Thank you. Hi, and welcome to Duni Group's report for Q2.

Headline is it's been a challenging quarter impacted by the ongoing logistics transition. We will 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 deep dive into the financials and a summary and a Q&A at the end. If we take the headlines here in Q2, of course logistic transition is the big big thing, of course impacted our sales and operating income in the quarter.

Of course we have 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 remains stable and they were unaffected by the transition, we haven't moved those volumes yet to the new warehouse.

We continue to work on our strategic priorities with especially Duniform and lighting in focus. If we look at the logistic transition here and a little bit background what we've done here is that we are creating a new modern logistic setup, yeah, before we had 10 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. Of course it will be expected improved scalability here and of course reduced the long-term cost for us, just thinking around going from 10 to one warehouses of course.

Of course we had some delivery disruptions in the beginning, especially the outbound, inbound has worked very well. Of course this has resulted in lost sales and increased cost in form of dual inventories and more expensive transport solutions in the quarter.

We have delayed the German volumes, which are still delivered 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. The situation has gradually improved at the end of June, but also the first days here of July, of course not fully normalized yet.

The reduction of our outstanding backorders now is contributing positively to the earnings and helps offset the remaining inefficiencies that continue to affect operations. 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 improved capacity and efficiency work in the warehouse and the delivery flows, done some small changes that has actually had a great impact now on getting delivery performance up. We are working really tight with our partner here in order to stabilize the operation, which is working at the moment.

That is positive. We will 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 our strategic areas is that we want to expand our offering through innovation and selective growth initiatives. There we have completed the acquisition of Soulserve to the concept Duniform, which then adds service and machines to our concept, which is really great.

Also some new launches in packaging products that are really interesting for the market. We had a big launch of Duni lighting solutions that was introduced here in Milan and Copenhagen in big fairs, and that will now be launched in September, the first step of the Duni lighting.

One big milestone is also that we've been first here to actually serve a plastic-free cup 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 phaseout of added PFAS in all products.

We launched a carbon footprint calculator that is a big help for our customers, the big ones especially. 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, we'll see how that works, but it looks very interesting.

Of course also working with composting and which we've done at Sweden Rock Festival and Vätternrundan bicycle event in Sweden, which also is very interesting where napkins and packaging turning into composting and soil in the end, really great concept. If we look a little bit on the market development, of course it's been a weak year and we had anticipated a little bit stronger year this year, more visits actually before the year started, but with everything that happens of course in the Middle East, it's dampened a bit the market.

Especially I think it's interesting to look at the bottom graph on the right side where you have the restaurant and hotels and market, and where actually the conclusion from those numbers is that the VAT now has come down then from 19 to 7%, but it looks like maybe the restaurants hasn't lowered the full scale, there's the difference between -5.5 and the almost 2% in nominal terms value then. That's really interesting.

In a way that's pretty good for us in Duni, because we want to have restaurants that actually earn money and actually can buy quality products, that's a positive thing of course. Still of course it's a bit of a challenging market, as we know, in most countries in Europe.

If we just look at the other slide here, the dynamics overall, the data we get is for the big 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, the first six months, which then dampens. We believed it was supposed to be 1% plus up, but it's -1%, so that's maybe the same trend that we've seen in the past quarters now in Europe.

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. That's maybe the conclusions of that.

If we look at the top financial, we will come back to this, we were a bit down on net sales, and of course we had a big then profit drop of 58 million in operating income, come back to the logistic that affected that, and the margin was of course lower than versus last year, 3.6. Going in more into comments and of course net sales and operating income are affected by the same things.

Sales was down 2% in fixed currencies, and of course 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 net sales. 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 sales, so that's positive in that sense that actually then the problems are logistic in the sales markets that are affected.

Of course the Middle East is putting pressure also and we always saw some light there actually, but then of course the last week here has dampened that as well. We have some higher IT and energy cost affecting the operating income, but also we are offsetting that by savings in sales and marketing.

Positive is that food packaging turned around here and Australia grew slightly, and the income development was more positive and creating better margins. That's the highlights and now Magnus will go into a little bit more deeper.

Thank you, Robert, and good morning, everyone. As usual, I will take you through our two business areas in more detail, and I'm starting off with Dining Solutions, our table setting offer.

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. 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 Meppen, and that meant that we could not fully serve the demand that was actually there.

Operating income decreased from 99 million 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.

