on the right track also on recycling. On EBITDA we had a record of 4.3 and that's actually also resulting in we had a positive EBIT for the first time since Nexam actually started and then we're talking about from 2009. So of course it took many years but finally we have some some profit. And the interesting thing here is, of course, we're really getting into this economies of scale. We can see once we get the volumes, we actually can also see some profitability and get black figures all the way. Our financial position, we are very stable as As Ronny mentioned, we really want to ensure that we can supply to our new and existing customers. We have bought some more stock. It's also linked to the crisis in the Middle East. But what actually is driving some negative cash flow during the second quarter is the outstanding amounts to our customers. And this is just a temporary thing. We sold a lot, we shipped a lot, and we invoiced a lot during May and June. So to expect in the third quarter, of course, the customers then will have paid us. So this will improve, and this will go fast. Go to the next slide, please. And this is a little bit, if you take a look at our history, and this is actually five years ago, how we looked when we actually were on the same top level. At that time, we were very, a bit shy of the 60. And now we're hitting the 60. But we also hit the 60 million SEC with a much higher margin. And our increased margins is also showing that we get a better EBITDA and a better EBIT. And that's, of course, something that we've been working on for several years, that we should have the economies of scale, and you also can see it. We've been seeing this for quite a while, but it's really nice for us, and it's really satisfying to see that we also can present a positive edit. And then one thing that's really interesting for us is when you look at the customer concentration, Five years ago, we had a small number of customers that was actually driving our top line. And we actually had one customer that on an annual basis, we sold to them for more than 70 million SEK. Today, we sell to them for 10 million SEK. It would be nice if they bounce back to the 70. We don't really think so. But we have... a quite wide platform now of customers that are buying our additives and we also start to sell standard products in that we are really at the stage now where we can increase volumes and that is something that we've been working on for many years and now we see it in the figures as well. That is really satisfying for the whole organization and what we have been doing. Can we move on to the next slide? Yeah, this is more into the details, but it is nice to see, and looking at our week start for the year that we are really bouncing back, and we had this record during the spring. And we bounced also back with nice margins. And recycling is continuing to growing. We had a record of recycling. during the second quarter, and that also drives our margin. The segment that is growing the most is recycling. It's also the segment where we have some really, really nice margins. And as Ronny mentioned, we took some strategic decisions to make some kind of good deals on raw material. So that is also promising for the future that we can defend the high margins, but must also hit the 50% that we all are aiming for. So we can go to the next slide. Here we can see disabilities on a 12 month basis. And this is of course something that we've been working on for almost every single day to improve the margins, And we are on a really on a stable level. And we had actually like the 48% now in the spring. So it has been rewarding, but it hasn't really been any big strategic decisions. These have been on every single day that we do work on increasing your margins. And that is really something that the organization has adapted to. Move on to the next slide. Yeah, and this is a little bit what we have been, how business has been transformed during the last three years that we have. We have this stability in master batch that's very much linked to the color and we haven't really been talking so much about the color so far in presentation, but it's a really nice business to have and that makes us. That means that we give many orders every single day we have. efficient operations in place, and it also brings a nice margins. And what we also have been seeing during the spring, that this is a segment that is growing mainly in the Nordics. And we also have been working very focused on this to attract new customers, support existing ones, and once again, come back to the margins and increase profitability. So that's a really important segment for us that keeps us busy on a day-to-day business in operations. And of course we have recycling. It is growing. It is growing both in percentage and it is growing in money and also in profit. So it's really nice before vacation period starts to have these as like the the end for the spring. Can we move on to the next slide? And now I will actually go back a little bit to Ronja again, but as we mentioned, we are finally showing a positive EBIT and this is driven by more volumes and continue to have these high margins. We really have an organization in place to deliver higher volumes than we have today. So we're not done, and we are not expecting or planning to wait another five years until we hit the next record. I can assure you that. But that said, I have to hand over to you, Ronny, again. Yes.

