AAK Aktie

Welcome to the AAK Q1 2026 Report Presentation. [Operator Instructions] Today's event will last for 45 minutes.

Now I will hand the conference over to the speakers CEO, Johan Westman; and CFO, Tomas Bergendahl. Please go ahead.

Good morning, everyone. Thank you for joining us, and thank you for your interest in AAK. As you heard, with me here today to review our first quarter results is our CFO, Tomas Bergendahl.

Please turn to page or Slide #2. Today, we will cover quarterly highlights, selected events and the business and financial update, followed by concluding remarks. This presentation is scheduled for 45 minutes in total, including questions and answers at the end.

And with that, please turn to Page #3, regarding forward-looking statements. This presentation includes forward-looking statements that come with risks and uncertainties. These are our views on future events and financial performance, but actual results may differ.

With that, please turn to Slide 4, quarterly highlights. We delivered a solid start to the year with both organic volume growth and continued strong profitability. As expected, currency translation had a negative impact on reported figures. Operating profit increased by 11% year-on-year at fixed exchange rates. Including currency effects, growth was more modest at 2%, reflecting the headwind from FX during the quarter.

Volumes amounted to 515,000 metric tons, corresponding to a 3% increase year-on-year. This marks a return to growth following a period of softer demand, supported by improved commercial execution.

Profitability remained strong with operating profit per kilo, reaching SEK 2.49. This represents a 9% increase at fixed FX rates. The improvement was driven by continued internal optimization, including productivity and procurement improvements across our oil refining footprint as well as the ongoing impact from our Fit-to-Win program.

In addition, we benefited from improved portfolio and price management, positive operating leverage from higher volumes and supporting market conditions for cocoa butter alternatives.

Operating cash flow was strong at SEK 1.395 billion. This was supported by earnings as well as positive effect from working capital. Tomas will elaborate a bit more on the drivers later in this presentation. Return on capital employed was 20.7%, excluding the one-time restructuring cost in Q2 last year. Net debt-to-EBITDA was at 0.39x, reflecting a strong balance sheet and continued financial flexibility.

Overall, we are pleased with the start of the year, particularly the return to volume growth and continued strong profitability. At the same time, we are not satisfied, and we remain focused on further improving our performance.

Our priorities remain clear: drive volumes, strengthen profitability and maintain discipline in execution. And with that, let's turn to the next slide.

Some comments on selected events, starting with the annual report for 2025 published earlier this month. This is our first fully integrated report, combining financial and sustainability disclosures in line with the new CSRD regulation. This is now a requirement but also an important step in increasing transparency in how we report our sustainability impact. The key element is our first Double Materiality Assessment, which forms the foundation for how we identify and report our most relevant impacts, risks and opportunities. The Sustainability Statement has also been subject to limited assurance by our external auditor.

During the quarter, we also participated in the World Economic Forum in Davos. I represented AAK in discussions with industry leaders, policymakers and experts on topics central to our strategy, particularly the role of food systems in supporting better health outcomes. Building on this, we saw an increased focus on non-communicable diseases where AAK was invited to contribute a broader system-level perspective in relation to this. This aligns well with our role in complex value chains and our focus on scalable plant-based solutions. And importantly, Davos provides a platform to position AAK at the center of key global discussions and strengthen relationships that support our long-term strategic priorities.

Turning to sustainability performance. We were awarded a Silver medal in the 2026 EcoVadis assessment. We achieved a score of 74 out of 100, placing us in the top 12% of companies in our category. Rating reflects continued strength in areas such as environmental reporting and supply chain due diligence.

Finally, an update on our new food service facility in Staffanstorp, Sweden. Construction is progressing well and according to plan, both in terms of time line and budget, the facility is expected to be fully operational by the end of this year, with production ramping up through 2027, replacing the current Dalby site. Once completed, the site will strengthen our food service platform through increased capacity, improved efficiency and more scalable operations. Overall, these developments reflect continued progress across our strategic priorities from transparency and sustainability through external engagement and capacity expansion.

Please turn to the next slide for a review of performance per business area, starting with Food Ingredients. Volumes in Food Ingredients increased by 5% year-on-year. Growth was relatively broad-based across segments and regions. In Bakery, we saw a broad-based growth across all regions, led by Asia, the Middle East and Africa. In Dairy, performance was mixed with overall volumes declining. Asia, the Middle East and Africa grew while the Americas and Europe declined. Special Nutrition grew slightly year-on-year driven by Europe, while other regions were softer. Food Service declined slightly compared to the first quarter last year.

Operating profit per kilo amounted to SEK 2.42, down 7% year-on-year in the reported numbers. This includes a currency headwind of SEK 0.21 per kilo at fixed exchange rates, operating profit per kilo increased by 2%.

Operating profit decreased by 2% to SEK 752 million. This includes a negative currency impact of SEK 66 million. At fixed exchange rates, operating profit increased by 6%.

Next slide, please, over to Chocolate & Confectionery Fats. Volumes in Chocolate & Confectionery Fats declined by 1% year-on-year. Performance was mixed across regions. The Americas and Europe declined, while Asia, the Middle East and Africa grew. From a product mix perspective, the portfolio of cocoa butter alternatives developed positively and grew in the quarter, including CBEs, was flat year-on-year. This, together with higher volumes in Spreads, was offset by lower volumes in Filling Fats and non-specialty single oil solutions.

Operating profit per kilo increased to SEK 4.23. This includes a negative currency impact of SEK 0.43 per kilo. At fixed exchange rates, operating profit per kilo increased by 14%.

Operating profit increased by 2% to SEK 532 million. Currency had a negative impact of SEK 54 million. So at fixed exchange rates, operating profit increased by 12% in the quarter.

Over to the next slide and highlights for Technical Products & Feed. Volumes in Technical Products & Feed grew by 1% year-on-year. Performance was mixed across segments where Technical Products delivered growth in the quarter, while Feed declined slightly. Operating profit per kilo increased by 3% and reaching SEK 0.70. Operating profit increased by 4% to SEK 54 million.

With that, we now covered the 3 business areas. I will hand it over to Tomas to review the first quarter financial results as well as a closer look at our current CapEx priorities. Over to you, Tomas.

Thank you, Johan. Good morning, everyone. Please turn to Slide 9. Operating cash flow amounted to a positive SEK 1.4 billion in the quarter. Working capital decreased, contributing to the positive cash flow. This was driven by a reduction in inventory and an increase in accounts payable while accounts receivable increased, driven by volume increase and seasonality, which then impacted negatively on the cash flow. The decrease of the inventory in the quarter of almost SEK 500 million was driven by lower inventory levels, partially offset by an increase in price of raw materials.

CapEx amounted to SEK 290 million in the quarter, comprised mainly of investments related to maintenance, productivity improvements and capacity increases as well as debottlenecking. The CapEx spend for the full year of 2026 is expected to be slightly higher compared to '25 at roughly SEK 1.5 billion and in line with the indications given in the connection with the Q4 report. And I will come back to our CapEx spend later on in the presentation. Free cash flow amounted to a positive SEK 1.1 billion for the quarter.

Turning to Slide 10. Return on capital employed for the quarter remained strong at above 20%, at 20.7%, and on par with last quarter. Adjusted for the one-time restructuring cost of SEK 250 million recognized in Q2 2025. Year-over-year, the return on capital employed is slightly down from 22% mainly prompted by the increase in working capital driven by raw material prices.

Turn to Slide 11, please. The net debt-to-EBITDA ratio came down from 0.6x in the previous quarter to 0.39x in Q1, close to the recent low of 0.29x in Q4 2024. The ratio is expected to increase in Q2 2026, all else equal, driven by dividend and the initiation of the share buyback program provided these are approved by the AGM.

Turning to Slide 12. Let me briefly touch on capital expenditure. And as previously communicated and mentioned in this presentation, again, our investment level in '26 is expected to be somewhat higher than the recent year at around SEK 1.5 billion.

Starting with project governance on the left-hand side, our investments follow a structured and disciplined process. Each year, we've built a 3-year rolling pipeline based on bottom-up input from our sites and regions. This is then prioritized and aligned through the annual strategic planning process in combination with the target setting of the coming year.

For 2026, this translated into an initial pipeline of about SEK 2.5 billion, then we have prioritized this list down to approximately SEK 1.5 billion. The pipeline is split between maintenance optimization and growth projects.

The first category, roughly SEK 600 million or 40% of the spend ensures operational stability, efficiency and sustainability across our existing footprint, while growth projects are focused on capability and capacity development, strengthening long-term competitiveness and enabling future volume growth.

Moving to our current investments, making up the 2026 CapEx, these are focused on 3 main areas: firstly, supply chain resilience. Here, we're evaluating a potential investment in the shea value chain in West Africa, including crushing in Ghana and processing the already announced -- progressing the already announced joint venture with KLK in Malaysia for specialty palm fractions, both aimed at reducing volatility by supporting a more secure access to and quality of key raw materials.

Second, capacity. This includes investments in Foodservice, such as the new facility in Staffanstorp, Sweden, that Johan mentioned before. And Hotfill capability in our Runcorn facility in the U.K., also Foodservice, enabling in-pack pasteurization, cleaner label products without added preservatives, thereby entry into adjacent categories. It also includes continued expansion in Karlshamn, Sweden, all aimed at supporting future volume growth and a more flexible and scalable production footprint.

Third, portfolio enhancement and technology. Here, we're increasingly investing in innovation, often in collaboration with external partners to meet future demand for healthier and more nutritious food, improved functionality such as taste and texture, more sustainable solutions and increased supply chain resilience and versatility. And this is closely linked to our Better Futures innovation pillar that we have shown and discussed before.

Key areas include precision fermentation, Power-to-X technologies and enzymatic processes where we continue to build capabilities through both near- and long-term projects. We're also exploring new natural inputs for non-food applications from non-fossil sources, although this remains at an early stage. In addition, we're investing in a pharma facility in India, focused on non-active delivery systems, strengthening our position in higher value-added specialty ingredients and expanding into adjacent growth segments. While these investments are smaller in scale today, they are important building blocks for future growth and long-term competitiveness.

Finally, on the right-hand side, from a capital markets perspective, these investments support derisking of supply chain, capability and capacity for volume growth, as well as stronger sustainability position. Together, this strengthens our ability to deliver long-term margin resilience and earnings growth in line with our 2030 Aspiration.

And with that, I will hand it back to Johan for his summary and concluding remarks before we go for questions.

Thank you, Tomas, and please turn to the next page. To conclude, while the first quarter showed early signs of return to volume growth, market conditions remain somewhat cautious. Near-term visibility is still limited, and we, therefore, remain focused on the areas within our control. This means continued emphasis on disciplined commercial execution, operational efficiency and maintaining a strong cost and productivity focus.

Looking further ahead, we remain prudently optimistic about our long-term potential. We are committed to progressing toward our 2030 Aspiration with clear priorities across growth, profitability and impact. We will continue to invest in our capabilities, strengthen our portfolio and allocate capital in a disciplined way. All of this supports our ambition to deliver sustainable growth and long-term shareholder value.

With that, I will hand it back to the operator and open up for questions.

[Operator Instructions] The next question comes from Johan Fred from SEB.

I will limit myself to 2, if I may. The first one on the volume development in Food Ingredients. So volume growth was, as you state, driven by non-specialty solutions and Bakery. How does this align with your portfolio optimization strategy? Is this a deliberate mix shift to fill capacity? Or is it more of a symptom of softness in higher value ends of the market or something else maybe?

Thank you. We start with the volume question linked to Food Ingredients and Bakery. To drive growth through a market situation that we described as a bit cautious and the dynamics that we see around us in the world, we have been focusing on and we have communicated our efforts and actions linked to commercial execution and returning to sales growth. In that includes a better and more, call it, educated decision process where we look at capacity in different factories, to look at whether we want to win a volume or not, if it has positive leverage. So to some extent, this is a result of filling factories, yes, but filling factories in a disciplined manner, protecting margin as far as we can. And I think that's what we see here.

Okay, maybe a few more tons of non-specialty here and there, but still with positive leverage enough to be able to, as we report in fixed currencies, increase our earnings and even margin. So all-in-all, positive with the way we have executed that.

Anything to add to that picture, Tomas?

