Rottneros AB (publ)

hello and welcome to today's webcast presentation with the rotneros with us presenting today we have the ceo perry burbon and cfo monica passanen who'll be presenting the q1 report for 2026 and answer questions during the q a after the presentation if you have any questions please feel free to use the form located to the right and we'll take that up after the presentation please go ahead with your presentation

Thank you. Per Bjurgum is my name. I'm CEO of Rotterus since mid-March. So this is done my first quarterly presentation for the company. I would like to start with presenting some highlights for the quarter. EBITDA minus 36. And this is in parity with quarter one, 2025. The results is affected by lower prices and weaker dollar. What is good now in the quarter is that food prices are coming down and that will have a positive effect on our operations. Of course, the environment we are living in today is filled with uncertainty and how that will affect have affected us here under the quarter. I think it's the same as everybody else. And it's just a challenge to understand what is happening in the world. To mitigate the situation we're in, we will continue to work on cost, and we have been successful on fixed costs through the compared to previous years and have had a let's say a very strong fixed cost program in place and we continue to operate to work on cost and and efficiency then i'm going to do a short recap of We are driven by some trends. Here we have four major transit effects of business. Electrification of society is really important. We have a strong position for these electrotechnical pumps. Sustainability as a general trend, going from plastic to paper, affects our business a lot. And here we need to serve this market with special pulp and packaging. E-commerce, of course, is a driver for consumption of fibers. and tissue is a health trends and and personal hygiene is is driving the consumption of cup if you then look into what end use areas we're active in we we have a strong foothold in electrotechnical papers we have a strong foothold in filter and carton board then we also serve are in tissue and printing and writing and some fibers in that. But I want to point out here is that these niches that we are trying to grow within is really important for our future for developing the business. And you see on the percentages here that we are successful of improving the foothold in these segments. And then just a short recap of where we're located. We have the pulp mill in Valvik, the pulp mill in Rotterus. We also have Rottenhus packaging in Kostrin. And we also have our fiber supply companies within Nykvist Skog and Rottenhus Baltics. Some comments on the markets. If you compare to Q Going back a year comparing to comparable quarter, we can conclude that the markets are restrained. But if you start to look on quarter on quarter, then we would like to say that the market is moving sideways. But we are then affected by exchange rates. Prices in SEAT is affected by a weaker dollar. The global markets of stocks levels of MBSK is 44 days. And I think it's been around this level now for some time. And in this price charting here, you see that we in seek down on, if you're positive, you'll see a little bit dip upwards here in the last points. And also the CTP price kind of even out here on a level that hopefully is the bottom. So next slide. And if you then look on Rotterdam's main markets in Europe and see how the consumption of how different segments that we deliver into have developed, then you can see that compared to 25 to 26, there has been It is not a very positive situation. We're kind of back 2.2% on the different grades. But if you look on these others on the very right, where we try to be active in our initial approach, there we have seen a more stability than other grades. If you then look from a regional perspective, The demand compared to 2025 has decreased by 2.6%. And if you look from a regional perspective, Europe has the main impact on this decrease. If you look on North America, it's around zero. And in China and Latin America, you have some growth. And when you look at this picture, then you have to keep in mind that the Chinese share of the pulp market is approximately 40%. So what's happening in China is affecting the whole world. Then I leave the word over to Monica, and she will talk about the financials.

Yes, thank you, Per. As mentioned, we see some lower costs, but the currency has affected us when we compared to the first quarter of 2025. This is the waterfall and where the differences come from. And we're going from minus 27 to minus 36. The biggest negative impact is from price and currency, where currency is It's a big part of the minus 51. In the quarter, we started off by having a tough production due to the cold winter weather and we did lose production tons. Total for the group, we are 5% below in volume versus a year ago, and this impacts us negatively. On the positive side, we have the variable costs, and it is the wood cost that has really decreased starting from mid 2025. We saw some improvements in our results from these decreasing costs already last year. But this quarter, we see that it starts making a big difference. And a year ago, we initiated a bigger program to reduce our fixed cost. We saw that this program was finalized during end of last year, and now we can see that we are 26 million better in fixed costs than a year ago. In others, we did have a positive effect in the first quarter of 2025 when we sold emission rights of 10 million, which we didn't do this year within selenium mission rights. So if we exclude those, we are on a very similar level. But all in all, we ended up with minus 36 for the first quarter in EBITDA. On this picture, we want just to highlight the importance of the cost of wood. This is our total cost structure in the first quarter and the cost of wood amounts to 44% of our cost base. So it's imperative that we keep seeing lower wood costs for our business. Taking a look at the balance sheet. Starting off by the loan agreement, as we mentioned for the year end report, we didn't fulfill all the covenants at the end of December, mainly related to profitability targets. So we've had very good discussions with our lenders during the first quarter and in March, we could enter into an amended loan agreement with the bank. It runs until April 2027 next year. The new amended agreement has new profitability targets, and it also means that we have access to 75 million crowns in our rolling credit facility. We are really keeping our eyes on working capital. We did that already in December, but when we in last quarter decreased um by more than 200 million our working capital so when we compare quarter on quarter or quarter 125 to quarter 126 we have 280 million lower working capital and we continue having that focus we also focus on our investments during the quarter we invested 7 million which is a very low number in 25 we invested 37 million in the quarter and 166 million for the full year. This year, we expect the investments to remain at approximately 60 million. So very low compared to previous years. We also continue to have measures to improve efficiencies, cost efficiency and other measures in our operations. And with that, I hand back to Per to summarize.