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.

The clearest evidence of this, as we have mentioned, is Germany. German distribution has not yet moved to the new logistics 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.

That contrast with the rest of Europe underlines that the shortfall is transition-related rather than a loss of market position. 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. 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.

To summarize Dining Solutions, it is a quarter dominated by a temporary transition-related delivery constraint with an underlying market position that Germany shows remains intact. The negative effect remains at the start of Q3, but are expected to decrease now gradually as the operation stabilizes, and consequently, clearly lower negative impact versus outcome in Q2.

Turning now to Food Packaging Solutions, our sustainable food packaging offer. Here, the net sales amounted to close to 708 million compared to 746 million last year.

Operating income improved from 22 to 34 million SEK, and the operating margin strengthened to 4.3% compared to 3% last year. A quarter of clear profit improvement despite the European logistic headwind, as we also see here.

If we look a little bit more on the details, sales grew by 4.3% in fixed currencies, driven by contributions from recently acquired companies and a continued positive development in Biopac Group. In Australia, we see slightly positive organic growth that is supported by regulatory tailwind from more stricter plastic restrictions, but also increased sales to new customers.

Europe was negatively impacted by the logistics transition in the same way as Dining Solutions. However, Duniform showed a relatively more resilient development, and that is in line with the previous quarters where we believe very much in this concept.

On profitability, margins improved in both Europe and Biopac Group. In Europe, lower volumes were more than offset by improved margins and a continuous focus on profitability.

Biopac delivers a strong gross contribution supported by both the sales growth and improved margins, but also higher indirect costs absorb part of that effect. All in all, the net impact on earnings was clearly positive.

As Robert mentioned, during the quarter, we also completed the acquisition of Soulserve. It's consolidated from 1st of April as a company with around 50 million SEK in annual revenue, and that strengthens the Duniform offering with machines, service capacity, and of course an established customer base.

That takes Duniform a clear step into the industrial segment in Sweden, but also in Nordics. If we summarize Food Packaging Solutions: continued top-line growth, improved margins, and a strengthened platform through Soulserve, the rolling 12 months profitability trend continues to move in the right direction.

With that, I hand back to Robert.

All right, yeah. Just to remind ourselves here is that despite all the struggles with the logistics at the moment, we have an aim for the future mission to to become a trusted sustainability leader, and I think the the main thing for Duni here is that we we are enabling people to enjoy good food and and and actually meet in restaurants and and actually get the food to their houses and and help that today and and of course for generations to come.

That's the main thing. We have three strategies, and I think going into them is that, expand and innovation is important, and there, as Magnus was onto, we talked about Duniform here, and lighting are the two one we're really focusing on now for the for the coming months here and the years coming.

Of course, the strengthening our market position in Europe and Asia has been our two focus, yeah, geographical areas. Of course Asia-Pacific has been a bit struggling, of course especially the Middle East and what that does to Thailand and so on, but that is in the long run, we really believe in that and the the middle class in in Asia-Pacific is growing a lot, so that's a very interesting market.

Of course what we're working on and why we do the logistics move is that we we need to enhance our efficiency, operational efficiency, and we're doing, yeah, shorter things there and long-term things. Of course our ESG agenda then adds to this, and we have seven targets that we measure.

If we take the next slide, how it looks at the moment, and of course if we comment on sales growth, which we know is it's been a negative sales development over the past 12 months, and of course that's is explained as we talked about quite a lot recently in general weak market. Of course now with the logistics situation that has even further taken that number down, of course.

I can mention, and of course operating margin goes in line with that, and I can mention that the climate target actually, we have reached that actually already and are down 62% versus the target of -50% versus '19, which is great. We have a little bit of a higher index now this quarter because we are are using a little bit more LPG gas in in Skåpafors, our mill.

Also great that we have a good traction in suppliers who have signed the code of business conduct and increasing that, and that is actually coming from Biopac Group that has signed more code of conduct contracts with us. That's good progress on those.

All right, moving into financials.

Thank you, Robert. If we start with the income statement here, net sales declined by 3.2% in the period and by 2% in fixed currencies, and organic growth was -3%, and as we said, the delivery constraint from the logistics transition is the single largest factor for this.

If we look on the gross margin, it declined to 20.9% from 23.1%. However, the operating gross margin was 21.9%, closer to last year, but there is a pressure and that comes from lower volumes, the negative mix effect we talked about, and of course the transition cost that sits in cost of the goods sold, as mentioned previously.