No, I think it's just important to emphasize that the margin, as you can see, is flat versus last year despite that...

Or even slightly increase.

And then increasing at fixed rates, right? So that's the one to keep an eye on.

Yes. And that was actually my second question. I would have assumed that you would have benefited more from operational leverage as you stated, the volume growth was 5% in Food Ingredients, but the EBIT per kilo at fixed FS was only up 2%. So is the comfort here simply that growth is coming from wrong parts of the portfolio in Q1? Or is it something more structural?

No, I wouldn't say something wrong in that. But I think as I explained before, our target is to always go for earnings growth. So our #1 target is growing our earnings, operational profit. And that can come through margin expansion or volume or ideally both.

And if we look at Food Ingredients, in particular, yes, volume growth is up 5% and operating profit is up 6%. One could argue, wouldn't you have higher leverage if the mix was the same? That would be correct, yes. But in order to fight for these volumes, we also need to do that where volumes exist and so forth. So I think we have deliberately tried to fill our factories. And that includes sometimes taking in business that is, well, it lower value-added while at the same time, focusing on growing the value-added part of the portfolio. So I would say that these are deliberate actions, and not to say that we are growing in the wrong segments, but rather we are using our capacity in our factories, and we're loading them in a disciplined way.

And when you look at this, you also have to look at the whole company and how margins develop because as we mentioned before, we don't have Food Ingredients factories. They're also in combination with what we do on CCF and so forth, right? And if you look at that, and you see that we have a 3% volume increase, we also have a 9% margin improvement at fixed rates. And you can argue back and forth on fixed rates. But if we look at the local performance in local currency, those are the margin improvements that we see. So that's the underlying of the 3% volume increase.

And if we also look at the comp within Food Ingredients, this was fairly high last year, SEK 2.59 and versus Q4, we're up 3% per kilo in Food Ingredients as well. So I would say you do see the leverage in the numbers.

And that's an important comment that the factory loading is across both Food Ingredients and Chocolate & Confectionery and not just Food Ingredients.

The next question comes from Benjamin Wahlstedt from ABG Sundal Collier.

Turning the focus to CCF. So you highlight favorable market conditions for cocoa butter alternatives as a tailwind. You also note that cocoa butter prices have sort of softened from their peak. At what cocoa butter price level does the economic case for a substitution weaken materially for your customers, do you think? And sort of how exposed is your EBIT per kilo or CCF margin to further normalization in cocoa prices? I know we've spoken about this at length previously. Just trying to get an update here.

Absolutely. Let's continue on that. I think, first of all, in an overall perspective, we have a view that it's rather more positive than negative that you see a normalization or coming back to normal on the cocoa prices, because what it did lead to was heavy inflation in retail, making Chocolate & Confectionery very expensive for consumers and even leading consumer product companies to do a bit of shrinkflation, which has a negative impact on volume.

So all-in-all, I would argue that this is positive, right? What we mean by a positive contribution is that we have seen the elevated levels, they are still comparably high, and that gives you a further reason to look for cost-efficient alternatives to cocoa butter where we come into play.

Now the stickiness and the stability or resilience in our earnings in CCF is also linked to the fact that our cocoa butter replacers are not just replacing. It also brings functionality which improves our customers' product. And that's where the stickiness is because you don't want to reformulate quarterly just because of the movement in raw material.

And back to your comment there on where is it -- where would it be concerning. I think to put it simply, it would only be really concerning if you would have a structural long-term price of cocoa butter that will be below the input cost of the alternatives. Because then you would argue that you would have a flip side that cocoa butter is more cost efficient than the alternatives. We are not there today, and we haven't been there. There's been maybe one point in time in history where that was the case, but that was for a short period of time.

So we're not concerned with this. Theoretically, that could be a risk, but I do believe that if you would see structural volume decline in the alternatives, you would also see that input costs would fall as a result of lower volume on that and then you would have a correction again. So I think this is quite resilient, although you can never make promises on the future.

And I would also add to that, that as you know, when you look at the cocoa butter prices, they peaked about 12 months ago and have been dropping since, right? So there is a track record now also of lower prices back to if we can maintain our margins and so forth. The margin improvement in CCF, I think it was 3% including FX and 12% at fixed FX is mainly driven by mix. So you have a larger -- even if the volume was flat, you have a higher volumes of high-margin products versus for CCF low-margin products in the quarter, right? So that's driving the continued improvement.

Perfect. I was wondering as well, if you could elaborate on the volume decline in CCF. Perhaps specifically, you made the comment that non-specialized volumes declined. Could you elaborate or perhaps say what share of the volume decline for the segment as a whole is attributed to non-specialized volumes? And perhaps just say if that's a deliberate decision or how we should view that?

Yes. I mean we're -- if we speak about the decline, let's keep in mind, it's 1%. So it's kind of minor flattish. And we believe that our volume in the quarter is, if anything, slightly better than the market. So in that context, I think it's more like in line with market. So I wouldn't call it any drama around volume up or down.

Within the mix, though, if we talk about that, then it's positive to see that our cocoa butter alternatives, which includes CBRs replacements or CBS substitutes and cocoa butter equivalents have performed well also within spreads, right? So these are high value-added solutions that we bring. That is deliberate to focus on that. But just as I mentioned a bit on Food Ingredients, we also try to load factories with decent volumes. So a lot of what we do, and that is under the umbrella of commercial execution and discipline.

A lot of what we do is with intent and deliberate. However, it is very difficult to kind of find a perfect optimal between non-specialty and specialty in every given moment. We need to take contract-by-contract. But the focus long term of the company is to invest more into the higher value-added segments versus the lower value-added segments. So I wouldn't put too much emphasis on the mix since we speak small numbers, in terms of decline.

The next question comes from Victor Hansen from DNB Carnegie.

Victor here. A couple of questions from my side. I'll begin with Food Ingredients volumes. We've spoken a bit about it here today, but it consists of many different categories. What is your qualified estimate of overall market volumes in Q1 within Food Ingredients?

It is, as you say, it's -- that's an area where it's more difficult to actually say what it is. I would say low single digit, if anything. But we have better...

Low single-digit decline or...

Yes. It's a soft environment still.

Just to add to that. What we do see, and that's new this quarter compared to the last, I'd say, 4 or 5 quarters is that we see Bakery growing again, which is really good to see. Dairy that has showed strength over the last 4 or 5 quarters is softening a bit, but that's because of high or low milk prices in the regions where we are present with our substitutes, right? So it's a bit dependent on that. So -- but really nice to see Bakery stepping up again.

Yes. Perfect. On CCF, we received some positive volume outlook from various chocolate manufacturers here, quite recently. Is it reasonable to expect volume growth for AAK starting possibly already from Q2? Or does lead times point to a later point in time for you?

Obviously, lead times play a role here since we -- I always repeat that internally and externally, we supply to production of products. So there are lead times in our supply chain for sure. And then with regards to an outlook, we have also seen -- we've seen those comments from companies within our industry. We do not make a formal guidance. I think it's worth keeping in mind that we have some dynamics in the world that creates uncertainty. But should there be that these forecasts from other companies materialize, then that should be positive for the absolute volume growth of CCF. And that should be positive for AAK.

Perfect. I have a final question, probably aimed towards Tomas. It's on the cash flow. So cash flow was strong, and you had a medium-sized working capital release. I'm wondering is this just price driven? Or are you starting to trim the inventory days?

And a follow-up to that question. Generally, the inventory days have been increasing a lot for quite a few number of years now, and I know many investors are asking about this. So what are your thoughts on inventory days going forward? Will you prioritize working capital more going forward?

Thank you. I would say we have a big, big focus on working capital and have had for some time. That wasn't the case maybe if you go back a number of years for AAK. But last couple of years, we've had active projects in place to review our inventory levels to see how we can do things more efficient. For Q1, there are 2 impacts on the positive side. One is that our inventory levels are at a more efficient level. So we have decreased our inventory despite a 3% increase in volumes.

There is also seasonality because 2 main crops, rapeseed and shea kernels are only sourced in sort of late Q2, Q3, early Q4. And in Q1, we sort of use the inventory without replenishing it because it's a season sort of acquisition of that inventory. So those 2 effects come in. What we do also see, as you can see in the presentation, there is price increases that are driving the inventory values the other way.

And if you look at the long term, as you also reflect on, I would say that, yes, it has been a bit of a tough ride from an inventory perspective for us, but it goes back again to what was mentioned earlier in the call, we are very susceptible to the price levels of raw materials. So when price levels increase and if you compare it to before the pandemic, they're up 2.7x, 2.8x of where we were 5 years ago. I would say that we make sure that we can increase our prices to maintain our margins and increase them. And you've seen that over the past 5 years, we've done that really well.

What is very difficult is to offset the raw material price increases in our inventory values. So if we replace an inventory item, if you will, for production, last time we bought it, it costs $100. Now it costs $150. That will increase inventory levels because we also sit on working capital between sort of when we buy and when we receive funds from our customers in terms of paid receivables. So that is an effect that's very difficult to manage.

But looking at the overall, we also see that when price drops as it did mid to late sort of Q3 2022, you see cash flow coming in, in a big way. We had very positive sort of cash flow coming in there. So that's one of the sort of complexities that we live with.

The next question comes from Matthew Abraham from Berenberg.

First one just is another one in reference to the Food Ingredients volume. You've mentioned that the Bakery has gone back to volume growth and Dairy now in volume decline. Just wondering if there's a mix effect there and the impact from that mix effect to EBIT per kilo. I appreciate you've spoken a bit about capacity utilization, but just wondering if the change in that volume growth dynamic is impacting that EBIT per kilo outcome?

Between Bakery and Dairy, that is not a big explaining factor. I would rather say that the total mix that we talked about before that we, we get the volume, we get the leverage from that, you could say, but at the same time, sometimes you have to give a bit on price or winning it and maybe a slight price reduction. The total mix is what's important, and that is a growth of absolute profit by 6% in fixed currencies. The one segment with higher EBIT per kilo is Special Nutrition, which has a slight positive volume increase, but still lower numbers compared to the big volume drivers in Dairy and Bakery.

Okay. Understood. A follow-up question just in reference to the CapEx color that you provided, talking to increasing capacity. Just wondering how we should think about the evolution of margin given the capacity that you're adding to the group?

We are very -- and focusing much more on that. In our total optimization effort that we have commented and written about over some years, that has included a much tougher way, you could say, to get new CapEx on the table. So I wouldn't see that CapEx is from AAK would lead to margins are going down. We'd rather do that a bit more lagging that when we really need it or to optimize production, that's when we add it. So our ambition is to run a tight ship and focusing on margin expansion while adding capacity where needed.

And capacity additions are very local, where we see that the market -- there is potential in the market, right? So we are selective, I would say. Capability is a little bit different, where we can see that we can go into a market where we are already with new products or versions of new products and so forth. But on capacity, we are very selective.

Okay. That's helpful. Just one more, if I may. The cocoa butter alternatives portfolio, can you just talk to the scale of the pipeline for that element of CCF and whether or not it's remained in growth despite the lower cocoa price backdrop?

Yes. Pipeline, I can't comment on or we do not disclose that. But we have a -- speaking about how we operate in CCF. CCF is one of the strongholds of AAK. Our center of excellence is well visited by our customers, and we are a go-to partner for our customers with regards to solutions to Chocolate & Confectionery products. That could be for cost efficiency, for shelf life, for improved texture and taste, et cetera. So our pipeline is healthy in that manner that we have a continued focus and drive.

With regards to cocoa butter prices, we have seen, as Tomas mentioned a bit, cocoa price was on the rise and now came down and you still see a stable development for AAK in that context. And over a long period of time, you have typically seen cocoa butter prices being higher than the closest alternative, which is our cocoa butter equivalents.

Obviously, in a very short time frame, you could see that input costs could be higher for the alternative versus the cocoa butter price. But over time, we have -- it's been more normal to see that there is a healthy delta between the 2. So I'd rather see a positive development with cocoa prices coming down because it stops the structural inflation at the shelf in retail that we have seen with the sharp prices. So if anything, it should be positive for inflation going forward.

The next question comes from Erik Sandstedt from Kepler Cheuvreux.

Erik Sandstedt with Kepler Cheuvreux. A few questions, please. On pricing, are you seeing any pushback from customers on pricing given the challenging market environment? And I'm thinking about CCF in particular.