Thank you, Marcus. Just a small comment. In the previous slide, we saw that the high temperature segment had reduced quite a lot in the last rolling 12 compared to before. And this is due to... That segment has very few customers that take big volumes. And one of them, the biggest one, is reducing the stock. And that will go on for probably all of this year. It started already in queue for last year. Maybe we're back into normal production pace by the end of the year. But it's really no change to the, let's say, business relation or anything like that. This will come back. It's just that they are planning on very long term and keep quite high safety stocks and it had accumulated over years. OK, so on these slides, as Marcus is saying, we are starting to prove that we can actually increase the volumes quite a lot. There is still a lot of room left for us to increase production volumes without growing too much on overhead or added investments. And Marcus has always said, every additional cent that we sell for above this, let's say 60 million, 35% that will land on the average. And we are seeing that every day. We firmly believe that we can keep the margins or even increase them a little bit. So it's looking good for the future. So next slide, please. And future, next slide, please. We have our commercial platform that is taking shape. We have done investments on, let's say, whatever we could be able to make ourselves in terms of EBITDA until the end of last year. And then at the turn of the year, we did this emission of shares and are in a more stable financial position in order to invest a little bit stronger in the future with the target to grow faster. So we have had at least 50% increase in let's say customer facing time during 26 compared to before. We have expanded the commercial presence across Europe, North America and Asia. We have these new distributors that were established this quarter. I've myself personally been very involved in the onboarding of the French team, Vanoplast. Excellent people with a really close market knowledge and a big group of customers that really want and need our products. And the same thing is going on in Turkey as well. and in the USA where Palmer Holland still are in the onboarding phase. But they have had a lot of customer interest too. We have also launched a new website called reactiverecycling.com. It will be online this week unless there are any IT problems with a much more application driven positioning. And we have advanced a lot on the technical side, maybe not developing so much new product, but to accelerate customer qualifications and become even more, let's say, tuned in the process from request to serial production. And we have a hugely growing pipeline of qualified commercial opportunities that we are currently working on. So all of this we're working on. You don't see any of it, of course, in this quarter's result, because it's things coming in the future. But we're executing today on the growth that we're seeing tomorrow. So next slide, please. This is how recycling has developed. Another record quarter for that segment or that area. A bit above 10 million now in quarter two. 67% year on year. It was quite a strong comparative quarter last year. And we have a scaling up of existing customers, one or two new customers that had come into play during the quarter and many of them in the pipeline. Next slide, please. This is when we take a step backwards and look at the full global market of plastics and recycled plastics and try to narrow down from the total addressable opportunities that there are across all covered applications and plastics that work inside, which is a huge number, of course, but not realistic to take. But if we narrow it down even more to the to the areas where we feel that our current technology and IP have a great coverage, then it's still a very high number with 2 billion euros. But if we assume a market share of that market, which is much more careful, somewhere around 5% in Europe of our obvious opportunities and 2% in the rest of the world, we can obtain a sales towards probably 70 million euros. It's a quite round number, of course, and a difficult top-down analysis. But what you can say with this is that Compared to our current run rate, we had said we wanted to double recycling this year, so just below 50 million SEK, which is 5 million euros. We have a very, very small part of the cake that we can take, and we see that there is enormous opportunity for us to grow here. And we also see that in the customer interest that we're facing now. that there are so many opportunities out there. And this is maybe the thing that makes recycling different from all previous Nexam initiatives, is that the amount of customers that has a need for the product is enormous. And that's why we put so much effort into it. Okay. Next slide, please. This is our funnel, as we call it, the commercialization engine. We're using the same, let's say, process of developing new prospects and bring them to a commercial production stage as we have done for many years, only that we are fine tuning this process much more now because there are so much more new prospects coming in. We don't put a number exactly on how many prospects that we so to say, meet with. But if you go into the area where we have started to send samples, had technical discussions and are starting to work together with the customers, we have added another 15 compared to last quarter. So we're up to about 145 different clients that are evaluating our recycling technologies. and there are quite a high number, 25 has also increased that are moving into scale up and more advanced industrial testing. And then some where