On indirect costs, the pattern from previous quarter continues. Selling expenses are contained by the realization of previously announced cost savings in sales and marketing, while we see administrative expenses increased.

That is IT costs linked to our own ongoing digital investments, including the ERP program, as we also have mentioned previously. Energy costs also developed negatively in the quarter.

Reported EBIT of 70 million includes a restructuring cost of 33 million. There are two items on this: cost for the unutilized part of the new external warehouse in Meppen, we haven't moved everything as mentioned, but there is also an efficiency program within sales and admin cost with an expected annual saving of around 30 million Swedish crowns full effect, and that will be from the fourth quarter.

Restructuring is excluded from operating income and reported as items affecting comparability together with acquisition-related amortization, just to be clear. The financial net was -27 million compared to -24 last year.

Two effects to be aware of: several interest rate swaps of favorable levels matured during the period, and then we have the new Meppen lease carries an annual interest cost of around 28 million. At the end, if we also look on the tax, the year-to-date effective rate is 48.8%, that of course looks very high, and it is closer to 30% excluding prior-year adjustments.

The mechanics are straightforward. In periods where group profit before tax is close to zero and when the Biopac Group's share of profit becomes proportionally larger, that lifts the blended rate of tax.

I think we've touched upon this a couple of times before. Net income for the quarter was -15 million SEK, and earnings per share to the parent company was -44 öre compared to 1.25 Swedish crown last year.

If we move over to the business areas, the slide summarizes what we have covered, I think. For the first half year, Dining Solutions at 5.4% operating margin, that is a decline from 8.9%.

Food Packaging Solutions improves to 3.4%, and the group is at 4.6%. On a rolling 12 months basis, it is now to 6.6%.

The gap to our 10% target remains primarily as a function of volumes, that is still a challenge in tough times, and also the branded share of sales, not the structurally weak gross margins or excessive indirect costs. With volume recovery, operational leverage will support margins clearly, and in the meantime, we continue to adapt the cost base with new efficiency programs that should underline this.

If we look a little bit on the cash flow, operating cash flow in the quarter was positive at 90 million compared to 150 million last year. I think that's a resilient outcome during the earnings dip supported by working capital release of 43 million in the quarter.

Higher accounts payable and other working capital more than offset build in the receivables. For the first half, operating cash flow was -7 million SEK compared to 43 last year.

The deviation is explained by two factors: lower EBITDA, 245 million versus 307, and the higher capital expenditure of 107 million. I want to highlight the inventory discipline that has been a concern actually for us since the pandemic.

Despite carrying double stock structures during this transition period, the inventory build up year-to-date was contained at 32 million, and that's an optimization work from the last year and that I think is now paying off. On a rolling 12 months basis, operating cash flow was 362 million compared to 446 million for the full year 2025, a level we expect to recover as the transition costs subside and earnings normalize.

If we take the last slide on the financial position, I think the balance sheet reflects two distinct things in the quarter, one structural and one temporary. The structural item, in January, we gained access to new logistic facility in Meppen, which is recognized as a financial lease of approximately 600 million over 15 years, and this is the dominant driver of the increased net debt to 2.5 billion from 1.6 last year at the year-end.

It's not an increase in traditional interest-bearing debt, and it reflects a long-term capacity commitment that secures our delivery structure for many years, very important for us. The temporary part is the working capital build and weakening earnings in the quarter, which we expect to normalize again, as mentioned, when the logistic situation stabilizes.

On financing, I can comment a little bit on that. We have strengthened the structure during the period.

In March, I think already communicated, we signed a new long-term revolving credit facility, 200 million euros, with a 3+1+1 year tenor. As of now, end of the quarter, that facility is sustainability-linked as well.

In June, we also converted the existing 200 million loan with Svensk Exportkredit into a three-year facility of 25 million euro. Together, I think this gives us a robust and also a diversified financing platform throughout the transition period.

Finally, I can just mention return on capital employed is going down. We focus very much on this year, and of course, it reflects the earnings dip, and again a figure we expect to recover when the logistic situation normalizes.

To summarize the financial position, the balance sheet has absorbed a major structural investment in our logistic capacity and the temporary operational disturbances in the same quarter. The financing is secured, working capital remains controlled, I must say, outside the transition effect, and the leverage increase is explained and should be understood and expected to reverse direction as earnings recover.

