Thank you. Welcome everyone to Duni Group's third quarter presentation.

Our theme today is operational progress in a continued challenging market. We restored delivery stability and returned to organic growth, while logistics costs and weak European restaurant demand continued to affect profitability for the company.

Today, in the agenda, we'll cover the quarter's highlights, the logistics transition, and developments in our offering, followed by market conditions. We will also review group and business area performance, and will then discuss our strategy and targets, and then a detailed financial run-through and our priorities for the rest of the year before opening for questions at the end.

Q3, then, in brief. The quarter brought clear progress in delivery performance.

Organic sales growth reached 1.7%, supported by Australia and higher napkin volumes in Europe. Growth was 3%, including acquisitions and currency effects.

We have worked through the backlog during the summer, which supported sales as delivery capability improved then in the quarter. The quarter then carries cost for that we have two warehouse solutions, and distributions to customers remain less efficient than we want.

Higher fuel prices added pressure. Our direction remains unchanged.

We are completing the operational transition, while developing the offering and working on strengthening our market positions going forward. Looking into the main activities in this quarter, and of course, the most important change since the second quarter is the greater stability of our logistics operation.

By the end of July, we had cleared the back orders accumulated during the spring. The focus then shifted a bit towards delivery precision and improving the underlying logistics processes.

We'll come back to that during this. Postponing the transfers of German volumes in Q2 gave us a room to stabilize the operation.

During Q3, we are resuming that transfer, and we will complete remaining German volumes during fourth quarter before year-end. Then, of course, our service recovery and cost recovery follow a little bit different timelines here.

We have resolved the earlier delivery issues, but then, of course, dual warehouses arrangements and inefficient distribution still affect the income. Freight costs remain a priority to work with.

The freight costs are driven by that the utilization in the trucks are not 100% and the broader fuel prices pressure that we can see in the market continues. We expect the transition-related effects to decrease over the coming quarters.

Alongside this work, we continue the sales and administration efficiency program announced in Q2. Of course, our immediate priority is to complete the transfer now in a controlled way and improve efficiency without losing the delivery stability we have regained during the quarter.

Other key activities is that in Dining Solutions, we have pre-orders ahead of the Duni lighting solution platform, which was launched in 1st of October, and that indicates strong initial interest from restaurants and wholesalers across several European markets. These are of course early indication of interest rather than evidence of full quarter of launch sales, but that will come, of course.

Also the recently introduced Softex and Velvet products are also developed well in the south of Europe. Our concept Duniform brings together machines, packaging, and service with advisory support for customers, and large parts of the range transition to pure polypropylene monomaterial, improving recyclability and compatibility with existing recycling system, which is very important.

The new brand concept makes that integrated offer much clearer. The new PPWR-related requirements enter into force during the quarter, and we have prepared our operation and a full portfolio over several years to meeting this, which we are doing.

If we move on to the market development, and I think this is a picture we all have seen before. It's the German numbers, the German DEHOGA numbers, that shows that the market remains difficult, specially then for the food service restaurant, same picture as in the past quarters.

If we also look into a little bit into the other countries than Germany, it's a little bit the same trend. It is the full-service restaurants that continue to face pressure.

We see that the European food service traffic remains broadly flat in the countries. We have the summer here.

There is one area that actually are growing, it's the morning meal is actually gaining share globally. That's a maybe longer term trend we're seeing, but still a challenging market.

All right, if we look into the key financials for the group. Net sales reached 2 billion 3 million compared with 1972 million last year, and that is a 3% growth, and 1.7% was organic, and 0.3% came from acquisitions, and then 1.1% from currency.

At constant exchange rates, sales increased by 2%. The operating income was 133 million compared then versus last year with 168 million.

Of course, the higher sales therefore did not translate into the higher profitability, and as I said before, logistic and freight costs together with a little bit product mix explain the main pressure on the margins. If we look at a little bit into net sales and operating income in a little bit more detail for the group then, on sales, better delivery capability helped us clear the remaining back orders, and Australia continued to perform well, while European restaurant traffic remained weak and customers focused on controlling cost.

We see that, of course, the Middle East remained under pressure from the geopolitical situation and lower activity in the hotels and restaurants in that area. On income, the extended warehouse implementation then created costs, as mentioned before, for the dual solutions.

Freight costs also reflected both from fuel prices and less efficient distribution then. Savings program we have in Europe contributed positively and helped offset increased IT costs from ongoing investments, and Australia contributed positively, while Middle East then did the opposite for that operating income.

