Welcome to this second quarter presentation for Borgestad ASA. First, let's take an introduction.

With me today, I have CEO of Höganäs Borgestad Group, Bendik Persch Andersen. My name is Pål Finborud.

I'm the CEO of Borgestad ASA. Before we start, I would like to inform that we have a Q&A session after the presentation.

You may send your questions through the chat function. Let's go into some highlights and key figures.

It's a pleasure to report a very positive second quarter for Borgestad. For second quarter '26, Borgestad Group delivered an EBIT of NOK 42 million, compared to adjusted NOK 28 million in second quarter 2025.

For first half '26, revenues ended at 512 million compared to NOK 523 million for first half 2026, EBITDA at NOK 49 compared to adjusted 38 million for first half '26. First half of 2026 continued to be characterized by uncertainty across global industrial markets.

Geopolitical developments, volatile energy markets, trade-related uncertainties, and cautious investment climate have contributed to low activity levels in several industrial segments. Although industrial customers remain prudent in their investment decisions, maintenance and operational requirements continue to be critical.

Industrial facilities must maintain production regardless of economic cycles, supporting an underlying demand for refractory products and services. For Höganäs Borgestad, market conditions across the Nordic region remain challenging.

Several customer segments continue to experience pressure from both international market developments and regional factors, including high energy costs and increased competition. At the same time, the group benefits from its strong market position, broad customer base, and long-standing relationship within critical industrial sectors.

The essential nature of refractory solutions in industrial production provides a resilient foundation for the business even during periods of low economic activity. Despite the uncertain market environment, Höganäs Borgestad continues to demonstrate solid operational performances.

During the year, the group has continued implementing initiatives aimed at strengthening governance, improving project execution, cost discipline, and further professionalizing the organization. These measures are designed to improve profitability, increase resilience, and position the business for continued value creation over long term.

Agora Bytom has continued its positive development during this period. The shopping center has achieved its highest occupancy rate ever at 97.4%, reflecting the attractiveness of the property and the strengthening of its tenant mix.

At the same time, the total leasable area within the center is higher than at any other period in the history, making the achievement particularly noteworthy. This development demonstrates the continued attractiveness of Agora Bytom as a commercial destination, and provides a strong foundation for future cash flow growth and value creation.

Interest-bearing debt decreases per end of June '26 compared to same date in '25, and Borgestad remains solid and fully financed. Before we go into details, we'll start with a brief introduction of Borgestad to those who are not familiar with what we are and what we do.

Borgestad is a company with a lot of history with industrial and shipping roots dating back to the early 1900s. Over the years, we have now evolved into an industrial investment company currently invested in commercial real estate and refractory industry.

Our current main priority is to improve and maximize the value of existing holdings. Looking ahead, we aim to take positions in niche segments with consolidation potential where we see that we can make a difference.

Our current portfolio consists of two key assets: Agora Bytom, a fully owned shopping center; and the refractory supplier Höganäs Borgestad, in which we hold a 69.7% ownership in. Let's go into details for Agora Bytom.

Agora Bytom is reporting a weaker quarter than previous year with a decrease in revenue by 5%. The revenue and EBITDA decrease is mainly due to ongoing changes within the center due to tenant changes and currency effect.

The currency effect is due to stronger NOK against euro in first half of '26 compared to same period last year. Agora Bytom has a positive momentum in signing leases and had by end of second quarter '26 an occupancy rate of 97.4%.

As part of the increase in occupancy, also total area for commercial square meters is increased by converting common areas to leasable areas. The occupancy level is the highest ever achieved for Agora Bytom.

The new tenants will open during second half of 2026, and mostly in beginning of fourth quarter. New leases is expected to have full effect from 2027 and onwards.

As stated before, going forward, Borgestad will focus on increasing rent levels and by replacing tenants with low rent levels. At end of June 2026, debt stands at €28.5 million, maintaining a substantial financial position.

As before, due date for the debt is 31st of December 2028. Tenant turnover at Agora Bytom decreased by 2.4% in second quarter 2026 compared to the same period in '25.

Number of visitors is stable in the same period. It's estimated that the decrease in turnover among the tenants is due to changes among tenants in first and second quarter.

The trend month-by-month is increasing, especially in second quarter. Agora Bytom benefits from a diverse tenant base and a healthy weighted average unexpired lease term of about 4 years, ensuring low contract duration risk and high visibility for years ahead.

The WAULT has been relatively stable over a longer period, a result of a combination of new leases and renewal of existing leases as we go on. Contract duration are well spread over time with first due date for top tenants in first quarter 2028.

More than 58% of the contracts measured by number of square meters is due in 2030 or later. This is a good position for Agora Bytom.