Thank you for listening, going through the numbers, and I now hand back to Robert for some concluding remarks.

Just a short summary then, concluding here that of course the quarter has dominated by the logistic transition then and the performance there. There's been a lot of measures taken in the quarter that actually have supported now a good gradual stabilization, and we've seen the backlog really dropped here in July as well, which is great and following the plan.

The implementation of the measures has been positive. We have actually also worked a lot with the strategic initiatives and despite all this fuss around this and doing progress in especially lighting and Duniform, which is great.

Then of course, all focus remains then on the improved profit and the cash flow and our competitiveness in the market with our products. All right, then we open up for Q&A.

Thank you and good morning, Robert and Magnus. Starting off with a question on the warehouse transition.

You state that the situation is, or essentially gradually improved during July, but still of course has not normalized. When do you expect the outbound capacity to be fully normalized?

Is there a risk of the sort of excess logistics costs extending into Q4 and offset the potential efficiency savings that you've guided for in the same quarter?

Thank you, Johan, for the question. Regarding the state there is that the plan is that the backlog then will end here in end of July, and then in a way it will be a normal position.

Then next phase in that is our German volumes, yeah, and those of course we want to move as soon as possible, but we will not move them until we are 100% sure that we have a stabilized warehouse and operation. That's the plan and for that.

Regarding cost, of course there will be some extra cost here going into Q3 because of we haven't moved all the volumes from Bramsche. That will prolong.

Then of course it depends on when we move the German volumes, that's the key, and we, yeah, and the aim is to move it as soon as possible. If we get the right answers here in July now and beginning, yeah, and the KPIs are right, and then we can stabilize that maybe a few weeks, then it will go pretty fast.

On the other hand, you never know, then it could take a bit longer, but, yeah, so that's, I think.

Base case is that the German volumes will be moved during Q3 then?

That's the base case and maybe more, yeah, mid-end because we're already in of course mid-July here. That's the, yeah, best case and then, yeah.

Got it. A follow-up on the same topic.

You stated that the overall financial impact in Q3 is expected to be significantly less than in Q2. How large was the impact from the logistics disruptions specifically in Q2?

How much is significantly less here, sort of using the Q2 number as a reference point?

Magnus here. Valid questions.

As we indicate, the deviation we had in Q2 was 50 million versus last year and 50 to 70 million, and we'd state that the majority comes from the logistic cost. I think there are two components in the logistics disturbances.

One is direct cost, where it's more easy to quantify these. We measure it and log every single item here.

Then of course, you can say it was roughly more than half of the deviation from last year, the direct costs. The other component in logistics is the loss of revenue.

Part of it is more temporary, you move it forward with backlog and then it comes back. Part of it is lost.

Talking about the number for Q2 and Q3, of course it is closer to the lower part of what we indicated of the deviation in Q2. When we say significantly less in Q3, we talk about maybe 1/3 or something like that, 20 to 30% of the cost as we see now mid-July versus Q2.

That gives you a little bit of the span of the cost we're talking about. Hopefully regarding the revenue, once we stabilize the situation, we will also not have an issue with loss of revenue, so that will disappear, and that's super important.

That's very helpful, Magnus. Thank you.

A final question on the sort of mix shift towards lower-priced product here. It's been an ongoing headwind and from what I gather, also an effect in Q2.

Firstly, could you by any chance quantify the impact from negative mix on organic growth in the quarter? Then secondly, do you see this as a cyclical tradedown that potentially could reverse as consumer confidence improve, or is this more sort of a permanent repricing of the category, in your opinion?

I can start with the last question here and then. I think historically, I think we've talked around this before, but I think we also went out actually, we've done some surveys with our customers, and especially some who actually have changed then from higher quality to lower, and most of them say that they will go back when times are getting better.

I think that's something we really believe in. I think historically, that has been the case as well when it's been downturns, that we really believe in.

Also, yeah, more from our side then, everything we do now in our sales force, everything is focusing really hard to help the customers and also really push Profil Print, for example, with the high premium qualities Dunisoft, Dunicel in there in order to, yeah, get the customers actually to trade back as well. We have a big focus with our sales force on that as well to help the customers coming back maybe sooner than later.

Maybe I just jump in on the first part of the question, Johan, on the profitability impact of this. It is important for us to sell our brands.