Thank you. I think that is more a given than anything else. We live in a global environment with many big customers, global players, professional procurement organizations. There is always a element of negotiation and price. And obviously, our customers have seen inflationary items hitting them, if you will. And with that comes a focus on costs. But that's the name of the game. We see that all the time. That's also where companies with a professional long-term global perspective can also support. Some of our solutions are, in fact, a more cost-efficient solution than the alternative. There's always going to be a question on price. I don't see that changing a lot at the moment. It's just a standard rather than anything else.

Yes, makes sense. And then in terms of group function costs, they were quite low this quarter. Is this driven by the efficiency program? Or were there other sort of more temporary factors at play here? And what is a normalized level going forward, group function costs?

Yes. There are some -- from quarter-to-quarter, sometimes some one-time effect. But I would say that -- and you see that if you look back at the history. But I would say that one of the main drivers is, of course, the cost reduction program that we're running as well since April of last year. But each quarter is a bit different in terms of group function. And I would say that maybe looking at around SEK 80 million or so per quarter would be a rough average, I think, to stick to. But it may vary from quarter-to-quarter.

Perfect. And then just finally, a follow-up on the previous discussions about spare capacity. Did you say how much spare capacity you actually have now? And how it compares to historical and normal levels?

It's changing all the time, as we've said before, right? I mean, it depends on what type of product we run through each factory. So it's a moving target, if you will. But we've indicated before, and we can do so now again, I think we are at the same level that we've seen before around sort of 15%, but it varies between the different units. And it's very sort of local in how it works, right? But that's where we are, more or less, I would say, in line with the previous indications.

So maybe adding to it after a few years with volume decline, including efficiency and optimization program internally, we've freed up capacity, if you will. So around those average 15% free capacity will be something to work with.

Yes. And actually, maybe one final follow-up here, if I may. In terms of FX for the remainder of the year here, is it fair to assume that Q1 now was the sort of peak headwind at current spot rates?

Yes. If you look at everything else equal, the way it is now, yes, Q1 will be the biggest quarter in 2026. It will continue to be negative throughout the year, but it will be on a declining level from Q1, if you will. And we saw that in Q1 as well, month-to-month. January made up about half of the FX effect for Q1. So yes, we will see a decline, but it will still be negative throughout the year. And I think again, I'm not sort of projecting it. But if you just take the calculation where we are now with the current rates and disregard that they will probably move going forward, you will probably be at around sort of SEK 280 million, SEK 300 million for the full year. But again, things change though, right? But that's where we are if you make the calculations today.

The next question comes from Priya Patel from UBS.

I've got 2. So firstly, just on Food Ingredients again. I was wondering how much Bakery grew within this and how this compares to the end market? And then just on non-specialty oils, which is also a driver of the volume growth that kind of drove the weaker mix that you saw in Food Ingredients. Can you help me understand, like, I know you don't guide, but can you help me understand how you expect the mix to develop in a more challenging end market and what could drive the demand for some of the more specialty products?

The execution or the business model in AAK is that everywhere where we operate, quite a lot of what we sell and deliver is local, right? So we have global customer accounts. However, we deliver locally to local production, be that in China, India or the U.S. or Brazil. So what we are focusing on is always driving our mix and our engagement with our customers where we make a difference. And that is with more advanced products and ingredients.

At the same time, we run big refineries. So we also need to load our factories and make sure we utilize those assets. And it is in that mix, we always try to focus on achieving an absolute EBIT growth. So what we should expect or what we are driving towards in our strategy is a higher degree of specialized solutions overall. But while doing that, we will always also target an absolute EBIT growth. So that's as far as we guide, if you will.

This will be our last question for today. The next question comes from Matthew Yates from Bank of America.

Just a couple of questions to finish off. Apologies if I should know this, but your long-term target of SEK 3 per kilo. When that was given, was it said that, that was at constant currency? I'm just wondering that you've probably accumulated what a SEK 0.30, SEK 0.40 headwind since that was given. Does that mean the target needs to be rebased at some point to reflect the currency environment? Or do you think there's other levers you can pull to offset that headwind?

The second question really for Tomas around the CapEx strategy, and I appreciate what you're saying about discipline. And I guess the reality is SEK 1.5 billion is a record amount of spend for the company. Nevertheless, the balance sheet is incredibly strong. So when you're looking at project reviews and scrutiny around that, is it that the organization is presenting you with returns that aren't that attractive? Or do you simply not have the human resource capability to do -- to manage more projects at this point? I'm just wondering whether you are leaving some growth on the table because you're clearly not capital constrained.

We'll take the first question on the SEK 3 per kilo, was not communicated, not decided in a kind of a fixed FX environment. And -- but at the same time, in a year-on-year comparison, given the -- that we reported in Swedish krona, I think it's very relevant because what we do is, obviously, as I mentioned before, we operate and sell locally, and we earn our money in dollars and euros and so forth. So I think it's very relevant to look at that. But we remain at our target SEK 3 per kilo. It was not given with an assumption on currency and from where we are today at roughly SEK 2.5 and years to go, we see potential absolutely committed to deliver on that, and that's where we are, right? So I wouldn't call -- bring FX into that conversation. It's more relevant in a year-on-year comparison.

And then Tomas, maybe a bit on CapEx.

Yes. So thank you for the CapEx question. Good one. I think we estimate about SEK 1.5 billion, as we mentioned, 40% of that is related to sort of maintenance or sort of upkeep activities. 60% is the remainder. I'd say most of that for 2026, the majority would be towards capability. When we look at what we can actually -- in your question and what can we actually do, how much can we manage? I think there are possibilities to from a resource point of view to do a bit more, especially if it's sort of in different locations. If a lot of it ends up in 1 location, then it becomes more difficult as is easily understood, I think, right?

The problem, I think, with having to prioritize a bit is that when we look at some of these cases, the softest input into the case is the volume assumptions, and those are the ones that we struggle the most with. So a lot of the capability we like. Sometimes it's even connected to a particular customer, launch and so forth. So that looks good.

When we look at pure capacity increases in markets that are sort of mature, that has shown limited growth over the past 3, 4 years. We are very stringent, and it's probably the other way around that the organization is pitching a bit more optimistic business cases than maybe what we can see. So it's through a joint, very constructive discussion that we make these choices. It's not Johan and myself to sit there and says yes and no. But we challenge the cases, and we have a good constructive process with several people involved throughout to make those decisions.

So I would say it's capability much more, sort of, more of that capacity in mature markets, we're much more careful. And if it ends up in 1 plant, all of it, then resources constraint. Otherwise, I would say that's something that we can manage. But we want to see good returns on these things, right? Even if we have a good balance sheet, the returns are extremely important to us to continue our return on capital employed at the levels that we are today.

I hand the conference back to the speakers for any closing comments.

Thank you so much. Once again, thank you for the interest in AAK and for your questions. We have started the year well with organic volume growth, strong cash flow and in fixed currency, a strong earnings growth and a good margin. Thank you for listening.

Welcome to the AAK Q4 2025 report presentation. [Operator Instructions] Today's event will last for 45 minutes. Now I will hand the conference over to the speakers, CEO, Johan Westman; and CFO, Tomas Bergendahl. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us, and thank you also for your interest in AAK. As you heard, I have today with me our CFO, Tomas Bergendahl. And with that, please turn to Page #2.

What we will cover today is quarterly highlights, some selected events, business and financial update as well as some concluding remarks, and then we take Q&A, and we are scheduled to continue for about 45 minutes. With that, let's move to Page #3. This presentation includes forward-looking statements that come with risks and uncertainties. These are our views on future events and financial performance, but actual results may differ. So please keep that in mind when we are going over the material for you today.

With that, let's move into the presentation on Page #4. Against the backdrop of disciplined execution and on a strong and Making Better Happen culture within our company, we entered 2026 strengthened by a solid execution in 2025. For the full year, operating profit increased by 9% at constant exchange rates and excluding the Hillside divestment and the second quarter restructuring costs that we took. Leveraging our decentralized operating model, we adapted well to what we could call a challenging volume environment and continued to really generate value for the company and our shareholders.

Moving on to the fourth quarter performance. We delivered a solid result in a demanding market environment in the quarter 4. Consumer sentiment and demand in our key end markets remained under pressure, particularly due to elevated chocolate prices. Despite that, operating profit increased by 7% year-on-year, excluding the Hillside divestment and a SEK 80 million negative currency impact. When including the currency translation effect, operating profit declined by 2% compared to the corresponding quarter last year. Volumes amounted to 507,000 metric tons in the quarter, which is a decline by 2% year-on-year if we exclude the Hillside divestment. Profitability remained strong in the quarter with operating profit per kilo reaching SEK 2.45. Excluding the Hillside divestment, this represents a 2% increase year-on-year and a 9% increase at fixed exchange rates. The improvement was partly driven by continued internal optimization, including productivity and procurement improvements at our oil refining plants and progress in the Fit-to-Win cost optimization program that we launched in 2025.

Profitability was also supported by portfolio and price management with continued higher sales of specialty solutions. In addition, the fourth quarter profitability benefited from favorable market conditions for cocoa butter alternatives. Operating cash flow amounted to SEK 288 million in the quarter. And cash flow was supported by strong earnings and was adversely impacted by seasonal sourcing and rising costs for some of the raw materials that we use. With regards to capital structure, our return on capital employed was 20.9%, excluding the second quarter onetime restructuring cost. Net debt-to-EBITDA was at 0.60, also excluding the onetime restructuring cost. This reflects a strong balance sheet and the financial flexibility for AAK. The Board supported by management is proposing an ordinary dividend of SEK 5.50 per share for 2025, corresponding to a 10% increase to previous year.

In addition, the Board proposes the introduction of a multiyear share buyback program of SEK 1 billion per year over 3 years to a total of SEK 3 billion starting in 2026. The Board also proposes an extraordinary dividend of SEK 3.85 per share for 2025. Supported by a strong balance sheet, we remain well positioned to deliver on our capital allocation priorities while continuing to invest in the business and pursue value-accretive M&A opportunities. Overall, we are pleased with the quarter given the challenging market conditions, but we are not satisfied and see further room for improvement. We remain focused on disciplined execution, profitability and cash generation as we move forward.

With that, let's move to next slide, Page 5. Some selected events. And where we -- then if we turn into some more notable events of the quarter, these highlights are continuing to show the progress that we have on impact and the growing recognition for the work that we do. During the quarter, AAK's Kolo Nafaso sourcing program in West Africa achieved FairWild certification, a first globally for shea. This certification verifies the legal and sustainable collection of wild harvested shea kernels across roughly 400,000 hectares. Our Kolo Nafaso program directly supports and empowers more than 230,000 women collectors and their families. The certification further strengthens our ethical sourcing agenda and enables customers to leverage FairWild claims on their products.

In Chocolate & Confectionery Fats, our ILLEXAO EN 10 was awarded Ingredient of the Year 2025 by International Confectionery Magazine. Launched in June 2025, the product addresses industry challenge during the enrobing process that helps our customers improve their operational efficiency while also providing all other benefits that comes with a high specialty cocoa butter alternative from AAK. We also made strong progress in CDP's 2025 environmental ratings. Our scores improved in 2 out of the 3 categories: climate improved to B from C. Forest improved to A- from C, placing AAK in the CDP's leadership band for forest. These improvements reflects continued progress in areas such as deforestation-free palm oil, low carbon investments and stronger sustainability governance and reporting. Starting with the 2025 annual report, we will prepare our sustainability reporting in accordance with the CSRD.

A bit on people and culture. Following our latest employee survey with an impressive 91% participation rate, 16 AAK countries achieved Great Place to Work certification, up from 12 in the previous one. This recognition reflects a consistent positive and inclusive workplace experience across our organization. More importantly, the survey provides valuable insights to how we can continue to improve the performance of the organization in AAK.

