Thank you. Yes, hi and welcome to the interim report for Q1 2026, and the headline for this quarter is stabilized development in a challenging market.

If we look a little bit on the agenda here during the presentation, a little bit highlights in the beginning, and then some market outlook and market insights. Then we have the Q1 summary, and then we're moving into more details within the two business areas.

Then at the end, financials and our long-term targets at the end. Then a summary, and then to Q&A via telephone.

All right. If we move into the highlights, the quarter came in, the net sales is broadly in line with last year if you look at the same currency as as last year.

That is, of course, it's been a quite challenging and volatile market environment here lately as well, as we know. If we look at the organic sales trend, that improved quarter-on-quarter.

We'll come back to that, but it was -7% last quarter, now it's improved, even if it's a little bit negative still. There is a price-focused demand continuing in the market, with the mix rather than volumes being the main challenge for us in the restaurant market.

Then positive in the quarter was Food Packaging Solutions supported more balanced performance this quarter, and coming back to that as well. If we look a little bit on the market, of course, the market remains subdued across the HoReCa sector, especially if we look at Germany as we we we looked at and the the data from Germany on the top there.

Then yeah, lately here, I think yesterday was published the consumer confidence here, and it drops significantly in in the bottom right here in in in March because, of course, of the Iran war. Of course, real revenues continue to decline in market and extending this multi-year downturn that we had.

Of course, cost and inflation is a pressure for the market, and and especially in labor. There is a purchasing behavior stays a bit cautious, with a lot of focus, of course, on cost and efficiency all over the market.

If we look a little bit on the higher level here, the European food service market, how that looks now, and then the projections for 2026, is that the visits have continued to further decreasing in the market. 2025 was actually down, and predicted maybe when we went into 2025 that it was supposed to increase.

It's still very low if you compare to the pre-COVID. These two slides then is the five big markets in in Europe, and there are some other markets, of course, in Northern Europe here that are has come back better actually than the the top five countries in Europe.

If we go into the main growth drivers in Europe at the moment is that, of course, delivery offers is is one part where it's driving growth area. Then, of course, digital ordering is is a big thing as well and how you order and and the behavior around that.

When it comes a little bit to food and so on, health indulgence is a is a big trend as well. We also see that breakfast is is growing in many parts of of Europe and bakeries and so on.

Of course, it's a lot of focus on price, value, and promos in general in in the HoReCa sector. Then one thing that is very important now is socializing experience when you go out and eat.

It's more maybe about that than actually about the food in a way. Getting to socialize, getting atmosphere.

I think here, Duni can offer a lot of things in the different areas. Delivery, we have our packaging part, and especially Duniform part.

We'll come back a little bit what we've done there. Of course, the socializing part at the end there, that is where we actually are our core, where we create atmosphere with our our napkins and and table covers and and lights in the restaurants, and and also, of course, in all areas of the HoReCa sector.

All right. Top line here then, Q1 financial.

If we look at the total net sales then, amounted 1.764 billion SEK, which was lower than the last year, but in line if you look at the same currency. Operating income, 10 million less than last year, and operating margin 5.7%, which is 0.2% lower than last year.

The main things here then, if we comment on the net sales, I think it's important then to look at the in fixed currencies, of course. It's a lot of currencies going up and down here in in in the world.

There we are in line with last year, so that's positive then versus last quarter, where we were down. Organic growth then was also a positive trend compared to Q4 then.

We have a negative mix effect in Dining Solutions, where we we have selling less premium napkins, demand for that at the moment, but still selling a lot of premium products and and our main products like DuniSoft and Dunilin are the main ones there that we're really focusing on there. Of course, the Middle East instability affected Dining Solutions a lot in the quarter as well.

We'll come back to that in a minute here. Food Packaging Solutions, sustained growth in local currency this this quarter, which was positive.

The operating income declined with 10 million as as I said, mainly because of unfavorable mix, but also result from a little bit demand and from lower-price products. Of course, also affected the sales was the geopolitical tensions outside, and especially then the Middle East here and and Asia, where we have some business.

The cost development through the quarter, we have done some, which we announced last year, cost reduction initiatives that helped us during this, but we got some higher cost in energy, logistics, and IT cost during the quarter. Of course, there's a lot of currency fluctuations, and that was positive impact of 5 million compared to last year.