All in all, positive with organic growth in the quarter, and that we cleared the backlog, but freight inefficiency and higher fuel costs driving cost. Now I'm handing over to Magnus to go through a little bit the BAs.

Thank you for that, Robert, and good morning, everyone. As usual, I take you through the two business areas in a little bit more detail.

I start off with Dining Solutions. Net sales, as you can see, amounted to 1.2 billion, basically flat from last year.

Operating income declined from 140 million SEK to 92 million. That's a decrease of 48 million, and the operating margin came in at 7.5% compared to a strong 11.5% last year.

Dining Solutions carries the largest share of the logistic transition cost, and this is the main explanations for the decline. On the next slide, I will walk you through the main drivers here.

Starting with sales, improved delivery performance allowed us, as Robert said, to clear the remaining back orders from the second quarter, and we saw an increased napkin volumes in Europe measured in pallets, so that was actually slightly positive. However, part of this volume that reflects the catch-up from Q2, underlying demand from our brand and premium assortment remains soft.

We also saw at the end of the quarter once the backlog had been cleared. As Robert said, the market itself gives no support, and if you look on the numbers, as Robert showed, visits to the full-service restaurants in Germany are actually down 6.1% from January to August, that's the latest number, and that is equal to now being around -25% versus 2019 levels, quite significantly.

Restaurants continue to face a weak consumer demand and elevated costs for labor, food, and energy. Against this backdrop, private label demand remains strong as customers continue to focus on the cost control.

We are winning these volumes, but at a clearly lower margins than our branded products. Geographically, sales to Germany remained weak, while we generated growth in Italy, supported by our cooperation with SETI, that's an acquisition we did two years ago, and this illustrates the value of being a more balanced geographically and having a more balanced footprint.

Business in the Middle East continue to be negatively affected by the instability we all see. Turning to operating income, the decline of 48 million, as mentioned, is mainly explained by three factors.

First, as we have mentioned several times, logistic costs, double warehousing and inefficiencies in the transition, combined with elevated fuel prices, that has led to clearly higher warehousing and transport costs, and the majority sits here in Dining Solutions. Second, mix and price.

The shift within branded products towards value assortments, a higher share of lower-margin private label deals, and a higher customer rebates all put pressure on the gross margins. Third, Middle East, we see activity being at a distinctly lower level in this region.

There was also some commercial progress alongside these pressures. We secured several customer contracts in the core business, Softex and Velvick, as Robert mentioned.

The Duni lighting solution launch adds another element to the offering, and these developments supports the future business, while current financial priority remains restoring a better relationship between the sales, the product mix, and the cost base. If we summarize, delivery performance has somewhat normalized and volumes have recovered from a disrupted Q2.

The challenge remains that the share of branded sales, which together with the transition costs, explains why margins are well below our ambition. If we now move to Food Packaging Solutions, focusing on sustainable food packaging, there we see that the net sales increased to 860 million from 751 last year, that's an increase of 5.1% in comparable currencies.

We also see that operating income improved from 27 million to 41, and that's an increase in the margin from 3.7% to 5.0%. If we look a little bit more in details, growth was driven by Australia and our acquired companies.

In Europe, sales were broadly stable, with growth in Denmark and Norway were offsetting a weaker development in Germany. Duniform has been mentioned a couple of times lately, that's our all-in food packaging concept that continued to outperform the rest of the takeaway portfolio, supported by the development in machines.

We have services here and packaging solutions. During the quarter, Duniform also launched a brand-new concept and monomaterial solutions with improved recyclability, very important.

The improvement in operating income is mainly explained by gross margins, particularly in Europe, but also in BioPak Group continue to grow and improving their gross margins. You can also see that the freight costs was burdening, around 7 million only in Australia.

We also have higher indirect costs here. Lastly, with the new PPWR, the packaging waste regulation, these requirements coming into force, we are well prepared.

We have a portfolio that is predominantly fiber-based, and that is a structural advantage versus competitors when we see that the regulation tightens. If we just summarize quickly, food packaging showed a clear margin improvement versus last year.

Margins remain below our target, must be said, but the improvement is driven by gross margin rather than one-offs. I hand over back to Robert.

Thank you, Magnus. Yeah.

If we look at the next page, our strategic framework, then that remains unchanged. The quarter's activities is directly connected to this.

