Thank you, George. Welcome, everyone, to Elanders' conference call.

Together with me here, I also have Åsa Vilsson, the group CFO, and I'm also having Florian Beck here that will take over as CEO for the Elanders Group 1st of September. Now I will go directly to slide number 5 in our presentation and talk about the second quarter.

In the second quarter, we could see that the positive trend with improved demand continued, and we could show an organic growth of 3%, and if you adjust for R&C, the organic growth was 2%. Organic growth came mainly from Asia, but also Europe and North America showed growth, which was a very positive indication for us, and which makes us which makes things look better when we go into the second half of the year.

Also, adjusted EBITA result continues to improve, and it's increased to 181 million crowns compared to 167 the year before, and this was an improvement with 8%, and our adjusted EBITA margin improved to 6.2% compared to 5.5% the year before. In the quarter, we also managed to renegotiate a huge, large sorry, a large lease agreement in the US, which, combined with the opportunity to exit two other lease agreements in UK in the beginning of the next year, will give us a possibility to lower our cost base in 2027 with around 80 million crowns.

If we then go to slide number 6 and look at our cash conversion, you can see that we show a very strong cash conversion of 113%, which resulted in us freeing up around freeing up 92 million crowns from our working capital, which helped us to lower our net debt, excluding IFRS 16, with 19 million crowns, despite that we made a dividend of 24 million crowns, and we also had a negative currency effect of 56 million crowns on the net debt in in the quarter. If we then go to slide number 7, look at Supply Chain Solutions, we could show a strong organic growth of 4%, and if we adjust for R&C, it was still positive with 3%.

Asia continues to be the main driver, but as mentioned before, very positive positive in the quarter was also that both Europe and North America could show organic growth. If we look at the result, we can show continued positive development with both improved EBITA margin and EBITA result, and our adjusted EBITA margin came in at 7.0% compared to 5.8% last year, and adjusted EBITA result was 166 million crowns compared to 144, which was actually an improvement with 15%.

If we then go to slide number 8 to look at Print & Packaging Solutions, you can see that we had a challenging quarter, which resulted in negative organic growth of 3%, and this had a negative effect on our adjusted EBITA margin, which came in at 4.2% compared to 5.4% last year. The negative growth comes mainly from our German operations that has a very high exposure towards the German car manufacturers, which know that all of them are struggling with their sales, and and that, of course, results in lower volumes of manuals.

On top of that, they're also doing cost-saving programs that affects the number of pages in the manuals, which have an extra negative effect for us. On the other hand, we could see continued growth in online print, and also our publisher segment is growing, and this will over time be able to compensate for the decreased manual volumes.

If we then go to slide number 9 to look at the development of our different customer segments in the quarter, I will comment organic growth by customer segment excluding R&C. If we start to look at Electronics, the picture continues overall to be very positive, and in the quarter, we could see an organic growth of 5% because of stable demand in both Asia and Europe.

On the other hand, we could also see in the second quarter that our customers' laptop volumes are affected by the memory shortage, and and this creates some fluctuations in their demand, which affected us actually both in Asia and Europe. Fashion was stable in the quarter, and organic growth was unchanged, but we could see again more positive signs of recovery both in Europe and North America in the end of the quarter.

Very positive in the quarter was that Other showed a very strong organic growth of 9%, and that is partly because of recovery in demand from FMCG customers in UK and continued organic growth when it comes to online print. If we then look at Automotive, it's a very mixed picture for us, with an organic growth of 4% for Supply Chain, but on the other hand, a negative organic growth of 14% for Print, and consolidated organic sales was in line with last year.

Still very positive that we managed to grow in the Supply Chain despite a very challenging market. Industrial showed negative growth of 7%.

Here EU was in line with last year, but UK has had a negative growth for us. When it comes to Healthcare, we continue to see stable demand, and we could show organic growth of 2%.