That was a little bit high level, and we might as well move into Dining Solutions.

Thank you for that, Robert, and good morning, everyone. As usual, I start with a more detailed review of our two business areas and starting off with Dining Solutions.

Sales declined by 68 million, mainly driven by currency effects, but also a continued weak HoReCa market. Operating profit decreased from 102 million to 82 million, a decline of 20 million.

This is mainly explained by the negative mix effect, which I will come back to shortly. In addition, we also experienced cost pressure on variable cost like energy and logistics during the quarter.

As a result, the operating margin declined to 7.8% compared to 9.1% last year. If we jump to the next one, in comparable exchange rates, sales declined by roughly 1%.

We do not yet have full market statistics for Q1, but our assessment is that this performance is broadly in line with the HoReCa market overall. If we look on the volumes, measured in pallets and pieces, we actually see a positive development.

This allows us to conclude that in several segments, we are actually flat or even gaining market share. However, the challenge is clearly the sales mix, as mentioned already.

We are losing share in branded, premium products, which carry higher margins, while gaining volume in private label and commodity products with significantly lower gross margins. Regarding Germany and the reduced VAT for restaurants, we mentioned that before, we do not yet see any clear trend shift in visits to full-service restaurants.

Anyhow, such measures are important to support fundamentals and make eating out more affordable. It is a fact that inflation over the recent years has been significantly higher for restaurants than for consumers in general.

As Robert mentioned, geopolitical uncertainty remains very high. Consumer confidence is still at historical low levels, you maybe saw that on the previous slide, and cautious continues to dominate spending behavior.

This is not yet supporting a recovery unfortunately in the HoReCa segment. Against this backdrop, we have increased our initiatives and adapted to the new reality with customers having less financial room.

During the quarter, we launched mid-segment offerings in napkins and table covers, Softik and Velvet, that provides smart value for effortless, professional table settings. It's still a bit early days, but the reception from the industry has so far been positive, and these products will play an important role in protecting sales momentum during these challenging times.

Over the last year, we have also worked hard to increase efficiency and reduce cost, both back end and front end. Despite having fewer resources in the field, we have increased end-customer visits by 27% year-on-year.

This is, of course, an very important leading indicator for long-term growth and supports the loyalty among restaurants and hotels. The result decline of 20 million, try to summarize, is mainly explained by three factors.

First, the negative mix effect, that is the most dominating one, we mentioned that. This is a challenge in tough times, but we firmly believe that customers value what our brand stands for and the role we play in creating atmosphere around eating and drinking and, not least, our initiatives in sustainability solutions.

We are well-positioned. However, our focus is not to wait for better times, but to actively shift this curve already now.

Second, we saw clear cost pressure, mainly related to energy and logistics, partly driven by the geopolitical disturbances. Finally, third point, we had a positive currency effect versus last year that supported the result, but not enough to offset the weak markets and the lower share of premium sales.

To summarize Q1, a recovery in organic growth compared to a weak Q4, must say, but the key challenge remains the declining share of branded sales, which continues to pressure gross margins. Positively, again, we are growing in pieces sold, indicating that we are defending, and in some cases, growing our market share despite severe headwinds.

Moving over to Food Packaging Solutions, focusing on sustainable food packaging. Sales declined by 4%, that is fully driven by negative currency effects.

In comparable currencies, actually a slight increase. Operating profit improved from last year, increasing from 7 to 18 million, and that corresponds to a margin of 2.5%.

As mentioned, currency is the main driver on sales. It's been also quite volatile period for currencies lately.

This primarily is to the stronger SEK versus the euro, but also versus the Australian dollar, which averaged in Q1 this year 6.35 compared to 6.90 last year. At the same time, the Australian dollar has strengthened versus the US dollar, which has supported the gross profit in Australia.

Inventory levels, always very important, are now significantly more optimized compared to a year ago. I think diligent work in the last nine months or so has reduced the storage cost, especially in markets outside Europe.

This remains a key focus area and given the continued supply chain uncertainty driven by the geopolitical situation. We experience a notable cost pressure in logistics and oil and gas-related inputs linked to the situation in Middle East, of course.

Price compensation measures have been initiated, although the short-term impact is more pronounced in food packaging, particularly so in Europe, where plastic products are still part of our portfolio. A positive aspect of this is that the vast majority of our products, and especially so outside Europe, are fiber-based.