we have technical approval, but not yet production in place and then commercial production to 28 customers. So it's one added since last time. In the high temperature segment, we have also added a few customers. Some of them are in the polyimide segments and some of them are actually in the polyethylene segment where Nexam has tried to be active for at least 10 years, where we're starting to see revived customer interest. And the lightweighting segment is not increasing rapidly, but we did get a new customer in that segment during the quarter. And this pipeline that we're working on is tomorrow's recurring revenue. And that's where we focus a lot of our efforts, both filling on the top and accelerating through the funnel as much as we can. But it is complex. It takes, as we have said many times when we get the question, between half a year to three years from you meet someone that has a really interesting and suitable case until it is actually implemented in production. They don't need to change the machinery, but they need to change the way that they're planning the materials and how they work with it. And there is a lot of uncertainty, obviously, when you add to very high recycled fractions and you need to test the material and the products really well so that you don't get any, let's say, mishaps on the market. Okay, next slide, please. So, the growth outlook is strengthening. mainly because of the commercial momentum. I mean, we have so many interested customers with very good business cases where they get both lower cost and a better environmental profile and fulfilling regulatory pressures and so on, so that we see that there's a lot of things coming in there. And we are also becoming better and better in terms of our commercial behavior and meeting many, many more customers, both, let's say, in the physical world, but also digitally. We see a much higher flow of requests coming in through, let's call it, internet channels. And the distribution platform that we're starting to build will support this further scale up. Also, the fact that we are working with the distributor in a different manner than we have done before is something that I feel personally is changing their prerequisites and their ability to grow business for us in the future. Operating leverage, I think we have our costs quite well under control. We're working very focused and let's say seriously with the margin improvement activities. And this quarter, I think, has demonstrated that the operating leverage of our business model is actually there and proven now in reality. We have the growth platforms that we're looking at. We have a lot of innovations that support the growth in recycling. We have started to add a couple of additional call it niche additives for the recycling market. As we work with new customers, we start to see new customer needs on the market as we developed with that. But we also have a really strong position and collaborate well with our customers in PET foam in color and in high temperature. And we are now in a financial position also, so that there is no question if we can support growth or not. So we have everything in place and we're looking forward to coming here with proper results and not a black zero, as Marcus said. Next slide, please. So why invest in us now? Because first point I think would be because we're at the commercial inflection point. We are at the record revenue now, but we have growth potentials for the future, and we are passing through the ceiling of EBIT 0 that we've been fighting for for some years now, and we will continue in that direction. And we are entering industrial scale production also in recycling. And it's working quite well, of course, because the technologies, materials and so on are quite similar to the other segments that we have. So we're operating, we're growing something new, but we're operating in a, let's say, industrial field where we know how it works. Scalable commercial platform. Yeah, of course, with the, let's say, scalability of the organization, we talked about it. large untapped growth opportunities, really much opportunities out there and every day. Last week I was out traveling together with Vanoplast in France meeting customers and we had to select and all of them wanted to test our materials of various kinds and all of them were really, really interested in this. It's a huge untapped market out there. And We have been doing this for a long time and will continue to do it. So the pipeline is full of projects also closer to commercialization, of course. It's not only the new ones coming in. And we have also this differentiated customer value, meaning that we provide the customers with a solution that both save them money and improve their environmental, so to say, performance. And we do it with a quite strong IP and technology position that gives us some kind of uniqueness. But it's also connected to understand what to do with that IP, so to say, in terms of application technology, where we're also improving quite a lot. And we have the resources in place. So I think it's a good time to invest in Nexam. I've done it fairly recently, again. And everybody in the management team have shares in our company and believe in what we do. So next slide, please. Yes, this is a screenshot from the new site that we have created, reactiverecycling.com. It will be up and running this week. And anyone interested can go in there and take a look and see how we are intending to present ourselves. We have not changed the nexamchemical.com platform yet, but it is to follow during the autumn or later this year. Okay, I think we're approaching the end of the Q&A session here. Next slide, please. Yes.