And with that, let's move to Slide #6, some business highlights, starting with Food Ingredients. In Foodservice, volumes, excluding the Hillside divestment were on par with the same period last year. Lower volumes in the Bakery segment were largely offset by growth in dairy. Operating profit per kilo was at SEK 2.36, broadly in line with last year and included a currency headwind of SEK 0.18 per kilo. At fixed exchange rates and excluding the Hillside divestment, operating profit per kilo increased by 7%. Our operating profit, excluding Hillside, amounted to SEK 735 million. This included a negative currency translation effect of SEK 57 million. And if we look at this operating result at fixed foreign exchange rates and excluding the Hillside divestment, our operating profit increased by 7%. Moving on to Chocolate & Confectionery on Slide 7. Fourth quarter volumes in Chocolate & Confectionery Fats declined by 4% year-on-year compared to the same period last year. Overall, the challenging market environment and the elevated cocoa prices continue to weigh on consumer demand in the fourth quarter. Against this backdrop, we delivered a fourth quarter volume performance that held up well compared to the development in the underlying chocolate market. Operating profit per kilo remained strong and increased to SEK 4.40 from SEK 4.19 last year. Currency translation had a negative impact of SEK 0.19 per kilo. At fixed foreign exchange rates, operating profit per kilo increased by 10%. Operating profit amounted to SEK 524 million, up 1% year-on-year, but included a SEK 23 million headwind from currencies. At fixed foreign exchange rates, operating profit increased by 5%.

Then next slide, over to business area, Technical Products & Feed. Volumes in Technical Products & Feed declined by 5% year-on-year, mainly driven by lower volumes in Technical Products. Operating profit per kilo was at SEK 0.84, down slightly from SEK 0.86 last year and representing a 2% decrease. Operating profit amounted to SEK 64 million compared with SEK 69 million last year, a 7% decline year-on-year.

With that, we have now covered the 3 business areas, and I will hand it over to Tomas for some fourth quarter financial results. Please go ahead.

Thank you, Johan. Please turn to Slide 9. Operating cash flow amounted to a positive SEK 288 million in the quarter and SEK 862 million for the full year of '25. Working capital increased in the quarter, mainly driven by a negative impact from the development of inventory and accounts payable, while accounts receivables had a positive impact on the cash flow. The value of inventory increased with roughly SEK 800 million in the quarter, driven by seasonal sourcing activities, mainly related to shea, but also to rapeseed, as well as an increase in price of several raw materials. The negative impact in the quarter on working capital from account payables is driven by the raw material mix and related payment terms. Account receivables decreased with roughly SEK 500 million in the quarter, driven by lower sales at year-end, in line with normal quarterly seasonality. CapEx amounted to SEK 335 million in the quarter, comprised mainly of investments related to maintenance, productivity improvements and capacity increases as well as debottlenecking. The CapEx spend for the full year of '25 ended up at SEK 1.3 billion, in line with previous indications. Directional CapEx spend for 2026 is SEK 1.5 billion. Free cash flow amounted to a negative SEK 47 million in the quarter.

Please turn to the next slide, Slide 10. Return on capital employed for the quarter is somewhat down from the 22.4% achieved in Q4 2024, ending up at 20.9%, adjusted for the onetime restructuring cost of SEK 250 million recognized in Q2 2025. The outcome of the ratio was driven by an increase in capital employed, mainly due to the previously mentioned increase in working capital.

Please turn to Slide 11. The net debt-to-EBITDA ratio remained stable at 0.6 in the quarter compared to Q3 2025, slightly up from the low of 0.29 in Q4 2024. The increase from the end of '24 is mainly driven by the dividend paid in May of '25 as well as the previously mentioned increase in working capital.

Please turn to Slide 12. As Johan mentioned earlier in the presentation and as outlined in our Q4 report published this morning, we're updating our capital allocation framework. Our first priority remains to invest in organic growth of the business. This includes continued investments in innovation, capacity expansion and capability development. We also focus on efficiency improvements to support profitability and scalability over time. Acquisitions are a second capital allocation priority and remain an important part of our strategy. We focus on M&A activity that supports geographical expansion and capacity expansion, bolt-ons as well as potential adjacent product portfolios. We also look to strengthen technology and capabilities where it enhances our strategic position.

Third, return to shareholders. Within capital returns, the ordinary dividend is the primary and foundational mechanism. Our dividend policy targets 30% to 50% of net profit with the ambition to continue to grow ordinary dividend over time, in line with our long-term financial targets. Share buybacks are a second priority tool, and subject to maintaining leverage within 1 to 1.5x net debt-to-EBITDA target range. And may be suspended in connection with significant increases in raw material prices, M&A activity or other strategic cash needs. Extraordinary dividends are not structural and may be proposed when balance sheet capacity allows.

To conclude, we maintain a solid balance sheet that provides financial flexibility. Where relevant, we have the potential to temporarily operate with a net debt-to-EBITDA ratio of up to 3x to support acquisitions. Ahead of the upcoming AGM in May, the Board supported by management proposes an ordinary dividend of SEK 5.5 per share for 2025, an increase of 10% year-over-year. The introduction of a disciplined share buyback program of SEK 1 billion per year over 3 years, SEK 3 billion in total starting in 2026 as well as an extraordinary dividend of SEK 3.85 per share, amounting to SEK 1 billion for 2025. Each of the proposals are subject to separate approvals by the Annual General Meeting in May. Our capital allocation framework is designed to drive long-term shareholder value creation through sustainable and profitable growth.

With that, I hand it back to Johan for a summary and concluding remarks before we open up for questions. Go ahead.

Thank you, Tomas. Let's move into Page #14, Slide #14. Over the past 5 years, AAK has delivered strong performance against our foremost KPI, the operating profit. This performance translates into operating profit growth of more than 20% per year on a compound basis over the past 5 years, well above our long-term financial target. And while we reported a 1% growth in 2025 compared to 2024, the underlying earnings momentum was stronger, showing a 9% growth at fixed FX. But making better happen means that past success does not slow us down. It raises the bar. This is the mentality within AAK. So with that in mind, we will continue to push forward, push towards our 2030 aspiration, targeting profitability at plus SEK 3 per kilo and volume growth that outpaces the underlying market.

And with that, let's move into some concluding remarks. We delivered a solid year overall, including a 7% operating profit growth in the fourth quarter. Volumes were softer, down 2% year-on-year. Despite this, profitability remains strong with operating profit per kilo reaching SEK 2.45 in the quarter. Overall, we remain prudently optimistic about the long-term potential of the business, and we're fully committed to delivering on our 2030 aspiration.

And with that, we would love to take questions from the audience.

The next question comes from Johan Fred from SEB.

Starting with a question on volumes in Food Ingredients and more specifically Bakery. Volumes declined again in Q4. Could you give us some color on a few things? Firstly, roughly how much was bakery down in Q4 specifically? And secondly, how much of that decline would you attribute to sort of end market weakness versus your own decisions to potentially walk away from lower-margin contracts? And third, as you look into 2026, do you feel like you've now sort of worked through most of these -- the contract optimization? Or should we expect bakery volumes to remain under pressure as we continue -- as you continue to focus on higher-value products?

Great questions. Thank you. Within Food Ingredients, as you spot, right? So flat all in all, positive being dairy, but let's focus on the question on Bakery segments. We largely see this being down in the market, but we also know that we have still -- and that is still relevant for the fourth quarter. Some of our decision that you alluded to decisions of optimizing our portfolio, not following down and just lowering prices in all contracts, that still impacts quarter 4. We took some decisions late '24 that was for a yearly tender, for example, that still impacts. However, with our focus on now returning to volume growth with a better, call it, tactical decision toolbox, we are also targeting growth in bakery. We believe bakery market was down mid-single digits. So our performance was roughly in line with market, but including some tactical decision. Going forward, we remain focused on growing with the market and hopefully slightly better than that.

That's very helpful. And sort of zooming out a bit looking at the group as a whole, volumes are down, but profitability is up. How much of the margin expansion is price driven versus cost reduction? And a follow-up to that, are you seeing any customer pushback on pricing?

Yes. Well, totally, I think the total market, right, is obviously Food Ingredients plus Chocolate & Confectionery and then we have lower volumes and a smaller business in Technical Products & Feed. But obviously, as we all know, we need to go down into the different segments to really understand the Chocolate & Confectionery is certainly a bit different from Food Ingredients in general at the moment. But overall, I would say that given the geopolitical environment, given years of inflation, there's no doubt that there's been a fairly tough market condition, you could say, with consumers looking at affordability, et cetera, I think that's a general comment in the market and with disruptions like tariffs on and off and so, of course, that has an impact also on the food system. However, it hasn't had a significant impact because we've been able to adjust for this, and we are used to adjusting based on raw material fluctuations, et cetera. But I do think that this has had an overall impact on the market.

With regards to customers pushing back, there's also no doubt that global large customers and local large customers, they are the ones that we sell to, they are the ones that in turn sell into retail where consumers are facing the prices. Obviously, they are also very keen on managing cost. So price is always a discussion at the table and it has absolutely been more relevant over the last couple of years, and that still holds. So we need to fight and win with our differentiation and being relevant, offering our functional ingredients. But at the end of the day, that's, of course, a decision for our customers where price is an important factor.

And when you look at our margins and the continued journey, it is as it has been in the past, mainly driven from internal activities as we've outlined on, amongst others, the latest Capital Markets Day. It is that continued journey towards the 2030 aspiration of SEK 3 per kilo.

And also, I think worth mentioning, I highlighted this, the example we did of being rewarded with Ingredient of the Year, that solution is actually an ingredient that has the same functionality in the product, but actually improves the operational efficiency of our customers, enabling them to run their lines longer. So in that example, we're actually offering a cost-efficient solution for our customer, help them reduce cost and downtime in their production. So that's also how we focus on not just innovating better ingredients from a taste and functional perspective, but also for how to improve the customers' production lines. So those are examples of how we can still win business in a cost-focused environment.

And finally, if you could just -- you continue to mention a favorable market within CBEs. But as we've all seen cocoa prices have come down a lot. How sustainable is the margin performance that you're currently posting in CCF if cocoa prices continue to sort of normalize and volumes in the market stay weak?

I think there are separate dynamics here. I think, first of all, with the high cocoa prices, where most of the products and many of the products does include cocoa, that has had a negative impact in terms of inflation. So I think it reducing or the reduced cocoa prices now coming down has, I think, a positive impact going forward because it reduces inflation. So that's a positive for the chocolate segment as a whole. Now we are replacing part of the cocoa butter segment with our solutions. And that's where the delta from our solutions to the cocoa butter prices has been very, very high, supporting and that's the favorable piece we're talking about, supporting the reformulation agenda at our customers.

But the prices of cocoa today is still at the level where our solutions are cost competitive to cocoa butter. So -- and that's also what we have seen for many, many, many years going back that, that has been the case even before this rapid inflation. So cocoa prices needs to fall significantly down in order for cocoa butter alternatives to not be cost efficient.

The next question comes from Setu Sharda from Barclays.

So I have 3 questions. Continuing on the volume growth question. So FY '25 was quite challenging with tough end markets. So what are the key drivers you are assuming for a volume rebound in 2026 in both your food ingredient and C&CF business? And how much of the growth is expected from a customer win driven versus market recovery?

And my second question would be around your margins. Like in Q4, your gross margin was down 400 bps and -- but the EBIT margin is kind of stable. So what is the road map to build margins from here in 2026? Should we expect further OpEx efficiencies?

And my third question would be again on the C&CF margins. Given lower cocoa butter prices and rising share cost, how confident are you in sustaining decent C&CF EBIT per kg?

Thank you. So first, if we look at the volume growth, I do think that it's hard to speculate, right? But I think overall market, both in Food Ingredients and Chocolate & Confectionery, I think if we see, call it, stabilizing price environments where inflation is at least halted, right, I think that, that will speak in favor of returning into, call it, normal consumption patterns where, for example, indulgence has been on a long growth journey if you look back. And I think that's where lower cocoa prices is a positive in my mind because that reduces the inflationary pressure.

We still have a very cost competitive and functional ingredient in our cocoa butter alternative. So I think all in all, it's been negative to the end market with the higher cocoa prices, even though it's given us a reason to have a continued dialogue with customers on reformulation. So I think on a volume perspective, that should be positive if we see a slowdown or no inflation or even maybe reduced prices on the shelf in retail, let's see.

And then with regards to margins and gross margin, Tomas?