To summarize this, the markets are moving sideways. Our food prices are coming down. And as you saw in previous slides, our cost structure. And then also we are living in this geopolitical uncertainty and we need to be ready to handle that if some strange things occurs. But so far so good. And we will also then continue to work on operational efficiency and cost in all aspects. So thank you. And I leave over to the moderator.

Thank you very much, Per and Monica, for the presentation. We'll start with the Q&A here. How much bigger will the impact from lower wood prices be in Q2 compared to this Q1 quarter?

We are a bit careful with giving forecasts, but we see that the prices have continued down, so we will continue to see improvements, but we don't want to give exact numbers. We can also see that for our Valvik mill, we have good availability of wood, and we also get a positive impact from the storm that was in December, Johannes, means that there's additional wood available in that area.

Thank you for that answer. How did the weaker US dollar against SEC affect the Rotterdoss' sales prices and margins during the quarter?

Well, if we look at the US dollar, it was 10.7 as an average for the first quarter in 2025 and 9.1 in the first quarter this year. And this has a big effect. If you see our annual report, we say that 50 euro to the dollar will affect our profitability with 68 million on an annual basis. So you understand that this difference going down or with a weaker dollar had a big impact now in our first quarter. And in the minus 51 that I showed earlier, a big part was currency. Now we have seen that the currency has improved. We're more on an average of 9.2 to 9.3 and that is of course improving the situation.

And what were the main reasons behind the decrease in EBITDA compared with the first quarter of 2025?

The main impacts came from currency, market prices, but also production. We had a very good production year last year and Valvik Mill made a new production record and it started already in the first quarter with good production. This year, as those of you who are in sweden uh realize we we had a very cold winter in january february which did affect us negatively with with some with with several smaller problems in valvik mill where we lost tonnage and and that also impacts our profitability thank you for that answer

how is rotneros adapting its production levels to the current weak market conditions for the ctmp yes the strategy for ctmp is that we are

and to secure margins. We also are exposed to a very volatile electricity market. So strict rules for how the mill is run according to electricity price is applied. And those two measures are the key measures to handle the situation. We also are very diligent on what kind of orders we accept.

Thank you for that answer. And I believe you already touched upon this. Maybe you can add some more color. What impact did the colder winter weather have on the production at Valvik Mill?

I do not relax. It was before you started. Yeah, but it's going to be like 2,000 or 3,000 tons of pulp that was not produced during this time. A bit more even. A bit more, yeah. And the issue is when it's cold, it's more difficult to run these partners. Do you have a correct figure for that?

It depends on what you compare to, but it's approximately 5,000 tons that was lost in Vallvik compared to budget or previous year. And it's several smaller things. But when it's cold and icy, you don't get the same efficiencies in the operations.

Thank you for that. And we'll take one final question here. What measures is management taking to improve cash flow, production availability and overall operational efficiency?

So we are in the process now to identify items that will be, that affects these different vine items in the P&L. This can be of a very different kind of things. The key thing here is to identify these things. take the, you can kind of, you can line up very many different things, but focus on the ones that give the biggest impact with the least resource. So this can be different, different things. It can be how you run the pulp mill. It can be cost things you can look into. Are we organizing the right way? So we would run a structure

give effect in the p l going forward difficult to give any any amount so to say but it will improve the company okay thank you very much per and monica for that and that concludes this q a and i'll hand over the word back to you for some concluding remarks

Yes. Thank you for listening in here. And this was my first report. And hopefully it will go better the next time. So thank you.