So, thank you for your attention. Thank you so much, Roni and Marcus. And let's start the Q&A off by introducing Lara Muhtadi, equity analyst with ABG Sundahl Collier. Please welcome Lara and go ahead with your questions.

Yes, thank you, Mattias. Just a few questions from my end. Well, obviously, you reached record sales and positive EBIT in the quarter. But how should we think about the sales level going forward? Is this 60 million something to build on from here or should we expect variation between quarters given the order driven nature of the parts of the business? I guess what I'm trying to understand is where there may be some bigger orders that help the sales figure in the quarter and how should we sort of think going forward?

Yeah, we had Some variations, let's say, in the running business during this quarter, which was a little higher sales than usual in the lightweight segments and a little bit lower sales than usual in the high temperature segments. So they kind of balanced each other. I think this run rate is the run rate that we have right now, but we're aiming to build on that because we see that there are new customers coming in and our intention is definitely to build. However, quarter three, a lot of our customers and ourselves are closed for maintenance and vacations and so on. So the third quarter is usually a little bit lower numbers and it's expected this year too. But going forward, we're building on this. This is our new platform that we're reaching upwards from. Yes. Mark, do you have anything on that or do you agree?

Yeah, yeah. I mean like for the third quarter it's more or less like our customers they are shut down for like three weeks and that's the yeah yeah that's how it is I guess great sounds promising but if I recall you said that the recycling growth mainly came from existing customers ramping this quarter how much can you

How much more can these customers grow, would you say, before they're actually fully ramped? And maybe of the newer projects that are in the pipeline, how many do you expect to reach serial production, maybe contributing over the next 12 months?

Yeah, the ones that have come in during the, let's say, first two quarters this year can ramp quite a lot. We also have customers that are purchasing continuously for a year with really significant growth potential by broadening it into more plants and so on, which we expect will happen. So there is a significant growth potential of that. And there is a significant growth potential in the new customers coming in. But they will also start small and continue to ramp up and so on. We will have a combination of the two. We set ourselves ahead of this year, the target to double the sales in recycling, and they were 23 million last year. We said 46 million this year. We're up to, what is it, 16, 17, 17 right now. We still believe that we can beat that. And then we want to double again the year after. So it feels realistic when we look at what we're working with, which customers we have already and which ones that we are working with for the future. So we keep those targets.

Yes. Very clear. And well, obviously very promising that you delivered positive EBIT for the first time. And this was essentially on flat operating expenses. against the 11% growth and would you say that the current cost base is the one you grow into or I mean will the further sales growth just drop through, or do you think that then maybe the pipeline in the second part of the year would require stepping up some commercial production spend again?

Not really. We actually expect that the level we are at for the moment is that you can expect going forward. Of course, we will add some more electric operators in production maybe and some spending, but this is a level that we're at at the moment and expect to continue.

We see, because of course there is a margin spread depending on type of product and so on that you have. But we are quite confident, if we look at the, let's say, call it future product portfolio balance, it looks like it will not disturb our 48% level, rather that we have, but this is more maybe hope and belief that we will reach the 50 soon enough. Yeah, we're working for it every day, but it's the sum of 1000 small actions. Yeah.

And while still on the topic of the gross margin, you mentioned your ambition of sort of around 50. You've mentioned this before. What do you think takes you to those last two points? Is it maybe a mix? Is it pricing? Is it volume leverage?

It's very much linked to the mix, to be honest. If our temperature is coming back to, and we expect that maybe next year, they will drive the margin and recycling.

Yes.

Over the segments, lightweight is a little bit on the low side. But the segments where we are growing recycling is on the positive side of the 50s and also high temperature.

There's a margin spread in the aesthetics business, which is quite significant. Let's call it smaller volume specialities have really high margins and higher volume, more commodities have a much lower margin, of course. So it depends a little bit on where the balance lands. We're developing all those businesses, of course.

Well, you added distributors in France and Turkey and you have a growing pipeline of opportunities. How long would you say it typically takes for a new distribution partnership to generate revenues?

I think you have to give a year to see the first business dropping in. And then it's a little bit question of activity, intensity, and luck, and some other things, how fast that then grows, I would say.

Yeah, we started in the U.S. beginning of the year, so that is what to expect.

That's more realistic than the other ones that we have started. So we follow activity level, how many customer visits, how many samples were sent out, how many qualified leads do we find and so on through that in order to follow up the distributors in the starting phase because it's not like selling ice cream on the beach. It takes a bit longer time.

Yeah, I understand. I just wanted to ask about competition as well in reactive recycling. Obviously, you're launching a new website now, and as the segment scales, you're becoming increasingly visible maybe in the space, and there are much larger additive suppliers that also operate in the market. What would you say that keeps a customer on Nexam's chemistry? Is it maybe the formulation lock-in? You've talked about costs quite a lot. Is it pricing?

Yeah, it is. Let's say we need to be very pointed in the solutions that we have and maintain our technology on the, let's say, front line, you know, and protect as good as possible with patents and remain, let's say, very eager to improve all the time. And we are that. We're that in all segments, actually. And in, let's call it the other three segments, you have to run to stand still. And so we're used to this kind of constant innovation mode. And then another thing that is maybe worth to consider in that is continue to develop fast, but the thing is that the larger corporations have a much slower validation and, let's say, go-to-market time than a small and agile company like ourselves have, and this works to our advantage. But obviously, there are some disadvantages with the terms of, let's say, and stuff of that nature. So we try to focus on niche applications and be smarter technically and faster than everybody else. That's how we move it and it seems to be working.