As communicated before, local management is actively engaged in ongoing negotiations with both existing and potential new tenants to further strengthen the tenant mix and stabilize occupancy levels going forward. Let's go into your part for Höganäs Borgestad, Bendik.

Thank you, Pål. As Pål said, it's a pleasure reporting the figures for the second quarter also for Höganäs Borgestad.

Despite revenues coming slightly down from 296 in last year's second quarter to 290 million this quarter, EBIT improved significantly from 22.3 in the second quarter '25 to 36.8 million in this year's second quarter. This improvement reflects the positive impact of cost-reduction measures, improved operational efficiency, and ongoing internal improvement initiatives, but also the fact that we concluded several successful projects in the quarter thanks to great project management and efforts by everyone involved.

Market conditions remained challenging through the quarter, as Pål mentioned, with continued uncertainty across several industrial segments, affecting customer activity, production levels, and investment decisions. While overall demand remain below historical levels, there are early signs that activity is gradually improving in certain segments after an extended period in which customers have delayed investment decisions.

Although a full market recovery is not expected in the near term, the medium-term outlook suggests a positive development going forward. The quarter also demonstrates that many of the measures that were initiated over the past few years are delivering results.

While further measures definitely remain necessary, profitability has developed favorably, and we maintain a positive outlook. That said, our quarterly results are naturally affected by the timing and execution of individual projects, and we do not expect a quarter-on-quarter improvement continuously.

However, we remain focused on what's within our control and believe that the implemented and also planned measures are moving the business in the right direction, supporting a positive underlying trend. As highlighted in previous presentation, the Nordic refractory market is highly seasonal, with activity typically concentrated around the second and third quarter as customers carry out planned maintenance during the summer period.

Historically, Q2 and Q3 accounted for 26 and 31% of annual revenue, respectively, while activity levels are generally lower in Q1 and Q4. Given the high operational leverage of our business, this is clearly affecting the quarterly results.

Following a very good second half of '25, we entered '26 with a weaker-than-normal first quarter, reflecting both the challenging market conditions, but also internal project issues described in the first quarter presentation. As highlighted in the previous slides, performance improved significantly in the second quarter.

It's also important to remember that our business has relatively long lead times, often 6 to 12 months or even years from initial discussions with customers to project execution. As a result, many of the implemented and ongoing commercial efforts are expected to have an increasing impact as we move through '26, '27, and '28.

Looking at our trailing 12 months performance, the adjusted EBIT margin has improved to 7%, compared to 5.6 at the end of first quarter and 6.2 for full year 2025. Looking ahead, our priorities remain unchanged: delivering sustainable revenue growth, improving capital efficiency, and realizing the benefits of closer across-group collaboration.

While quarterly performance will continue to be influenced by the project timing, we remain committed to our mid-term ambition of EBIT margin of 10%. Finally, a brief update on the Bjuv sale-leaseback process, as there have been no material developments since our Q1 presentation.

The transaction therefore remains subject to the legal review ongoing. We remain confident about the underlying merits of the transaction and continue to view the sale-leaseback as an important step in creating flexibility for the group's long-term development.

Once the legal process is concluded, which we do expect to be in the near future, we will be in a position to move forward with the next phase of planning for future production.

Tuning into the financials and starting with the P&L for Borgestad Group, revenue decreased by 2.1% in second quarter 2026, but the positive news is that EBIT in second quarter ended at 42.4 million compared to adjusted EBIT at 27.8 in second quarter 2025, reflecting improved profitability within Höganäs Group. EBIT in first half 2026 ended at NOK 24.9 compared to adjusted first half '25 at 19.5 million.

Included in the EBIT in first half '26, a write-down of fixed assets in connection with a tenant change in Agora Bytom is included. Net financials are stable year-over-year, both for the quarter and year-to-date.

Looking at the balance sheet, working capital stands at 263 million compared to 321.1 as of June 30th, 2025, mainly driven by decreased trade receivables and inventory within Höganäs Borgestad. It's positive to review a decreased working capital compared to last year.

Decreasing working capital is a priority within the group and especially within Höganäs Borgestad. Per June 30th, total interest-bearing debt stood at 494.4 million, while net interest-bearing debt was at 374.6.

The property in Bjuv remains classified as held for sale pending the expected court decision in near-term future, as Bendik communicated. Of course, we expect a positive feedback, and that the transaction is closed in 2026, but that is conditional of a positive Supreme Court decision.

Net cash flow from operating activities for the period was negative with 4.6 million, compared to a negative 92.7 the same period last year. The positive change is mainly driven by decreased working capital and better operational performances.