We're really proud of our new lighting platform and our Duniform development, and those will expand our customer offering. SETI, as Magnus mentioned, in Slovenia, supports the stronger presence in the southern Europe, while BioPak continues to strengthen its Australian position.

Completing the logistics transition and implementing then the efficiency program addresses operational performance. Of course, sustainability remains integral to that direction.

The targets cover circular input materials and emission, together with workplace safety and responsible supplier practices. These measures allow us then to follow progress beyond the financial results, of course.

If we're moving into our targets then, number of targets, and of course, we can see on sales growth and operating margin, we are a bit way off those, of course, as you all know, in the recent 12 months here. Really working on a lot of activities to strengthen that, of course.

If we look into climate target, there we already reached the target for the future and really had a good, good change since 2019. That was a bit of a short summary, and we're moving to the financials.

Thank you, Robert. If we dig into the numbers now and start by the income statement.

We saw that net sales increased by 3.1% in comparable currencies. Growth was 2%, which organic growth was 1.7%.

There you have the numbers. Operating income amounted to 133 million SEK compared to 168 million last year.

That's a decline of 35 million, and the operating margin was 6.5% compared to 8.5%. Again, to repeat ourselves a little bit, the main driver again is the logistics transition.

It had a cost impact of approximately 25 million SEK in the quarter: around 1/3 from double warehousing and around 2/3 from higher freight costs linked to the warehouse quality. In addition, price and input costs, mainly higher customer rebates and energy, as well as higher transportation costs driven by elevated fuel prices and tariffs, has reduced the gross profit.

Although pressure on the mix and increased input prices, gross profit was mainly negatively impacted by logistics, less so from other factors, because we have efficiency savings and good discipline in pricing, and that has mitigated some of these negative factors. Also mention that currency has contributed positively by around 10 million SEK.

All in all, gross margin declined to 22.3% from the relatively strong 25.2% last year. On indirect costs, our cost savings measures has contributed positively and more than offset inflation and higher IT costs in Europe.

The cost increase is thereby from Australia, but this also reflects a growing market. Total indirect costs as share of sales was slightly lower than last year, and that is important.

Restructuring costs of 21 million were charged in the quarter and are excluded from the operating income. Can also mention that financial net was -48 million compared to 14 million last year, mainly reflecting higher net debt and interest on lease liability related to the new setup we have.

Net income amounted to 32 million, and earnings per share were 70 öre compared to a little bit more than 2 kr last year. For the first nine months, net sales amounted to 5.6 billion SEK, down with roughly 100 million, and operating income to close to 300 million, also down by 100 million.

That corresponds to a margin of 5.3% versus 7.0%. If we look a little bit on the financials, in Dining Solutions, operating income for the first nine months amounted to 205 million SEK compared to 341 million last year, and that's a margin decline to 6.2% from close to 10%.

On a rolling 12-month basis, the margin is 7.5% compared to 10.1% for the full year 2025. It is a sharp decline, and it's concentrated in the second and third quarter, and it's mainly explained by the logistics transition and the weaker share of branded sales, not by a structural change in the business.

If we look at the Food Packaging Solutions, the trend is opposite. Operating income for the first nine months has increased to 92 million from 57, and the margin to 4.0% from 2.6%.

On a rolling 12-month basis, the margin is also 4.0% compared to 2.9% for the full year 2025, so that's also driven by a steady improvement in the gross margin. For the group, the rolling 12-month operating margin is 6.1% compared to 7.3%.

All right. For both business area, this is clearly below the 10% level we have.

In Dining Solutions, the gap is primarily about volumes, branded mix, and the temporary, I must say, transition costs. We know from experience that operational leverage supports margins clearly once the volumes recover.

In food packaging, the work is about continuing to safeguard our gross margins, scale the acquired businesses, and work with the cost base. If we now go over to the cash flow, just some words on that.

Operating cash flow was 44 million SEK compared to 229 million. Operating EBITDA declined to 175 million from 207 million, while capital expenditure was also clearly lower in the quarter, that's reflecting the stricter prioritization of investments we have now.

The main difference is working capital, which had a negative impact of 106 million compared to positive contribution last year. Accounts receivable has increased by 110 million, and that's reflecting higher sales towards the end of the quarter as back orders were cleared.

Inventory has increased by 55 million, partly value-driven by higher input prices. Reducing inventory is a clear priority now going forward.