It's products that is profitable for us. It's something we work with and something we invest in in our machinery park, but also in our whole commercial setup and marketing setup.

We invest a lot, and we take pride in that. It is also reflected in the gross margin, and just to give you an idea, our brand product is roughly double gross margin than the private label, it is a significant difference.

Of course, we bring a lot of value into that that we try to convince our customers, and there's no question that is appreciated in the market, but in tough times, we see the challenges. Yes, it has an impact, and I'm sure you can do the calculation when you set it up that this mix effect has its toll on our P&L.

Got it. Thank you so much for taking the time.

I'll get back in the queue now.

Thank you.

Thank you.

Hi there. Thanks.

Erik Sandstedt here at Kepler Cheuvreux. Just a follow-up question on the answer to the earlier question about logistics.

Did I understand it correctly that the significantly lower impact that you refer to in Q3 versus Q2 basically is around 1/3 of the impact you had in Q2, 1/3 of the 50 to 70 million?

You should take the lower part of the 50 to 70, because we said the majority of the deviation in Q2 is related to logistics. There are some other components we talked about that had a negative impact.

It is a lower part, and if you take 1/3 of that, then you get a rough idea. I think it's important to state that this is what we see today.

We are in the 14th of July, it's two weeks into. The trends are clearly improving.

All the curves are going in the right direction. We will not move, as Robert said, the German volumes until we are dead sure that we can deliver and we do not disturb anything to our customers again.

That mean that we rather take more costs to protect our brand, to protect our delivery performance, than take any risk in this. There is uncertainty related to these numbers I'm giving you, which you should just be aware of.

It's correctly understood, yes, Erik.

Perfect. Thanks for clarifying.

If I understand it correctly, it seems that the logistic disruptions are primarily a Q2 and Q3 issue then, with limited impact in Q4, assuming, of course, that the remaining transition of the German goods is completed successfully. Is that the right way to think about timing?

I would say so, absolutely. That's our, yeah, what we think ourselves.

Perfect. Thanks.

Finally, just on the logistics side, I think you elaborated on it, but how has this impacted your business relationships basically? Have you talked about permanent losses of sales and so forth, but what has the customer interactions been?

Of course it's been tough for the customers. They expect a good delivery like they always get from Duni historically, it's been tough.

Of course some customer had to find other suppliers of course short-term, and of course we need to get them back of course, and most have had delays in their deliveries. I think the main thing for us there is to be very clear, even if it's delayed, when do you get it, and that has been a little bit hard in the beginning to sort that out.

I think that's have maybe put some constraints on the relationship as well, because if you can't answer that, that's the main problem. I think that's something we now have stabilized, and we are much more in control of over that.

I think a lot of also customers had had their fair share of maybe moves of warehouse, some are quite understanding as well, but of course they want the products on time. We have a long relationship with many, I hope really that that will be,

yeah, continuing. Perfect.

Thanks. Then just finally on your long-term financial targets.

If we assume that the logistics issues are sort of stabilized eventually, what do you see as the biggest obstacles to reaching these targets?

The biggest obstacle is the macroeconomic climate, as we are dependent to the increase in demand from the market. It is tough to save ourselves to 10% target.

That should be recognized. We have dropped now, you can see it in the German official numbers, that the number of visits is down 20% before the pandemic.

Even a small part of that would be extremely helpful to come back to a little bit better numbers. It has been three tough years from a consumer perspective, and we need some help from the market.

We know when we get that, we will have a very good operational leverage. That's the good part of being vertically integrated.

We get that, but it's also tough part when the volumes are going down. I would say the market situation needs to improve, and the consumer needs to feel a little bit better and dare to go out and eat.

That's number one, I would say.

Makes sense. Then finally actually, could you just share some details on your Middle East exposure?

It is limited in the sense of share of group sales. We're talking about very few percent, but of course the decline in Q2, but also in Q1, first half year, has been dramatic, I would say.

Nobody has went over to Dubai or that area, but also we see in Thailand, our factory in Thailand and so on and whole of Asia has been impacted by less traveling overseas. It is a share, a small share of the group's revenue, but the decline has been dramatic.

Yeah. Understand.

Perfect. Thank you very much.

Thank you.

Thank you, everyone, for listening in, for great questions as well, and I wish everyone a great summer, and thank you for listening in. Bye.