Cash flow from investment activities was NOK negative with 16.6 million and is still a 50/50 split between investments in Agora Bytom and Höganäs Borgestad. Net cash flow from financial activities is negative with 11.6 million, compared to positive 14.7 year-to-date in '25.

The main difference is the utilization of overdraft that is lower at the end of first half. Per June 30th, available liquidity stood at 144.8 million, including a 36.4 million undrawn credit facility, meaning that Borgestad has a good liquidity situation.

Borgestad remains confident in long-term prospects of the assets. In addition to continuing the operational development of Höganäs Borgestad and Agora Bytom, the group will actively evaluate consolidation opportunities within the refractory sector.

Borgestad believes that selective acquisitions may strengthen market positions, expand capabilities, increase scale, and contribute to long-term shareholder value creation. The fragmented nature of parts of the refractory market may present attractive opportunities for strategic growth through consolidation.

Borgestad remains committed to executing its strategy for both Höganäs Borgestad and Agora Bytom, which holds strong market positions in their local markets. The group's ongoing focus is on improving profitability and strengthen operational performances.

We will also inform that from third quarter '26, Borgestad will change reporting format and only publish group reporting group presentation and not financial statements, except for second quarter. This is in line with market trends and practice.

Let's head over to questions.

Yep. We have three questions so far, starting with a question regarding Agora Bytom: "When are the tenant transitions and temporary discounts at Agora Bytom expected to be completed?

What rental income effect should we see once the new tenants open in second half?"

The tenant transitions will probably be finalized as communicated in first part of fourth quarter, and we will see the full effect from January '27 and onwards, first quarter '27. At the same time, the discounts for those who are in transition or will be influenced by the changes are due, but it will always be some parts of the tenants that has separate discounts.

What kind of revenue increase we will review is nothing that we will go out with public.

Next question regarding Höganäs Borgestad: "You reported a 12.6% higher backlog and early signs of improving activity, while at the same time stating that the market conditions remain challenging, and that a full recovery is not expected in the near term. What separates the segments where you see improvements from those still lagging, and has the improvement continued into the start of Q3?"

Starting with the segment split, I would say that we see a clear difference across the three Nordic countries in which we are present. In Norway, we aluminum and ferroalloy is the two main largest segments.

Aluminum has been in a low cycle for our part as the aluminum prices have been skyrocketing and the production at all aluminum plants have been peaking, and therefore, they have also, due to the high aluminum prices, they have also postponed maintenance projects. On the other hand, for ferroalloy segments, most plants in Norway were shut down temporarily through February, March, and partly April due to the imposed tariffs on ferroalloys to the EU and the high electricity prices.

In Norway, we have had definitely a lower activity, but not for the same reason across aluminum and ferroalloys. In Sweden and Finland, on the other hand, where steel, pulp and paper, and waste and energy is more leading for our part, there's been a generally lower activity, and maintenance, in general, has been postponed.

If you look at all the work that we are conducting, you could split it into three parts: so one being daily maintenance and material consumption, consumption of refractory materials; the other being operational required maintenance to keep the factory running; and the third being larger upgrades and larger investment projects. For even in a low cycle, the daily maintenance and partly also operational required upgrades will always be done.

What we have seen through '25 and also parts of '26 is that the daily maintenance and refractory consumption has been rather stable, whereas the operational required upgrades have also been postponed. We now see somewhat of a catch-up effect on that.

What we mean by that we don't expect a full recovery in the near term is that we still see that larger upgrade projects, which is essential for also for our business, those are still being postponed. Daily maintenance and operational required upgrades are we are seeing clear signs that that's being prioritized now.

Larger projects are generally still lagging behind and full relinings. Next: "You delivered a gross margin of around 56% in the quarter, clearly above the recent history.

How much of this reflects temporary project mix versus structural improvements, and what is a reasonable level to assume going forward?" For Höganäs Borgestad, if we start with that before the group as a whole, the gross margin for Höganäs Borgestad is you should look at last 12 months to have a good view on the sustainable level.

There will definitely be influenced by the project mix, and it can have quite substantial impact on the quarterly gross profit margins.

I think for Borgestad as a whole, we have commented already that Agora will probably have higher margins going into '27, but we expect more or less the same margins, same results for second half for Agora Bytom as in 2025. Then

we have the last question so far: "Congrats on the great results. Any plans for dividend this year?"

That remains to be seen. Of course, the board has received a potential for distributing up to NOK 1.5 per share.

No decisions is taken, but let's see and follow the development both on the sale-leaseback and operational performances for third quarter. We will not promise anything, but we'll come back to it after third quarter.

No further questions?

No further questions. Then

thank you for listening in and enjoy the day and the coming weekend. Thank you.

Thank you.