Once the logistics setup has stabilized, and we expect working capital to be a source of cash in the fourth quarter, which is seasonally our strongest quarter for cash flow. Finally, the financial position.

Net debt amounted to 2.8 billion, and that's an increase versus 1.6 billion at year-end. Again, roughly 600 million of the increase is the lease liability related to our long-term logistics partnership.

This is not traditional interest-bearing bank debt, that should be considered when you look on the net debt in relation to other key numbers. The remainder reflects the dividend, acquisitions, and the weak cash flow during the first nine months.

Strengthening cash flow and reducing net debt is, of course, our top financial priority for the coming quarters. Thank you for listening.

I will now hand back to Robert for concluding remarks.

Thank you. Yeah.

Some summary here. We enter the final quarter then with a more stable logistics operation and with growth, selling more napkins, which is important for us, of course, in this market.

Looking at the profitability, that, of course, as we said here, remains under pressure from the logistics and freight costs, and a bit less favorable product mix, even if we're selling more napkins then. We expect the logistics transition costs to decrease gradually here.

Then, at the same time, we continue to develop the business, a lot of focus on the lighting launch, the Duniform broader offering, and our stronger southern European presence, and also, of course, continued growth in Australia to support that effort. Of course, all the changes we are doing in production, logistics, and with the portfolio should give us a stronger operational platform entering into 2027.

Of course, our focus is to convert that progress into more efficient operations and a better financial performance in the end. Thank you for listening in, and we welcome your questions.

Thank you.

Good morning, Robert and Magnus.

Good morning.

Morning. I had a question regarding the mix for the 25 million logistics cost, but you gave the split there, and as I understood or heard correctly, it was 1/3 due to double warehousing and 2/3 of higher freight cost.

What is the view on the higher freight cost going forward? Is this a level that will be consistent or will it come down over time?

It should come down, because today we have some inefficiencies when we load the trucks with where the fill rate, but also the cost for forwarders has been a bit higher than it should be, so that's something both those we are working on to take down.

Good. Thank you.

How large share of the Q3 sales is backlog catch-up, would you say? Just rough number.

It's always hard to say in a way, because some customers, yeah, order or maybe they order again and so on, it's a bit hard to say, but...

No, I would say a couple of percentages. It's a minor part.

It's an important part, but it helps the organic growth, to say. It supports that one.

Okay. Did end of Q3 showed any sign of customers trading back the mix?

Did you see anything or...

Question again?

Did you see anything that customers is trading back, going from private label to higher end at the end of the quarter?

You could say we are doing some campaigns here, big campaigns actually, and we see that we have 4,000 customers that maybe bought the product one, two years back, but haven't bought. We see that maybe 60% of those has bought back higher-quality products, and that could be actually if they're going from maybe just tissue two-ply to three-ply, but of course what we targeting at is that they're going into our main premium products like Dunisoft, Dunicel, in those sub-brands in a way.

We see that we get some traction with the end users and we're focusing a lot on Germany, of course, because there we get the traction. Let's say if we take the customers we approach, we have 60% success rate there, we see some good signs there.

When it turns, you should scale pretty fast, right?

A good momentum in the market supports premium brand sales, of course. A healthy industry wants to spend money on things that they think is good, and we know that they appreciate Duni's products, so that we're confident with should support with a better economic climate.

Yeah. Then

my next question is regarding the financial cost, it was 50 million in the quarter, up from 28 last quarter. What is driving the jump there?

I think there are a lot of different items, but I would say it's mainly two. Of course, we have higher debts now than compared to previous, and also the interest rates are slightly higher as well, and that's one.

The other one is the leasing, interest rates connected to leasing. I think those are the main two items.

Okay. Then my last question is regarding operating cash flow.

How fast do you think you will decrease the inventory levels to more a normal level? Would it take place in next quarter or will it take a couple of quarters?

I think there are two aspects in this. Normally, we see a seasonal decrease by the end of Q4 that we actually lower the inventories once the Christmas season is over.

That is something we should expect, and we always aim for. The other aspect is to see once we get stability, and more the processes is optimized, of course, there is room for improvement also on the inventory levels that should go down.

That's maybe a little bit longer, more of a not seasonal dependent, but an ambition to take down the inventory days for a longer period.

Okay. That helps a lot.

Thank you very much. That was all for me.

Thank you for the questions.

Thank you. We know it's a busy day today, a lot of reports.

Thank you for listening in, and see you in a couple of months. Thanks.

Bye-bye.