If we then go to slide number 10 and look how things could be going forward, I must say that the positive start of the first half year continues to make us carefully optimistic when it come to rest of the year, especially when we see the continued organic growth and improved EBITA result in the Supply Chain Solutions, that is our absolute biggest area. We also continue to have lots of interest and requests in the pipeline from both existing and new potential customers.

We should, of course, not forget that the world around us continues to be very challenging for both us and our customers. When it comes to our markets, can we see a continuing improvement in demand in Germany, which are which is our absolute biggest market.

After a couple of tough years in UK, could we see some recovery in the second quarter, especially in the life cycle management segment, but also in the FMCG segment. This combine this combined with continued growth in Southeast Asia gives a very good momentum going forward.

Even if North America still is a bit challenging, with rather switching demand for us, that positive is that the churn rate at least is extremely low now in North America, and again, that the new sales pipeline is picking up in speed again. We're also starting to see an improvement with a higher utilization of our warehouses, which over time will lower our overcapacity, and the successful renegotiation of the of a major rental contract, as I mentioned before, and ability to exit two other agreements in the beginning of next year, will help us even further to to optimize our utilization, while we still have capacity for organic growth.

That was everything from me, and I hand over to the operator for questions.

Thank you very much for taking my questions. It's Gustav here from Nordea.

I thought maybe just to start off here, if you can just help us dissect the lease contract renegotiations here. Maybe if we can just start with Americas here, or North America.

Is it possible to quantify this, and also if we should see a positive effect already in Q3 for this region?

This was a huge facility that we don't even utilize anymore, and we actually had a contract running to 2031, but we have managed to renegotiate so we will exit the contract in latest in December this year, which means we don't have any costs for it starting 2027. We don't know yet if we will get any benefits this year, but we know that next year it will give us a saving of around $3 million in US.

Perfect. Will there be any

Of course, that will of course improve the result and the margin in US, because there we have had to suffer a lot because of overcapacity.

That's perfect. Then if we move to the UK there, I guess there were additional lease contracts there.

You mentioned 80 million SEK here in starting 2027. Is that from 1st of January we should expect those savings to come through fully or?

No, in the first quarter, it's the saving from US, the $3 million. Then for UK, that is actually a possible saving of around £4-5 million, that will start in Q2.

Because we have two contracts that we can exit, because the contracts is running out, it's perfect opportunity for us. If we don't fill it up, we just exit them, and then we have a saving of £4-5 million starting in Q2.

If we are lucky and sales are driving, then we fill them up, but then it will give us a saving anyway because it's also empty space, so that is how it looks like. That's around 80 million in saving, and yearly it's around 95 million, you can say.

Yep.

That is for 2027, that saving.

Got it. Then just on Electronics there, you comment on memory prices affecting sales somewhat.

Still, you comment 5% positive organic growth. Can you just elaborate a bit on the demand situation in that, and what you see here going forward?

I think, we still show a nice growth, 5%, but our customers could sell much more if they didn't have memory shortage. Still good growth for us, but I think our growth could easily still be 8% like in Q1 in Electronics if it hasn't been for the memory shortage.

Of course, it affects our customers, and then it's affects us. How it looks going forward is hard to predict.

We think there will be some challenges the coming quarters, but they work really hard to find memories, of course, but the good thing is the underlying demand for personal computers, like laptops, is really strong, it's more a shortage. It's a bit like when we had the semiconductor shortage in automotive industry a couple of years ago.

It of course will affect us that we could have grown much better in Electronics.

Perfect. Then when you just look at the overall business you have not just Electronics, but overall, have you experienced any trend shifts during the quarter in terms of

No, I think it's overall it's very good, and I think especially in Germany, that is still our biggest market, in Supply Chain, we are even growing in automotive even if it's challenging time for customers, because we are getting into some new projects, we are doing well. We can also see fashion in Europe is now start to looks better.

We are improving earnings, our customers start to look better. On the Industrial segment, also good in Germany.