These products have historically been more expensive than plastic alternatives, and this now creates an opportunity to accelerate the shift towards fiber solutions. Experience from previous crises shows that close customer dialogue and reliable delivery are critical to gain market share and staying ahead of smaller and more opportunistic competitors, which, of course, will always be there.

Our recent strategic focused acquisitions, Linpac in Europe, in Finland, and BioPak in Australia, continue to develop well and strengthen the overall offer. In Q1 this year, we also signed the acquisition of Silsor.

That's a small acquisition, around 50 million or so in revenue, but that has a very meaningful impact on Duniform offering in Sweden, but also in the Nordics. Duniform is Duni Group's sustainable food packaging concept.

The integration will start 1st of April for Silsor. We continue to see foreign exchange volatility.

While we see a stronger Australian dollar that supports the gross profit, we also saw some negative revaluation effects in BioPak Group during the quarter. Long term, a strong Australian dollar versus the US dollar is positive, just to be clear.

To summarize, Q1 is a seasonally weak one and margins remain below normalized levels. However, as shown by the rolling 12-month trend to the right, profitability has slowly, but steadily improved since Q2 last year.

If we now jump in a little bit more to the financials, starting off with the income statement. As mentioned, we have FX effects that reduced the sales by almost 5% in the quarter.

Organic growth improved significantly from the weak previous quarter, now close to zero, -1%. Although we are defending our market position by offering more affordable alternatives, the negative mix effect, and we've said that a couple of times now, continues to put pressure on the profitability.

Gross margin remains resilient, and that is supported by dedicated cost reduction initiatives that we have done, especially so in our production facilities, but also in the front end. Also, price compensation measures were implemented, or at least initiated, to mitigate these costs increases seen, especially so in the second half of the first quarter.

As communicated earlier, we are seeing higher costs also related to digital investments that includes an ERP replacement project. Adjusted for the inflation and higher IT costs, that is roughly 20 million a quarter, all in all, we also taken out costs of almost the same, and that is in line with our previous guidance.

Financial net last year was positively impacted by currency translation effects, and therefore was exceptionally low. This year, we also have an effect on interest rate from the leasing contract in our new warehouse, explaining the main difference we see now between '26 and '25.

If we jump to the business areas financials, Dining Solutions, if you look on the last 12 months, just below 10% margin, which is, you could say, relatively strength given the market environment. Food packaging improved slightly to 3.3%, looking on the rolling 12 months again.

I would say both business area remain 3% to 4% below targeted levels, primarily due to the low volumes and pressure on the branded sales. That's more so than the structurally weak gross margins or any excessive indirect costs.

With improved volumes, we know from experience that operational leverage will support margins going forward. Indirect costs are therefore adapted to the pressure on sales levels.

During the last year, we have reduced the cost, particularly so in sales and marketing and in production. If we look on the operating cash flow, it's typically negative in Q1, also this year, in line with prior years.

However, there are some slightly differences. Inventory increased significantly last year, as you can see, particularly so in BioPak Group in Australia, and that had negatively impacted both cash flow, but also the profit we worked hard to reduce in 2025.

In Q1 this year, inventory development improved clearly, with only a normal seasonal increase. The negative deviation mainly reflects lower accounts payable, that is partly a timing effect, partly lower purchase volumes.

Moving on to the financial position. I would say the prolonged recession and industry challenges over the last 2, 2.5 years, that's started to reflect a little bit in our financial position.

Working capital remains stable, both in value and in days. Net debt has increased versus year-end, and that is fully explained by our long-term logistic partnership and the related lease liability we have of approximately 600 million.

This is not an increase in traditional interest-bearing debt, and does not influence the covenant, just to be clear. The solution secures our deliver performance with this warehouse for many years.

As stated earlier, we expect to generate annual savings of around 35 to 45 million starting at the end of 2026, once the warehouse reallocation from Bramsche, where it is now, to Meppen is completed, and stabilized, I would say. Finally, we have reached the slide to the group targets.

As previously communicated, we have updated our both financial and sustainability targets effective from 1st of January. We now target total growth above 6% in comparable currencies.

Currently, we are below this level, as you can see, mainly due to the weak HoReCa market. M&A has contributed until quite recently, but had a marginal impact in the quarter.

The operating margin closed at 7.3%, stable, I would say, versus last quarter or quarters. As also you can see, it is below our 10% target.