Yes. As we can see in the quarter, gross margin is down compared to same quarter last year. If we look at the net sales, first of all, adjusted for Hillside and FX, we were up 10% to 12%, in line with what we see in terms of raw material increases. Gross margins that are under pressure, but primarily due to a very strong comparison in Q4 last year. We see this compounded to some extent by unfavorable product mix, which has a shift then to relatively lower sales in CCF and higher sales in Food Ingredients. It should be stated, of course, that gross margins varies over time to some extent, driven by mix and timing and so forth. So we don't see any drama in this. The offset down to EBIT is on the cost side, and this is mainly driven by the Fit-to-Win program that we announced in April 2025 that is performing well, and we expect that to reach the targeted savings of SEK 300 million by mid-2026.

Well, I would also like to add on the first question on volume. So my comments there were more on the market side of things. But as we announced earlier last year, we have targeted actions on volume growth, where we -- #1 target is still to grow our EBIT. So whenever we have a decision at hand, our main focus is to drive EBIT growth, which can lead to, as you know, that we sometimes say no to business or renegotiate. But we have a clear focus across the world of AK by being better at evaluating business opportunities for how to load our factories with an EBIT accretive volume that might be to a lower price or lower margin, but to drive still absolute EBIT growth, right? So there are really actions ongoing to drive volume growth, and that's where we intend to take back market share, if you will, and continue to grow higher than the market. That's the ambition. That's the actions that are in place. But again, we will not do that to any price, if you will. We will still remain focused on absolute EBIT growth.

Last question being on the sustainability of CCF margins. And obviously, margins at the end of the day is a function of price versus cost. So no doubt that increased shea prices is hitting the cost for everyone producing cocoa butter equivalents with shea. That is, normal raw material fluctuations, if you will, that we try to then compensate for in the way we price. The price that we win to our customers is always a function of what our competitors are offering, right? So the link between cocoa butter prices and our CB prices is -- that's a disconnect. We talked about that a lot, right? So I do repeat that CBs based on shea is still cost competitive to cocoa butter. The absolute margin will be a function of how well we and others price our products against the cost uplift that we've seen in shape. But we have been sourcing well, and we are well covered to continue to deliver, and then let's see what that margin looks like. Our focus remains strong on continue to optimizing our flow both in the way we procure, the way we produce and the way we run our factories. And the net of that becomes the future margin.

The next question comes from Joan Lim from BNP Paribas. Please go ahead.

Three questions from me, please. First is, would you expect the infant formula recall with customers to have a material impact on your Special Nutrition division? And can you remind us of your exposure to the big multinational customers versus the local and regional customers in China? That's my first question. The second question is on the Fit-to-Win program. You had expected, I think, SEK 100 million of cost savings in 2025. Is this unchanged? Do you see any acceleration or phasing effect for Q4? And the third question is in the context of continued soft end market volumes and with a competitive pricing environment, are you worried about operating leverage for AAK?

Thank you, Joan. First question on the impact of the infant recall. Let me start with saying that this was not linked to any products sold or the product categories from AAK. However, we obviously follow this closely, and it seems like the market and the producers have reacted early and professionally. So I don't see a major impact to our infant formula business more than that, of course, there needs to be a filling the shelves in retail, of course, like with any recall, which has a slight positive volume impact. But the main focus is, of course, for the industry to make sure that there is food safe products on the shelf, and that's where we will always cooperate with our customers to help. But in this case, it's nothing to do with our products. I don't think it has a major impact to AAK more than the fact that we, together with other ingredient suppliers, needs to help produce for filling the shelves. And then our exposure to the multinational as well as the local producers is quite balanced. We have been part of this over many, many years, where when it shifted to international players, we grew a lot with them, but we have also grown volume back with the local players. So we're quite balanced in that regard.

And I would say that we shift with how the producer shifts basically because we are present in both customer segments, if you will.

So if that concludes the answer on the first question, then over to the second one, Tomas, on Fit-to-Win.

Yes. So good question. Fit-to-Win, when we outlined it, we said just as a repeat, we would have SEK 300 million of cost reduction by mid-2026. We estimated the savings in 2025 at SEK 50 million and then a ramp-up through the first half of '26. The actual of that is closer to just north of SEK 150 million. So the program has impacted with larger cost reductions quicker than we expected it to. And to me, that's a phasing of being quicker to act rather than increasing the overall amount of SEK 300 million, which we are very comfortable with achieving by mid-2026.

All right. And then over to the third question, which was, if I recall correctly, are we concerned with operational leverage or negative operating leverage due to softer volumes? Obviously, if volumes go down over time and significant volume reduction, yes, that is a concern. And for us, just like any other company producing high volumes like we do. I think it's worth mentioning, though, that despite a 2% volume decline this year at fixed exchange rates, we delivered an operating profit, which was up 9% year-on-year. So at the moment, at these levels, we have been able to really adopt, be agile, focus on our improvement programs, like Tomas alluded to. But if volumes would continue to go down by a significant amount, that would be a challenge and a concern, yes. On the other hand, I am also very energized by the fact that if we do get back to volume growth, we would also have the positive leverage in the current situation with our optimized factories, the way it sits at the moment.

And I want to be clear that at current levels, we don't see the negative leverage impact as is today.

Yes. If we put in another way, we don't see under-absorption yet at these levels, right? So you would have positive negative leverage on any volume uptick or downtick, but not in an under-absorption situation, right? Is that helpful?

Very helpful.

Good.

[Operator Instructions] The next question comes from Victor Hansen from DNB Carnegie. Please go ahead.

Yes, 2 questions from me then. Firstly, on cash flow. Working capital has been increasing for 8 quarters straight despite your Cash to Grow program. I know some have been discretionary, for instance, when you move to palm oil sourcing, but it's still quite negative. So what are your key reasons for this? And did you see any EUDR impact in Q4 specifically? That's the first one. I can start with that one.

Thank you. So the -- as you mentioned, we had the change to certain supply agreements and so forth. I would say the main driver overall is the increase in raw material prices that we've seen over the last, I would say, 12 to 18 months. And this is usually, as we mentioned before, this hits our working capital with a lag of 6 to 9 months. And if you go back, we see that we've seen an increase for Q4 of about 30% in prices if you go back 9 months. So that is the main driver of the increase in working capital and the negative impact on cash flow. That said, the Cash to Grow focus remains, and we have now conducted the program throughout all major facilities. We have actions in place, and those are being followed closely on a monthly basis. And do and will continue to yield positive impact.

Okay. Perfect. And then a follow-up on the Special Nutrition market. Do you see any impacts here?

We did not see any significant impact of the EUDR.

No, sorry, I forgot that. No, the EUDR ramp-up that we had towards the end of '25 was much less than what we had in '24. And the small amounts that are there, maybe SEK 100 million, SEK 200 million will roll out in Q1.

All right. Second question.

Yes. Thank you for clarifying that. Perfect. So on the Special Nutrition market, a follow-up, do you see any impact on your fundamentals from the contamination? Are you seeing any more incoming requests rather than dynamics here? Because you, of course, remember what happened in China after the scandal many, many years ago that the market got more premium. Is that a positive possibility for you?

I want to be -- yes, it's a great question. And I just want to just be very careful with the words here. Contaminants is never positive, right? So our responsibility as a whole market is always, always to focus on food safety, and that is what we're doing. But you're also correct in the context that is AAK one of those companies that sees this as an important topic that is always trying to be in the forefront. Yes, we are. So we have, together with the industry, been able to solve issues that comes across or be proactive in identifying better opportunities for better ingredients, better food safety. So that is a priority of AAK. So whenever there is a raised bar or tougher restrictions, we see -- we choose to see that as an opportunity. But again, focus is always for the industry on food safety.

Okay. But no immediate requests from more customers?

Not a bit. This was not. This was a bit outside what we do. So not in our processes and our raw materials. So not in this specific case, but there is an ongoing dialogue on raising the bar as a whole, and that's where we have a role to play and an opportunity to continue to be in the forefront.

The next question comes from Oskar Lindstrom from Danske Bank. Please go ahead.

Well, 2 questions from me. The first one is on the share buyback program. And could you say anything about how that will be structured? You going to be buying back a steady amount of shares or for a steady amount of money each week, month? Or is it going to be more sort of ad hoc? And also, if I may just shoehorn in on that question, given these cash returns to shareholders, what's your outlook for acquisitions, big and small? That's my first question.

Thank you. I think very short, we -- as we also communicate, we intend to do a disciplined share buyback. So we don't intend to do it ad hoc. We will come back with more exactly in what time period, et cetera. But we intend to do it disciplined and not in a way that it disrupts the normal daily trading, if you will. That's the intent on that one. And the second piece was -- yes, M&A, right? So no, we remain as focused as ever on M&A. We just conclude that our balance sheet is strong. Shareholders are indeed looking for returns, and we think we have the capacity to do that. So that's, as Tomas said, also the #1 priority is to grow the business, find M&As. And if we do, and we don't have the headroom, then we could pause something, right? But at the moment, we see this opportunity. So we remain focused on M&A. We try to get companies to flip. But as I've said many times, there's not a lot of companies for sale in our industry. So therefore, we need to be patient. And with a strong balance sheet, we see an opportunity to now return cash in this way.

And my second question is on the demands from several West African countries where you source some raw materials that you and others start with more in-country processing. Can you give an update on how you're being impacted by that or are handling it? And is there any sort of potential CapEx for such investments included in your -- was it SEK 1.5 billion CapEx guidance for '26? Again, 2 questions in one. Sorry about that.

Yes. Without going into specifics strategically, let me be clear, we follow this development. We are well spread in West Africa. We have a long, long history of sourcing. So number one, we are resilient in the way we operate to get kernels out in our current structure. We are also looking at how to build a resilient supply chain going forward, which might include investments locally and with that will come CapEx. So short answer is we are on top of that, and there might be investments going forward, but that's where we need to evaluate our different options and choose the best optimal model for AAK.

The next question comes from Matthew Yates from Bank of America. Please go ahead.

Two questions. The first one, just to go back on Q4 for a moment and understand, I think there was a question earlier about bridging that gap between the gross margin and the operating margin. I'm working off your condensed P&L. So I don't have full visibility on the line items. But I see that employee cost was down about SEK 100 million year-on-year and other external expenses down a bit more than SEK 200 million year-on-year. I assume some of it is currency, some of it is probably the restructuring program. But did you make sort of did you release provisions for things like bonus accruals if you were coming in under budget? Or just any other granularity you can give on how you've managed to control the costs?

And then second question, Tomas, just looking into 2026, I appreciate you're not being overly specific on guidance per se. But if we take one just mechanical element, which is the currency, if you were to mark-to-market based on where rates currently are, what sort of a delta would you be thinking about for operating profit in '26 year-on-year?

Thank you. Starting with your question on -- the continued question on gross margin. And yes, there is FX effect in that SEK 400 million. The main driver, as I mentioned before, is the effects of the Fit-to-Win program, both on the wage side and then on the external expenses such as consultants and travel and all the things that we put into the program when we launched it in April of 2025. That follows the plan and for the full SEK 300 million by mid-2026. And as I mentioned before on an earlier question, we do see quicker returns on the program than expected.

As related to a question on bonus releases, there is a slight such impact, but not big overall if you compare '25 to the bonus levels of '24. So the main driver again are the impact from the Fit-to-Win program.

And the currency?

Yes. When we look at -- I mean, it's very difficult to predict. The Swedish krona has continued to strengthen early here in the year. So it's difficult to give guidance, and we don't give guidance on annual performance as is. But we have our long-term guidance of 10% EBIT year-over-year. We have our 2030 aspiration. But the introduction of 2025 or 2026 continues to see a strengthening Swedish SEK, which would have and will have impact, I would at least say, in Q1 on the EBIT development year-over-year.

Especially on the dollar side.

Yes, especially on the dollar side, as Johan mentioned, yes.

Okay. But would you be willing to put a figure on that in terms of how much of the headwind from currency is given sort of what -- where prices are, but also whatever hedges or other things you have in place?

No, we don't go into that detail. And as I said, things move every day, and it's very difficult to predict. We are very clear on the impact on historical numbers as we are in Q4 and for 2025 as a whole.

And I think maybe as a clarifying, the bigger ticket item in this is not the rolling of hedges and such. It's the translation effect of the operating results. So I think that's the way to maybe look at it.