Makes sense. And just the last one from me. We've obviously pet foam has been quite weak for a while and lightweight improved now in Q2 versus a weak Q1. What would you say is behind the improvement and how do you see this area developing from here maybe for the rest of 2026?

I don't know, it's difficult to answer. That business is, they are still working on a lot of application development. It's a novel material, it finds a lot of new applications. But there are also some difficulties in the market of course. Let's say like this, the sales in Q1 and Q2 happen to be much more in Q2 than Q1 in this year, and the average of that is kind of the run rate of that business. Wouldn't you say so?

It's kind of quick. We have a limited number of customers in the lightweight platform, so it could be a little bit the timing of orders and shipments and so on. But it's At one rate, I guess, it's realistic and it can improve.

Yeah, it can absolutely improve. And the sentiment, if you take the sum of discussions with many of those customers, is that the sentiment of their market was much better in Q2 than in Q1. Yeah, that's positive. Yeah, it's not bad. No. But it's not back to the heyday some years ago.

Right. Understood. It seems like you have a more optimistic tone, though, generally compared to Q&A. Okay, great. That was all from my end. Thank you very much.

Okay. Thank you so much, Lara.

Thank you.

Thank you, Lara Murtadi of ABG Sundal Collier. And we have a few questions from our viewers. One of them, I think, was just being answered. But there was one regarding how big is your biggest customer as a percentage of turnover in Q2?

Something around six or seven percent was the biggest customer during the spring.

Okay, thank you. Could you tell us some more of the development of VerdoFoam?

Yeah, VerdoFoam is to They work with bioplastics, PLA, coming from corn. And they use this to make foam, and they target in the first time both packaging and construction industries. It's a Dutch company. I have a very good collaboration with them. We did send out, I happen to know, we had a delivery to them now in June, and they are continuing to develop their processes and their market. And it's going in the right way for them, but they are in early stage in their company. But it's like they have a really good product market fit for their product.

Okay. And if we move to Canada and the Canadian customer, are they up to speed with regular deliveries now?

Not yet, no. They are still in customer-to-customer testing phase and are not quite up into operational volumes yet.

And what about the TAPE Extreme project? How is that developing?

We've worked on that. It was a limited time sponsored by the UK government oriented to Civil Aviation. And there are in the not exactly the same project group set up initiatives ongoing to try to find funding for a second stage or like a continuation of that, but in a slightly different setting. And we don't know exactly when those decisions will be taken in the UK, but we're quite active in following up those opportunities, and we would like to continue to develop this technology because we think that it would be significant for, call it, European defence technology level. So we hope it will continue, but right now it's a little bit on the back burner.

Okay. And when it comes to recycling, how certain are you that you will be able to keep the plan with double turnover this year and next?

I think we answered that already. We still believe that we can achieve that. And it's our target to do so. And we do everything in our powers to do so. Then it's a little bit up to luck or when the order falls, whether it's in Q4 or Q1 and so on. But we're definitely going in that direction.

And some while back we had a discussion on an earlier quarter regarding change of listing for your stock. Is that still something that you are planning and what needs to happen before you do that?

It's not on the agenda for the moment. It might come, but at the moment, it's not on the agenda for the board. So we need to come back to that if it's becoming more interesting going forward.

And it's a board question, really. I'm no longer on the board working operational. Yeah.

All right. Some of your distributors from earlier have had a tough time in selling. What is the difference with your new distribution partners compared to them?

You could say that some of our distributors have had problems to sell. That's correct. And mainly the further away, the more difficulties, you could say. The ones that have been extremely successful are the distributors in Denmark and Finland. They have been already, in plastic color times, very successful. We're trying to look at that concept and formulating how we collaborate in a different way now, going forward, with the existing distributors and the new ones coming on, in order to give them more powerful tools in their hands to sell the products and explain to the customers why this is good. So, I believe that we're trying to use that. And we're changing a little bit how we behave with them in order to better support them.

Okay, and one final question. What is your absolute focus for the second half year of 2026?

It's the funnel accelerating leads into testing, accelerating testing into proof of concept and accelerating proof of concept into production testing. So working on accelerating the funnel, I would say, is our main focus for the second half of this year.

Okay. So thank you, Markus and Roni, for today's presentation and good luck going forward. Oh, thank you, Mattias. Thank you.