Rottneros AB (publ)

Thank you. Per Bjurbom is my name.

I'm CEO of Rottneros since mid-March. So this is then my first quarterly presentation for the company.

I would like to start with presenting some highlights for the quarter. EBITDA, minus SEK 36 million, and this is in parity with quarter 1 2025.

The results is affected by lower prices and weaker dollar. What is good now in the quarter is that wood 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 is a challenge to understand where -- 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, let's say, a very strong fixed cost program in place.

And we continue to work on cost and efficiency. Then I'm going to do a short recap of Rottneros.

And we are then driven by some trends. And here, we have 4 major trends that affects our business.

Electrification of society is really important. We have a strong position for this electrotechnical pulps.

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 health trends and personal hygiene is driving the consumption of pulp.

If you then look into what end-use areas we're active in, we have a strong foothold in electrotechnical papers. We have strong footholds in filter and cartonboard.

Then we also serve specialty paper producers and also we are in tissue and printing and writing and some fiber cement. 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 a pulp mill in Vallvik, pulp mill in Rottneros. We also have Rottneros Packaging in Kostrzyn.

And we also have our fiber supply companies within Nykvist Skogs and Rottneros Baltics. Some comments on the markets.

If you compare to -- 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 SEK is affected by a weaker dollar.

The global markets of stock levels of NBSK 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 SEK then on -- if you are positive, you see a little bit dip upwards here in the last point.

And also the CTMP price have kind of evened out here on a level that hopefully is the bottom. So next slide.

And if you then look on Rottneros' main markets in Europe and see how the consumption of how the 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 niche approach, where we have seen a more stability than other grades. If you then look on -- from a regional perspective, the demand compared to '25 has decreased by 2.6%.

And if you look on -- from a regional perspective, then Europe has the main impact on this decrease. If you look on North America, it's around 0.

And in China and Latin America, we had some growth. So -- and when you look on 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 a lot. 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 compare to the first quarter of 2025. This is the waterfall and where the differences come from.

And we're going from minus SEK 27 million to minus SEK 36 million. The biggest negative impact is from price and currency where currency is a big part of the minus SEK 51 million.

In the quarter, we started off by having a tough production due to the cold winter weather, and we did lose production tonnes. 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 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 SEK 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 SEK 10 million, which we didn't do this year.

We didn't sell any emission rights. So if we exclude those, we are on a very similar level.

But all in all, we ended up with minus SEK 36 million 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 have 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 SEK 75 million 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 by more than SEK 200 million our working capital.

So when we compare quarter-on-quarter or quarter 1 '25 to quarter 1 '26, we have SEK 280 million lower working capital, and we continue having that focus. We also focus on our investments.

During the quarter, we invested SEK 7 million, which is a very low number. In '25, we invested SEK 37 million in the quarter and SEK 166 million for the full year.

This year, we expect the investments to remain at approximately SEK 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 then, the markets are moving sideways. We are -- wood prices are coming down.

And as you saw in previous slides, this will have an impact on 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.

We are a bit careful with giving forecast, 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 Vallvik Mill, we have good availability of wood, and we also get a positive impact from the storm that was in December, Johannes, that means that there's additional wood available in that area.

Well, if we look at the U.S. 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. We -- if you see our annual report, we say that SEK 0.50 to the dollar will affect our profitability with SEK 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 SEK 51 million that I showed earlier, a big part was currency.

Now we have seen that the currency has improved. We are more on an average of 9.2, 9.3, and that is, of course, improving the situation.

The main impact came from currency, market prices, but also production. We had a very good production year last year and Vallvik 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 realize we had a very cold winter in January, February, which did affect us negatively with some -- with several smaller problems in Vallvik Mill where we lost tonnage and that also impacts our profitability.

Yes. The strategy for CTMP is that we are very diligent on what orders we are taking in 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 2 measures are the key measures to handle the situation. We also are very diligent on what kind of orders we accept.

I do not...

It was before you started even...

Yes. But it's -- can it be like 2,000 or 3,000 tonnes of pulp that was not produced during this time?

A bit more, yes.

Even a bit more, yes. And the issue is when it's cold, it's more difficult to run these pulp mills.

Do you have a correct figure for that?

It depends on what you compare to, but it's approximately 5,000 tonnes that was lost in Vallvik compared to budget or previous year. And it's several smaller things.

And -- but when it's cold and ice, you don't get the same efficiencies in the operations.

So we are in a process now to identify items that will be -- that affects these different line items in the P&L. And this can be of, say, very different kind of things.

And the key thing here is to identify these things, evaluate them and see what kind of impact this will give on the P&L and take -- you can kind of -- we can line up very many different things, but focus on the ones that gives 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 organized in the right way.

So we will run a structured, let's say, program approach to deal with this. And hopefully, this will give effect in the P&L going forward.

Difficult to give any amount so to say, but it will improve the company.

Yes. Thank you for listening in here, and this was my first quarterly report.

And hopefully, it will go better the next time. So thank you.