And in 2025, you saw in total, SEK 330 million and SEK 80 million alone in Q4, and that's translational effects.

Now on to the last question of today. The next question comes from Erik Cederberg from Handelsbanken. Please go ahead.

So regarding the volume development, I think you said at the last report that the volumes for the Food Ingredients segment saw a sequential improvement throughout the quarter. And you also talked about already seeing some traction in your volume mitigation actions. Is there something that has occurred during the fourth quarter that explains why this sequential improvement is not more visible?

No, not really. And I think I had a media interview earlier today that was on the same thing. I think it's worth keeping in mind that we deliver to a global food system with consumers not rapidly changing behaviors, right? But on the aggregate, you do see that like high inflationary pressure, you see a bit of shift between categories. But nor when it goes down nor when it goes up, you see a massive change. So we do see positive effects on our programs. That means that our organization is doing more and better tactical decisions, but it doesn't change overnight. And our contract with customers are versions of mid- to long term, if you will. So that's why it takes a bit of time, both when it goes up and when it goes down. So I think that's -- so with that, I don't think that Q4 was an outlier versus what we saw in Q3 in the early communication. Food Ingredients being flat with strong traction in dairy, a bit weaker in Bakery is okay and Chocolate & Confectionery down 4% for us, but we see that as in line with or slightly better than the market.

All right. And then I also have one more. You had some of your industry peers out talking about an inflection point for the innovation cycle as the cocoa price is trending down. And given your position as a co-innovator together with your customers, are you seeing any significant pickup in demand in regards to this?

Yes. We have seen a great interest, yes. I would argue that there's been an ongoing -- especially if you -- was your question linked to Chocolate & Confectionery or was it in general? Was it in general or chocolate?

Yes. Chocolate and Confectionery.

Yes. So I have not -- I cannot say that I've seen an inflection point as of now now. But I would argue we have seen the increased interest has been there over some time. And we have talked about this in the calls before that there is more new products on the shelf, the chocolate bakery segments where you include wafers and fillings and coatings, et cetera. So I would say that there is an ongoing innovation, new product pipeline with our customers. And at the moment, that continues. But I wouldn't overexaggerate to say that we have seen an inflection point in Q4. But I would say that, yes, there is a clear interest to innovate and put new products on the shelf and try to drive demand. That's something that we see.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you so much. Not a lot to add more than thank you for listening. Lots of insightful questions. As always, we remain prudently optimistic. We closed a strong quarter, 7% operating profit increase at fixed FX and a year with 9% increase in a somewhat demanding market. And with that, we are confident in our ability and focus going forward.

Welcome to the AAK Q3 2025 Report Presentation. [Operator Instructions] Today's event will last for 45 minutes.

Now I will hand the conference over to the speakers, CEO, Johan Westman; and CFO, Tomas Bergendahl. Please go ahead.

Thank you. Good morning, everyone. Thank you for joining us today, and thank you for your interest in AAK. As you heard with me today is also our CFO, Tomas Bergendahl.

So with that, please turn to Slide #2. What we will cover today is quarterly highlights, selected events, business and financial update and followed by some concluding remarks from my end. We're scheduled to do this for about 40 minutes, including a Q&A session at the end.

And with that, please turn to Page 3. Just a reminder, this presentation includes forward-looking statements that come with risks and uncertainties. These are our views on future events and financial performance, but actual results may differ. So please keep that in mind when we go over the material.

With that, please turn to Page #4. Starting with the quarterly highlights for Q3 2025. As you've seen in the Q3 report published earlier this morning, we delivered a solid quarter overall, broadly in line with the previous one with strong operating profit despite somewhat soft volumes. Operating profit in the third quarter increased by 9%. This excludes the year-over-year impact of the Hillside divestment as well as the SEK 85 million currency headwind. When including the effects of currency translation, operating profit grew by 2% compared to the corresponding period last year. Tomas will go over the main drivers behind the FX impact a bit later in this presentation.

Volumes declined slightly 2% year-on-year, but increased 4% sequentially. Looking at the year-on-year comparison, the volume decline was mainly driven by an 8% reduction in Chocolate & Confectionery Fats. Food Ingredients, excluding the Hillside divestment was flat, while Technical Products & Feed decreased by 1%.

And just as a reminder, the Hillside divestment refers to last year's sale of our North American Foodservice business. That business accounted for roughly 5% of our total volumes and is therefore weighing on the reported year-on-year development, an effect that will continue also in the fourth quarter.

Profitability was strong. We -- with an operating profit per kilo reaching SEK 2.47 in the third quarter. This represented an increase of 5% or 12% at fixed exchange rates, both excluding the Hillside divestment. This improvement was driven partly by continued internal optimization, including productivity and procurement improvements at our oil refining plants as well as our Fit-to-Win cost optimization program and partly by better portfolio and price management with continued high sales of specialty solutions. Favorable market conditions for cocoa butter alternatives further supported the third quarter profitability.

Turning to cash flow. Operating cash flow was positive at SEK 542 million, driven by strong underlying earnings, partially offset by a negative contribution from working capital. Our net debt-to-EBITDA stands at 0.61 and return on capital employed reached a solid 21.6%, both numbers excluding the restructuring costs we recorded in quarter 2.

All in all, a solid third quarter result with a 2% absolute growth in operating profit despite the significant headwind from currencies.

And with that, please turn to next page. So before we go into the business and financial updates more in detail, let me briefly cover some highlights, a few events since our last call. I'd like to start by acknowledging a very sad loss. As previously communicated on September 21, a tragic incident occurred at our facility in Louisville, Kentucky, U.S.A., resulting in the loss of one of our dear colleagues. Emergency services responded immediately and the affected part of the plant was shut down as a precaution. Since then, our focus has been to support those impacted, ensuring access to appropriate assistance and honoring the memory of our much valued colleague. We are cooperating with authorities in ongoing root cause investigation and have engaged both internal and external experts to understand exactly what happened. Safety and care for each other remain our highest priorities, and we are committed to learning from this incident and taking all necessary steps to prevent a reoccurrence.

Turning to our strategic development. AAK has entered into a joint venture with Kuala Lumpur Kepong Berhad or KLK to build a specialty palm fractions plant in Pasir Gudang, Malaysia. The joint venture, which we've named Nura Specialty Oils and Fats or Nura, will strengthen our upstream access to sustainable, high-purity specialty fractions used in, for example, the production of cocoa butter alternatives, one of the key growth drivers within Chocolate & Confectionery Fats. For AAK, the total investment amounts to roughly SEK 300 million to be implemented over the next 3 years. And the plant is expected to ramp up in 2028 and reach full contribution in 2029. By broadening our supply base and reinforcing upstream integration, Nura will complement our long-standing supplier partnerships in the region, increase resilience and support the long-term profitable growth of Chocolate & Confectionery Fats.

Moving on to shea sourcing and the development in West Africa. Shea is one of AAK's more important raw materials and a key input in the production of cocoa butter equivalents or alternatives. Each year, we source shea kernels from across West Africa, where hundreds of thousands of women are engaged in the collection process. In recent months, several countries have introduced export restrictions on raw shea kernels. We are closely monitoring that situation and remain in dialogue with local authorities, industry associations as well as suppliers. While these restrictions have created a short-term uncertainty in the supply chain, AAK has long invested in the direct sourcing, local partnerships and traceability programs across the shea belt. These initiatives strengthen our resilience and help us adapt quickly to regulatory changes. At this stage, the export restrictions are not expected to have a material impact on our ability to serve customers. Our diversified sourcing model, combined with long-standing local relationships help us ensure continuity of supply.

And finally, as we entered the fourth quarter, AAK reached a milestone. Our 20-year anniversary as AAK. 20 years ago, on October 1, 2005, Aarhus United and Karlshamns merged to form AarhusKarlshamn, today known as AAK. The merger combined more than a century of expertise in plant-based oils and fats, laying the foundation for the global leader we are today in high specialty fat solutions. This anniversary is a meaningful reminder of our strong heritage and the power of combining technical excellence with global reach with innovation and sustainability focus, strengthening -- strength that continue to define and drive AAK today.

And with those events, we turn into the next slide, starting with business area highlights for Food Ingredients. Overall, volume performance in Food Ingredients was mixed. Excluding the impact of the Hillside divestments, volumes were on par with the same period last year. While this represents an improvement compared to the second quarter decline, performance is still somewhat soft in Bakery. All other key segments were stable or slightly growing.

Operating profit per kilo came in at SEK 2.40 compared to SEK 2.33 in the third quarter last year, excluding the Hillside divestment. That is an increase of 3% despite the currency headwind of SEK 0.18 per kilo. If we look at this at fixed exchange rates and again, excluding Hillside, operating profit per kilo increased by 11%, which is a very, very solid improvement. In total, operating profit, excluding Hillside, increased by 3% to SEK 766 million, including a negative currency translation effect of SEK 57 million. On a constant currency basis and excluding Hillside, operating profit was up 10% year-on-year in Food Ingredients.

With that, moving over to business area highlights for Chocolate & Confectionery Fats, Slide 7. In Chocolate & Confectionery Fats, volumes decreased by 8% year-on-year, following a very strong 12% uptick in the third quarter last year, so worth keeping that in mind. Compared to the previous quarter, volumes were up 7% sequentially, mainly reflecting normal seasonality in the year. Overall, the challenging market environment and elevated chocolate prices have continued to weigh on consumer demand. At the same time, the sequential improvement, both compared with the previous quarter and within the quarter may point to somewhat more stable development.

Operating profit per kilo remained strong, increasing to SEK 4.3 compared to SEK 3.95 a year ago. Currency translation had a negative impact of SEK 0.23 per kilo. So at fixed exchange rate, operating profit per kilo was up 15% in the quarter. In total, operating profit came in at SEK 525 million, in line with the same quarter last year, but at fixed exchange rates, operating profit increased by about 5%.

With that, moving into business area highlights for Technical Products & Feed on the next page. Volumes declined by 1% compared to the same period last year, with higher sales in Technical Products, partly offset by lower volumes in Feed. Operating profit per kilo increased to SEK 0.67, up 5% from SEK 0.64 last year. In total, operating profit reached SEK 46 million compared to SEK 45 million a year ago, an increase with about 2%.

With that, we have now covered the 3 business areas. I will now hand it over to Tomas to provide a review of the third quarter financial results.

Thank you, Johan, and good morning, everyone. Please turn to Slide 9. Let me take a moment to explain the FX impact we're currently seeing affecting our results. The effect we refer to here is primarily a translation effect, meaning it arises when we convert profits generated in other currencies, for example, the U.S. dollar or the Mexican peso into our reporting currency, the Swedish krona. As the SEK has appreciated against most of our key currencies throughout the year, the value of those foreign earnings becomes lower when translated into SEK, even though the underlying performance in local currency terms remains strong. So it's important to stress that this is not a reflection of weaker operations or lower margins, but rather a year-on-year comparability accounting effect linked to currency movements.

As you can see on the slide, we faced a strong FX headwind, mainly coming from the U.S. dollar, the Turkish lira and the Mexican peso, against which the Swedish krona has strengthened during the year. But the effect comes from these specific currencies is a result of the magnitude of earnings for AAK in each country, combined with the respective currency movements versus the Swedish SEK.

For the year-to-date period, this has resulted in a total FX headwind of SEK 251 million, representing a year-over-year negative impact of roughly 7% on the EBIT result, mainly driven by the weaker Mexican peso, but also heavily impacted by the U.S. dollar and the Turkish lira. In the third quarter alone, the headwind was SEK 85 million, also representing a year-over-year negative impact of 7% on the EBIT result with the U.S. dollar being the largest driver, followed by the Turkish lira.

Moving to the next slide, Slide 10. Operating cash flow amounted to a positive SEK 542 million in the quarter. Working capital increased, as Johan mentioned before, mainly driven by inventory as well as accounts receivables to some extent, which had a negative impact on the cash flow for the quarter. Inventory increased with roughly SEK 700 million in the quarter, driven by higher volume levels of palm, partly driven by the preparation for the introduction of EUDR at the end of the year.