We can see now that power tools, heat pumps, things like that is going better. Also, if you look at UK, that has been really challenging for us the last two years, we have really nice growth in life cycle management, that is very important for us, that gives good earnings.

Also even into FMCG, we could see growth. We get some new customers, and that's overall pretty good signs in Europe.

In Asia, continue to be good for us. Southeast Asia, Thailand is growing.

Also Mexico is doing well for us. Overall more stable, even if the world continues to be a bit up and down, yeah.

Oh,

that's perfect. If we then just jump to the Print business that you also mention here.

Can you just elaborate a bit more on the review you have there and potentially even cost savings in that part?

As we have been expecting car manuals step by step going down, that's why we have made this agreement with publishing, we are growing in online prints, we have a good plan to bridge it. We couldn't predict the brutal effect that the market has on the German car industry now, and in Print, we work with all the German brands, overall, the volumes is going down quicker than we expected.

With the cost pressure they have, they are now making the manuals very quickly, less pages, which is less value for us. We know we will grow and bridge with online print and publishers, but we can now see it will take some time.

We are now looking through our biggest facility in Germany very carefully. It could be that we will do some actions, as some restructuring, to more quick, to make our suit more in a right size, if I say like that, so.

Over time, still good growth, online print, publishers. Our other printing companies was really doing well in the second quarter, but the German one is our biggest one, and that's why it's affected our numbers.

We are looking through it now. I cannot say any numbers about it, but we go through everything carefully, customer, the costs we have, and doing analysis.

That's perfect, very clear. I take it that was all for me.

Oh,

thank you, Gustav.

Yes, hi. Markus here from DNB Carnegie.

Can you hear me?

Yes, Markus. Hi, Markus.

Hi, perfect. Let me start with some follow-up questions maybe on the leases.

I'll start there. The 80 million in savings or 80 to 95, you say 95 million in annualized, is that just the savings from the contract per se?

Do you also include the savings that you will make from filling up, or from capacity utilization overall? I would guess that's not included in the 80 to 95, right?

Is that pure savings?

No,

that's pure savings.

That's a pure saving, with all the rental costs, the taxes you pay, and you still have some utilization costs, you have some people taking care of the facility. It's now it's actually pure cost.

Perfect. Can you say anything about the balance sheet effects from you exiting these?

I think I can give that to Elsa.

Yes, because we discontinue all the expenses, we re-evaluated the IFRS effect. I think we lowered the liability with around 78 million SEK, and that kicks in right away now because we know that the contract will end this year.

Was it included in these numbers,

in

the Q?

Yes. In Q2.

Yeah.

Meaning the net debt, including IFRS 16, was reduced with that amount, yeah.

Perfect. Then the trends you've seen, both Asia and Europe and Asia is strong, and Europe is turning and is positive, you talk about Germany being positive.

Can you talk a little bit about trends? How they have progressed throughout the quarter, and what you've seen in the summary?

You express some confidence about the fall, etc. Can you just elaborate a little bit on the movement throughout the time

frame? I think the good trends for us is that if you look at the numbers country by country, like UK and Germany, and there's still almost no growth in consumption, but still we can see growth.

I think it's a combination that we have been very successful in gaining new customers, especially in Germany the last year. We did made a big restructuring, but we've been really good in gaining new customers in the Fashion segment.

Also then in UK, that also is a big market for us, we could really now see a lift-off in life cycle management. We don't show that in report, but that actually had a growth of over 20% in the second quarter.

That was really impressive in life cycle management. Also FMCG, even if UK shows now some growth, but I think we could see we were gaining some really new customers.

I think Europe overall in Supply Chain, we're in good shape. Also in Sweden, we're not so big there, but we gained also some new customers in Supply Chain.

We are looking at several projects in more eastern part of Europe. Things is happening there, so that overall good for us.

Asia, there we have our plans, Thailand, that was a very successful greenfield operation for us, they're doing really well, we're getting more volumes. We are now in discussions about Vietnam, about Malaysia.