The board proposes a dividend of 5 SEK per share, that's unchanged from last year, and corresponds to a payout ratio of 75%, and that is above our target of 50%. We also have updated our sustainability targets to 2030 to lead and secure our role as being the trusted sustainability leader.

First, we should have at least 90% share of circular input materials, renewable or recycled, and that ended on 87% of the first quarter. Second, our way to net zero should be reduced by 57% versus 2019, here we ended at -58%.

Third one, we should be a great and safe place to work in, and we measure this by be below 10 lost-time injuries per 1,000 employees, here we ended at 16. We continue to invest heavily in our production to ensure we gradually reach our targets.

Finally, supplier responsibility, 100% should have signed Duni Group's business partner code of conduct by 2030, and here we are at 83%, and we work diligently to reach that. Thank you for listening, and I will now hand over to Robert for his concluding remarks.

Thank you, Magnus. A little bit final remarks here.

There are two topics, of course, our net sales, and trends there and what we're doing there. I think, as Magnus mentioned a bit, we have been really focusing on transforming our go-to-market model in terms of the both marketing and the sales force, and done a big job during last year, and that is starting now to getting place.

As Magnus mentioned, we get more visits, plus 27%. Also, in order to drive more growth and find new type of segments and customers, is that we're launching a mid-segment table cover and napkin assortment for especially the south part of Europe in order to hit those type of trends in those restaurants and segments.

If we look at the profitability, there, of course, we working a lot now with quite a big change here in the years with the whole logistic move, of course, that's a big thing, and also internally on IT and so on in order to be more efficient going forward in both the end of '26 and '27 here. Also looking into, I think, food packaging, good turn around in the quarter, and it's a very good and important balance for Duni, if you compare to many years ago actually, that we have two business area that actually complement each other, and also that packaging actually, yeah, taps into megatrends in the society, especially with Duniform here that we are investing in and see a good momentum in.

That was a little bit short summary and recap. Now we move over to questions.

Thank you.

Hi there. Thanks.

Erik Sandstedt here with Kepler Cheuvreux. A few questions, please.

Want to start off with the organic sales growth and how we should think about that relating to margins. Organic sales growth is improving in the quarter, but it's still negative.

Do you think you can improve operating margins this year even if organic sales growth were to be negative?

I can start here. It's, of course, a bit of a hard question depending on the mix how we sell, and, of course, it's important for us to sell Dunilin and DuniSoft, which are the premium, in order to reach the margin actually.

Because if we sell then let's say 1-ply, 2-ply, 3-ply napkins, then, of course, that's a lower value on those. That could be tough.

I think, as I said, with the sales force, everything is focused on driving the premium and which is the core.

Yeah. I'm a bit curious how much pricing power you have now given the pretty tough consumer backdrop and the fact that consumers are trading down.

Can you still raise prices on your premium products, or is there a risk that that kind of reaccelerate the trend towards cheaper products?

I think it's always a risk, of course, especially with the restaurant situation. I think certain prices when you see now inflation coming in and so on, it's a little bit easier maybe to adapt to that.

I think going back a little bit to the napkin's role in the restaurant, it's a very little part of the whole expenses in a way. Of course, when restaurants are under pressure, it's tougher.

I think that speaks for it that we can actually take out the increased inflation on the premium. Also, it's important for us to actually charge the right price, of course, on the lower products.

That's an important part.

Yeah. No, makes sense.

On that topic, and on the back of your comments that you see consumers trading down to cheaper products, does that mean they are not willing to pay a premium for sustainable products either? I'm thinking a little bit about the upcoming PPWR regulation and whether this can be a competitive advantage for you and how to think about the price proposition in relation to that regulation.

I think that's a two-edged sword here in a way because I think if you look at all the research and we got data here that the willingness to pay isn't really there actually. I think it's 2% are choosing restaurants because of only sustainability.

It's a kind of tough measure so in a way. It's a very low number of people actually, yeah, choosing the restaurant for that.

On the other hand, I think as you're on to, with all regulations coming in, I think we are ahead there. I think that's very important, and we are long-term ahead, I would say.

What we done with the airlaid now moving into this bio-binder, I think that's something that is really important, and we were the first one in the world with that. PFAS on packaging, we were also the first.