Accounts receivables increased by roughly SEK 200 million, driven by sequentially higher sales. The impact in the quarter on working capital from accounts payable is very limited as it remained stable during the quarter. CapEx amounted to SEK 321 million in the quarter, comprised mainly of investments related to maintenance, productivity improvements as well as capacity increases and debottlenecking. For the full year, we continue to estimate the CapEx spend at around SEK 1.25 billion. Free cash flow amounted to a positive SEK 221 million in the quarter.

Turning to the next slide, Slide 11. Return on capital employed for the quarter is slightly down from the 22.4% achieved in Q4 '24, ending up at 21.6% adjusted for the onetime restructuring costs recognized in Q2 '25. This was driven by an increase in capital employed and as previously mentioned, mainly driven by the increase in working capital.

When we look at the next slide, the net debt-to-EBITDA ratio was reduced slightly to 0.61 in the quarter compared to Q2 '25, but up slightly from the low of 0.29 in Q4 '24. The increase from the end of '24 is mainly driven by the dividend that we paid in May of '25 as well as an increase in the previously mentioned working capital. The ratio remains at a level that provides us with continued financial stability and flexibility.

With that, I will hand back to Johan for a summary and concluding remarks before we open up for questions.

Thank you, Tomas, and please turn to next slide. Before we move to the Q&A session, I'd like to take a moment to outline how we are approaching the current environment and the actions underway to strengthen volumes. First and foremost, we will not compromise our margin discipline or our leadership in advanced product solutions to chase short-term volume gains. Our focus remains firmly on profitable growth.

As we've demonstrated over time, AAK continues to deliver strong profitability even at lower capacity utilization, proving the resilience of our model and a cost base that remains well covered. That said, parts of the end market remain challenging with high food prices continuing to weigh on consumer spending.

To address this, we are executing a focused commercial push to capture pockets of growth opportunities. We are working plant by plant to identify and drive volume opportunities. Using the spirit of AAK in a decentralized structure, our focus is clear, prioritized regions and key customer segments where we can leverage AAK's broad portfolio, our co-development capabilities and plants with available production capacity to create value for our customers.

A strong co-development example is our recent ILLEXAO EN 10 launch that we did. It's a next-generation CBE super compound that not only offers a high-performing, cost-efficient alternative to cocoa butter, but also reduces material loss for our customers, improving their throughput time and minimizes maintenance time in enrobing, all while maintaining excellent end product quality for our customers' products.

This is a great illustration of how we combine innovation, co-development to strengthen partnerships and help our customers succeed. We will maintain our leadership position supported by a simplified pricing mechanism that improves our ability to close EBIT positive deals faster and more effectively. That's where our focus is.

Finally, we have a strong pipeline of commercial opportunities that our teams are actively pursuing across different markets.

In summary, we are acting decisively, staying disciplined on profitability, leveraging our commercial strength and positioning AAK to deliver on the 2030 aspiration that we have earlier communicated.

With that, I move into some concluding remarks, and then we're happy to take questions. We saw continued profitability gains with several actions underway to strengthen volumes. Excluding the impact from the Hillside divestment, operating profit increased by 9% at fixed exchange rates. Volumes were up 4% sequentially, but down 2% year-over-year, again, excluding the Hillside divestment. Profitability remains strong with operating profit per kilo reaching SEK 2.47.

And looking ahead, we remain prudently optimistic about our long-term potential, and we are fully committed to deliver on our 2030 aspiration. Here and now, we are executing targeted initiatives to strengthen volume performance with a clear focus on commercial excellence and deeper customer engagements.

With that, I hand it back to the operator, and we are happy to take any questions from the audience.

[Operator Instructions] The next question comes from Johan Fred from SEB.

First one on your actions to drive volume growth. Could you provide maybe some more specific details on which regions and customer segments you are priorities -- or you're prioritizing in the sort of short term? And what is the realistic time line to see measurable volume improvement from these initiatives?

First and foremost, I would like to mention that I said in the call, the AAK spirit. I think those of you who follow AAK have seen how we try to be very systematic, hands-on, practical, if you will, whether that is optimizing our cost base or running factory optimization. This is another example where we are leveraging our decentralized structure, being out there in the different countries of the world close to our customers. So we are again using, call it, an AAK very practical and pragmatic model to kind of strengthening the connection between how we source and how we run our plants and then with the go-to-market teams trying to strike a deal that is positive for a specific plant, not just by lowering prices across the board.

I'm happy to hand it over to Tomas for maybe 1 or 2 examples. And lastly, from my point of view, we already see traction in these activities.

And I would also say, as Johan said, I mean, we are a very decentralized company. And these efforts like most of the other efforts that we run in AAK to improve our operations and bottom line are very locally focused. And so is the case here as well, where we look at the applicable markets. So the focus, back to your question, is different in different markets depending upon how the markets are developing and what opportunities we see.

What we can say as well is that we've strengthened the approach on the margin calculation on these type of deals to be more precise and be more competitive in the market, knowing exactly how that will hit our bottom line in a positive way as we take these additional volumes.

Including shorter and faster decision lines in order to strike deals when we have them in front of us.

Okay. Got it. And another question, if I may, on the shea or shea export ban. I understand, of course, that you have a strong position locally, but you state that there is currently no material impact, but still if there's an export ban, there is an export ban, right? So regardless of local relationships and whatnot. So my question really is, are there any countries that have not implemented an export ban that you're able to source from currently? Or do you have enough inventory to not be affected initially? And if so, how long can you -- can that inventory suffice?

Thank you. Great question. And it's a bit of both or all of it. So let me first say that, yes, we -- there are countries where we can still export. So that's what we are doing. But also that we are not only dependent on kernels per se. We can also work with crude shea oil, if you will. So we also have local -- so what we have is we have sourcing presence in most of the countries in West Africa. So that's one strength of AAK. We've been working with this for many, many years. So we're not -- we're absolutely present in many of these countries. That includes having relationships and partnership with local producers that could crush locally. And with that, we can still use oil and then refine all the steps, call it, downstream from the crush, if you will.

So what we are doing is we're executing a couple of activities to, one, secure as much kernels as we can; two, where that's not possible, we then try to do local crushing and export oil or semi refined oil and then we refine further. So that's how we are approaching it. And we -- yes, we also have and had stocks of kernels.

But just to be clear, I think the export bans where they do exist are on kernels, not on crude oil if crushed locally, right? So just to be clear on that.

The target by these countries seem to be to get companies to invest in local crushing and so forth. So it's not to stop shea from being extracted, if you will, shale oil.

The next question comes from Setu Sharda from Barclays.

So I have got 3 questions. The first one is on your CBEs. So you have highlighted the favorable market conditions for cocoa butter alternatives as a margin driver. But cocoa butter prices have fallen sharply YTD. So how exposed are you to the further price normalization in this?

My second question is again related to C&CF margins. You have seen volume pressure and FX headwinds, but still your margins have improved meaningfully in Q3. So can you unpack the key driver behind this resilience and how sustainable are they into Q4 and next year?

And my third question is on the shea kernel export ban. So as you answered that you are procuring the oil. So if the ban continues longer term, what does it mean for your crushing capacity in Europe? Would you need to impair that asset and invest in local processing in Nigeria?

Thank you. We'll take the questions one by one. So first on the CBE market, let's -- I'll go back a little bit to detail out the market dynamics. So we offer a cocoa butter equivalent that replaces cocoa butter in the formulation of chocolate and confectionery products. In chocolate, that is in many countries restricted to only replacing 5% of the ingredient mix, which means that the rest is including cocoa butter. And as you know, the sharp price increases have led to those products being -- leading to higher inflation on these products, higher prices because of cocoa butter mainly. And in other products, it's a higher degree of inclusion.

So I think all in all, you have seen that the consumption of chocolate and the inflation have weighed on consumer demand, which has a negative impact on the underlying volume for the total chocolate and confectionery market, which we have also highlighted in our report. Now the question is -- so I think it's actually positive that prices come down because that means that it releases pressure on the end product price, if you will.

Now the question is with further stabilization or further price reduction, would that come to a point where we would not have a benefit with the CBE versus cocoa butter. Then the prices needs to come down significantly because we have in very, very long history, even when prices were lower on cocoa butter, we have had a cost competitive alternative to cocoa butter with our cocoa butter equivalents. And that's worth keeping in mind.

And for those that have now due to high cocoa prices reformulated into a well-functioning CBE, I see very little logic while you would go back to cocoa butter if cocoa butter is still more costly than a CBE because you have already proven the reformulation and the quality of the product. So I think it's worth keeping in mind that just because they come down, doesn't mean that the opportunity for CBE falls off. But we have been helped, and we have articulated what is very favorable market conditions. But when the cocoa prices have been high, we have been helped probably more in the way that customers are reformulating, now taking the chance to maybe use a cocoa butter equivalent in products where they did not use cocoa butter equivalents before.

So when speaking about favorable market conditions, it's not all about price and margin versus cocoa, but it's also about driving volume for our product range, which has been favorable over the last years.

So continuing with your second question regarding the improved CCF margins in Q3 and how that's maintained. It goes in line a bit what Johan mentioned on the first question in response to that one. The fact that if you look back before the sharp increases in cocoa prices, we were still able, of course, to generate good margins. It has increased over time. We see our internal efficiency programs delivering on a continuous basis, as we've mentioned before as well. And it's not just price that we're talking about here either. The CBEs, for example, as a replacement of cocoa butter is not just a replacement. It's also adding a lot of good functionality into the end product, and that's something that's valued by our customers and something they're prepared to pay for as well.

All right. And then if we go to the third question, which was relating to -- so what about -- what is it with our shea crushing assets if we can't get kernels. Let's be short, we do crush, but only in one site of our 19 sites, we do crush. And if we could not get kernels, yes, that's right, we wouldn't be able to crush and that could potentially lead to a small write-down of asset in that camp. But keep in mind that crushing is only the first step in refining shea oil to the component that we then blend into a solution for CBE or for skin care, by the way, that we sell into skin solutions in the cosmetic industry.

So that is not a significant impact. So we are evaluating and we have done this over many, many years. We're looking at make-buy, where to have our assets. We have invested a lot in our own crushing and refining of shea, that's for sure. But we are continuously looking to source, and we have been sourcing crude shea oil from West Africa also in prior years. Now we might do that to a higher extent or a larger extent. And going forward, we are obviously looking at where to invest going forward and might be that we would end up investing more in West Africa or strengthening partnerships in West Africa. But crushing is only the first step in a value-adding chain to arrive to cocoa butter equivalent at the end.

The next question comes from Priya Patel from UBS.

I have 3. So firstly, you alluded to some softness in Bakery. I was just wondering if you could comment on how much Bakery declined by.

And then in CCF, I just wanted to ask if you could comment on how volumes developed by product. So how did the CBEs perform versus filling and spreads, for example?

And then finally, just on the Fit-to-Win savings, how much impact did you see in Q3? And are you still targeting SEK 50 million by the end of the year?

Great. Thank you. When we talk about Bakery and the softness there, we see in the quarter, I would say, single-digit year or quarter-over-quarter reduction. That continues with -- at the same sort of pace that we've seen throughout 2025, improving slightly, I would say, in Q3, but still negative. And it's the same markets that we've seen the weakness and softness before. We're talking primarily Mexico, but also Turkey and China where we see softness. And we see support from that, particularly in China from Nielsen data of Bakery and the segment coming down quite significantly actually.

Second question was on CCF volumes by product. So when we click down a level on CCF volumes, it's mainly within spreads and filling fats where we would see the decline. Cocoa butter alternatives doing relatively better. So one could argue that even within the portfolio, it is a weaker demand in the lower value-added products and more stable in the higher value-added products, if you look at it from a mix perspective.

And the third question around Fit-to-Win, it's actually progressing very well. We are implementing the program across the organization. We have, for example, seen a 30% reduction in travel so far, which is very encouraging. We're also moving forward on the headcount reduction that we mentioned before, up to 5% of our 4,000 employees. We have seen better traction in Q3 than expected. And the SEK 50 million that we expected to have for the full year of '25 will likely be closer to double what we've seen there. But when you look at the overall cost reduction of SEK 300 million, that's still the expectation by midyear 2026. The pace is just picking up a bit quicker than we expected initially.

The next question comes from Joan Lim from BNP Paribas Exane.