China is still good for us. As I said, For us, it's more North America has been really up and down, the last year.

Every quarter we see now the pipeline is better, and then it slows down. I think it's been lots about the trade war as well, that makes our customers, especially in fashion, very hard to handle US.

Good thing now if you look at North America, US and Canada, is the churn rate is almost gone. We're calculating lots of projects.

It feels like our customers start to navigate around all these challenges with custom duties and things like that, so. Even if you cannot see maybe so much growth in the market, but for us, it looks like we're in a good position.

Also all the savings we did in Supply Chain last year also helps our margins to grow. Second half of the year is always our most important part of the year, which I will hand over to Florian and Elsa to take care of, but no, I must say it looks overall good for us.

Of course, it's challenging times. You never know.

The memory shortage, who knows, but without it, we should do even better. We hope it doesn't get worse, because that could affect us negatively, so.

Yeah.

Maybe a follow-up on the UK and then on US. If you look at life science and FMCG in the UK, how big a part of the business are those two segments?

You mean how big FMCG is in UK?

Life science and FMCG. Ooh,

life science is, let me look. Just give me a second here.

Life science is around 30 30 million pounds.

FMCG?

FMCG, looking for FMCG, what could that be? That should be around 20 25 million pounds roughly in UK.

Okay.

Uh That's 5 30, so, yeah.

For last year, right? Or in the quarter?

No, it's for year, yearly.

Yeah. On the US, and particularly in fashion, because fashion's been difficult, but it's good to hear that the churn rate is almost gone.

Because you phrased fashion as still challenging. Is it mostly that and it

Oh, I lost you. not

accelerating, but the churn is gone? Can you just explain a little bit?

I missed some of your words, but I think I caught it. No, I think it's in North America is, for a while, we had problem with the churn rate was really high, and then it was low, and then it come, the trade war things, and it went up again, but now it's stable, so that is very low.

It's a good base. The good signal with that one is also that we can see that the pricing now is stabilizing.

For a while, a competitor's staff that was extremely aggressive, was offering 20-30% lower price than market price because of empty space. Hopefully that now is stabilizing, that they don't need that anymore, and utilization is going up.

We can also see that we have more RFQs now than we have had in a couple of quarters, we are calculating, giving offers and prices on several customers. We can also see that some of our existing customers even show some growth, so.

I must say, it's really hard to say, I've said this before [laughter], it's been changing quarter by quarter in North America, but for the moment, it looks better again. Mhm.

We also are working hard to sell more in the Lifestyle segment as well, and a good thing for us, the last quarters we have managed to gain more customers in cosmetics and other products, we have also tried to open up other verticals more to compensate for fashion, and of course, we don't feel we see big boom in fashion in America, new verticals is important for us, especially in omnichannel, that we're good at, but we also look in other areas as well, so.

Yeah. If you look at the churn rate, because the churn rate has been high, when did this start?

Is it quite recent that it started to almost disappear, or has that been going on for a while?

No, it's pretty recent. We started good trend in Q1, and Q2 there was almost no churn.

Even in Q4, Q3 Q4 is hard for customers to leave, but last year in Q2, Q3, we had a high churn rate. It's been much more stable this year, it looks better.

Perfect. Then finally maybe, if you can talk a little bit about the timing of the Print & Packaging review, when do you expect to see the results of that, or when will the review be done?

The plan is to have it done in Q3.

Okay.

After analyzing it carefully and to go through it, and so then if we need to do actions, it will be in Q3.

Perfect. That's all for me.

Thank you very much.

Thank you very much, Markus. Thank you.

Thank you, George. That was my 69th quarterly report, and the last one for Elanders, I want to thank everyone that has been listening to me during the years, and it feels really good to hand over to Florian and Elsa, I feel confident that we will have a good future.

Thank you, everyone, and have a great summer. Thank you.