We moved early there, and then you can say, yeah, why were we early, but I think, yeah, we moved because we know that regulation would come in a way. I think, yeah, long term, that will be a winner.

I'm definitely sure of that. Short term, of course, the pressure on restaurants, yeah, they're looking into, yeah, everything they can cut from meat or detergent in the dishwasher, everything, they look into everything.

If the restaurants now hopefully, like in Germany, if they get a little bit better maybe financial with the VAT, maybe if that moves, we haven't seen that yet, but if that comes, of course, they get a little bit more, and maybe the napkin is a very small part of it. That could actually make a change in the restaurant if you have a little bit creating atmosphere, and that's one of the things we've seen in the research also, that atmosphere is important for the restaurants because people come there to socialize maybe more than eat nowadays actually.

That part we are really onto, and I think we also putting a lot of efforts into lights now, and especially LED light, and that is also something we see a big potential here in long term because you can see that when you're out now, atmosphere is so important for the restaurants to actually get people in. A long answer here, but yeah.

No, but that's great. That's helpful.

Then also, maybe I came on the call a little bit late, maybe you have talked about this already, but how should we think about higher input costs on the back of the high oil price and geopolitical tensions and so forth? Is that impacting you, and if so, can you offset it through efficiency measures or pricing?

Yes, hi, Erik. It is impacting us.

We see all that in the second part of the quarter, especially from the forwarders, logistics costs, but also on the energy. Of course, it's very uncertain how it will play out, but as Robert was into, I think the cost increase is there, it's visible, we are taking initiatives.

The mindset for the customers to accept this, they also read the newspapers, I think is better when you have these clear signals to adapt and to also accept certain price compensation measures. Energy, logistics, some parts of our products also indirectly impacted that we source from Asia.

That is one part. The other part is if we see disturbances in the supply chain.

We haven't seen that so far yet, but that's also a risk blocking certain routes in the world. That can also have an impact.

Sure. Just finally from me, I think you mentioned it towards the end of the call here, but the financial expenses, did I understand it correctly that there was a leasing impact on the financial cost in the quarter, or basically my question is more what's a normalized kind of cost of debt for you right now?

That's correct. If you compare to last year, the last year was very low for certain positive revaluation effects.

I think it's fair, everything else the same, that this leasing impact is around 7 million per quarter just to give you an idea higher. It's not that big difference we should expect going forward.

Of course, then there are a lot of component in that financial net, it can, of course, move up and down going forward as well.

But 7 million in leases in this quarter.

Correct. Also going forward.

Perfect. Thank you so much.

Thank you.

Yes, hi, good morning, guys. Thank you for taking my question.

I apologize if the question has been answered during the call, I was a bit late here, but just trying to understand the dynamics here, and especially the discrepancy between gross margins and operating margins. Gross margins were stable, volumes were roughly flat, but still the operating margin was down significantly.

Could you just explain the dynamics here and also what needs to happen for the operating margin to improve in 2026? Thank you.

As I understand, hi, Johan, as I understand the question, the difference between the gross margin and the operating margin, which declined slightly, the operating margin in the quarter. Yes, we have taken out costs.

That should contribute and it is, especially so in production, that impacts gross profit, you won't see it there, but sales and marketing is impacting positively on the indirect cost, the difference between gross margin and operating margin. However, we have taken some costs, some are mainly related to IT, the change in ERP system, and digital solutions there.

Some of them are temporary in '26, part in '27, should be reduced going forward. We also have some other costs we've seen related to M&A and so on.

That's explain a little bit the dynamics in the indirect cost. We both positive and negative impacts in the quarter.

Just so I get this straight, sales mix was negative, you're losing share in brand products, which I assume have higher gross margins, but still gross margins are relatively stable while you're gaining volume in sort of private label and commodity products. Wouldn't that sort of be beneficial for operational leverage in Dining Solution or am I getting this wrong?

No, I think, as you say, the gross margins are relatively stable, although we have a severe negative impacts selling less brand sales. The reason why it is stable is the hard work we're taking out costs, especially so in production, and that supports the gross margin.

In order from a sales perspective improve the gross margin, then, of course, we need higher share of brand sales. It's protected, the gross margin is protected by very much cost out.

Got it. Thank you so much for taking my questions.

Thank you.

Thank you for listening in and great questions. Thank you.

We'll see you in the next quarter. Thank you.

Bye-bye.