A couple of questions from me, please. So in theory, with lower cocoa prices, it should help chocolate volumes recover. Can you help me understand how long it typically takes to see the benefits of this on end demand? And based on your conversations with customers, have you seen innovation activity start to pick up, especially for the holiday season and into Easter next year?

My second question is on pricing. So pricing has been a significant contributor to top line growth in the past quarters. With vegetable oil prices now coming back down, how much price can AAK hold on to in the more specialty areas like your CBEs? You mentioned simplified pricing mechanisms to increase your ability to strike EBIT positive deals. Maybe you can help us with an example there, please?

And the last one is to pick up on previous questions on volume expectations. So you talked about favorable market conditions for cocoa butter alternatives. Can you give some examples of what you're doing more with customers? How do you expect this to shape volumes for Q4 in 2026? Is there like a stronger pipeline that you are seeing at the moment?

Thank you. So on the CCF, if we start the first question there was, as you said yourself, if you see cost or inflation easing, yes, that could absolutely in a theoretic model, at least should lead to a higher demand or at least consumer not be feeling those price pressure on the shelf in retail, right? So that's positive in that sense. But then when you look at how we supply, if you will, it's back to what I mentioned before. We we supply an alternative. The reformulations are done by the customers with support of us. So that's an ongoing activity. It has been accelerated, of course, with the dramatic increase of cocoa prices that you saw.

But if you're asking now short term, I mean, it's just very recently that cocoa butter came down. So we engage with our customers more on a yearly, quarterly basis. You don't change things overnight. So I don't think we have seen the impact of lower cocoa prices at all yet. And then we'll have to see what that leads to at the end of the day. And I think the best way to look at that is what do you see in communication from the consumer goods products we supply to their production again.

As it relates to the second question on raw material prices coming down to some extent in terms of cocoa butter and so forth, we do see, of course, those changes, but that's something that we've lived with for a long, long time, especially over the last 5 to 6 years where volatility and uncertainty has been much, much greater than what we've seen in the past.

And I would say pricing is a piece of it, definitely not the whole benefit that we've seen so far. We also have all the programs that we've been working with internally in terms of efficiency and so forth driving our EBIT per kilo margin.

But just to make sort of a step back in time a bit, we saw raw material prices come up significantly from 2020 to 2022, then dropping down by about 50%. And then remaining flat for a year, 1.5 years and then now increasing again. We have been able to manage in the past very successfully, continuing to increase our EBIT per kilo, and we expect to do so also in the future.

The focus is not leveraging the fluctuation of raw material prices, but rather bringing the value to our customers and then doing market-based pricing more and more.

And as you know very well, we don't play the market on raw materials, we hedge it back to back as best we can to continue to increase our EBIT per kilo.

And then on your last question, can we exemplify a little bit more? What are we doing in this commercial push? And one piece is about speeding up and simplifying price calculations, making sure that we are connected within the company. So a quicker, call it, connect between sourcing, operations and go-to-market so that we understand where can we have a positive impact on -- get a leverage on fixed cost, if you will, by making sure that we're covering our variable cost and then striking an EBIT positive deal.

Our focus, and we have said that, let's not forget, our financial target is EBIT growth. So we're always trying to drive EBIT growth. And that could be done by margin, could be done by volume or ideally in a combination of the 2. So that's how we focus. And so that's why we are not necessarily prioritizing one or the other, but we're always focusing on can we make an accretive EBIT deal.

But to give you some examples of what we are doing, we are, for example, apart from simplifying price mechanisms and so forth, it's also about targeting customers or commercial push country by country. And one example is that we have, in a few countries, singled out customers where we haven't been that active, maybe smaller customers that we didn't do business with before and structurally going after them. And we've seen some positive uptick quickly in some of those markets. So that's one example.

The other one is what we mentioned here is the co-development with customers. So for example, bringing a new better solution to market. In this case, a CCF for chocolate and confectionery ingredient that is giving that functionality in the chocolate, but the real benefit for the customer here is that we are improving their production. So when doing enrobing, you have always the challenge in a production site where you get a buildup of material, you get clogging, if you will, of your production line. So you need to do maintenance, you need to clean the line and then you start running again. And with this solution, we reduce that downtime because you can run longer before that buildup or clogging becomes a problem.

So in essence, we are offering our customer a quality product for the end solution, but with the capability of running their lines faster, longer, so they could increase their capacity and with that reduce their cost of -- landed cost for finished product. So these are examples of what we are doing to drive volume, both short term, but also in a long-term perspective with innovation.

Just a follow-up. How does the pipeline look for Q4 and 2026 if we are thinking about the holiday season?

We're -- that is for our internal optimization and not for display to competition, but we're working actively with our pipeline.

This is your operator speaking. We are reaching the end of the session. So let's take the last question and move to closing remarks.

The next question comes from Victor Hansen from DNB Carnegie.

A couple of questions. I can try to keep it short. I was curious about Food Ingredients improving sequentially. And could you give us any comments on how you would say you are faring versus the market? And if you, during the quarter saw any recovery or if it was evenly down throughout the quarter?

Yes, it's improving sequentially. And I would say it's -- as we've seen a bit of softness in Bakery, Bakery is also the one coming back. Dairy is continuing to show strength. And to your specific question, yes, it is sequentially. So during the quarter, we saw continuous improvement throughout into September as well.

Okay. Good. And then on Bakery, where you still have some weakness, would you say that this is due to destocking or our Food Ingredients, the Q3 volumes, are they fairly close to current consumer demand?

Yes. So I would say that it's not a structural destocking in Bakery. Bakery is a very local market, first of all. So we supply Bakery globally, but most of the companies within the bakery industries, if you will, they are local players country by country. So what is more dominating here is the reduction in China and Turkey and a few other countries where we serve. That is more the weigh on Bakery than a structural, call it, bakery across the world dynamic.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you. Thank you for all your questions and interest. Again, we delivered a strong quarter with 9% operating profit growth at fixed FX, and we remain focused on our activities to also drive volume going forward. Thank you for your interest and for your questions today.

Welcome to the AAK Q2 2025 Report Presentation. [Operator Instructions] Now I will hand the conference over to the speakers, CEO, Johan Westman; and CFO, Tomas Bergendahl. Please go ahead.

Thank you. Good morning, everyone. Thank you for joining us, and thank you for your interest in AAK. With me here today to review our second quarter results, as you heard, is Tomas Bergendahl, our CFO.

Please turn to Slide #2. This is what we will cover today. Quarterly highlights, selected events, business and financial update, followed by some concluding remarks from myself. The presentation is scheduled for around 45 minutes in total, including a Q&A session at the end. And with that, please turn to Slide #3. Just a reminder, this presentation includes forward-looking statements that come with risks and uncertainties. These are our views on future events and financial performance, but actual results may differ. So please keep that in mind when going over the material.

Now over to Page or Slide #4, starting with quarterly highlights. Let's look at the overview of our financial performance or performance in the second quarter of 2025. As you have seen in the report published earlier this morning, we delivered strong operating profit growth despite a slight decline in volumes. Operating profit increased 16% at fixed exchange rates. This excludes the earlier communicated Hillside divestment as well as the SEK 250 million restructuring cost that we took in the quarter related to our Fit-to-Win. Tomas will talk more about that later in this presentation. Volumes declined by 2% in the second quarter compared to the same period last year. This excludes the Hillside divestment.

As a reminder, the Hillside divestment refers to last year's sale of our North American foodservice business. This business represented around 5% of AAK's total volumes and is, therefore, weighing in on the reported year-over-year volume development in the second quarter. This will continue and will persist throughout 2025.

Turning to the underlying volume. While performance fell short of our long-term aspiration, it was relatively resilient given the current market conditions. Overall volumes declined by 2% with a mixed performance across categories. As an example, dairy delivered good growth, whereas volumes in Bakery and Chocolate & Confectionery declined. The profitability was strong, however, with operating profit per kilo reaching SEK 2.37 in the quarter. This represented an increase of 8% or even 18% at fixed exchange rates and excluding the restructuring cost on the Hillside divestment I earlier talked about.

This improvement was partly driven by continued internal optimization, including productivity and procurement enhancements at our oil refining plants and partly by better portfolio and price management with continued higher sales of Specialty Solutions. We've also seen favorable market condition for cocoa butter alternatives as well as a positive product mix further supported -- which further supported our second quarter profitability.

If we turn to cash flow. Operating cash flow was positive at SEK 524 million as the impact of price changes tapered off. Net debt to EBITDA stands at SEK 0.63 following the annual dividend payment in quarter 2. While return on capital employed, ROCE reached a solid 21.9%, excluding the restructuring costs. All in all, a strong second quarter result with underlying absolute growth in operating profit of 6%, building on a 27% increase in the same period last year, including a significant headwind from negative translation effects regarding FX due to the appreciation of the Swedish krona. With that, please turn to next page.

Few selected events to highlight before we move on. First of all, our Annual General Meeting was held on May 8 in Malmö, Sweden, with shareholders representing 75% of the total votes, a strong turnout with thoughtful questions from investors, both ahead of and during the meeting. We highly value the dialogue with our engaged shareholders, and will continue to welcome further constructive exchange going forward. Secondly, we recently published our Principal Adverse Impacts or PAI report for 2025. It outlines AAK's ESG performance through a set of standardized metrics, helping to increase transparency and making it easier for investors to assess our progress. This marks the third year in a row that we are releasing the PAI report, following positive feedback from the investment community.

Report is also part of our broader effort to help investors better understand our overall sustainability approach. The full report is available on our website. I'm also pleased to announce that Nese Tagma has been appointed President, Sourcing, Trading and Sustainability. Nese brings extensive international experience from the agri food sector, having held senior roles across sourcing, trading and general management in markets such as France, Turkey, Romania, Belgium and the Netherlands. She succeeds Tim Stevenson, who is retiring after a long and successful career with AAK. We all thank Tim for his outstanding contributions and wish him all the best in his well-earned retirement.

Lastly, I want to briefly address the fire that occurred at our Karlshamn site on the night of June 19. The incident affected 2 external tanks at the fatty acid plant, which is used for nonfood production. Fortunately, the fire was quickly extinguished and the situation was very well managed. No one was injured and the damage was limited to the insulation on the tanks. All other operations at the site continued as normal, and there was no material impact on our financial performance for the second quarter. Any disruption to volumes was limited and an investigation into the root cause is currently ongoing.

So with that, please turn to the next page to review our performance per business area. On Page -- or Slide 6, we head into Food Ingredients. Volumes were down 3% year-on-year, mainly due to lower sales in Bakery. Including Hillside, volumes declined 11% year-on-year. Despite the volume decline, the business delivered a strong margin performance. Operating profit per kilo increased to SEK 2.47, up from SEK 2.30 in the second quarter last year, again, excluding the Hillside divestment. This came despite the currency headwind of SEK 0.23. At fixed exchange rates and excluding Hillside, operating profit per kilo grew by 18%.

In absolute terms, operating profit, excluding Hillside increased by 4% to SEK 764 million despite a negative currency translation effect of SEK 72 million. At fixed foreign exchange rates and excluding the Hillside divestment, operating profit increased by 14% year-on-year. So overall, despite the softer volumes in Bakery, the business area continued to perform well through a strong margin delivery. With that, if we turn to next page, we go into Chocolate & Confectionery Fats. Volumes in the quarter were down 7% year-on-year, following a strong 14% growth in the second quarter of last year. This decline was primarily driven by Asia, the Middle East and Africa and Europe, while the performance in the Americas was roughly flat. But within the Americas, we had a really good performance, good growth in Latin America.

Operating profit per kilo was strong, increasing to SEK 3.95 despite the currency headwind of SEK 0.32 per kilo. At fixed foreign exchange rates, operating profit per kilo increased by 20%. So in summary, the business in CCF continues to demonstrate resilience and strong profitability even in a challenging market environment where chocolate consumption remains subdued due to the impact of high cocoa prices. Next slide, please, Technical Products & Feed. Volumes grew by 18% compared to the same period in 2024. This was driven by higher sales in Feed, while Technical Products remained flat. The strong year-over-year performance or growth reflects low comparison due to a production disruption last year. So it was last year that was low, call it, a bit more back to normal.

Operating profit per kilo reached SEK 0.37. Absolute operating profit came in at SEK 25 million. With that, we have now covered the 3 business areas, and I will hand it over to Tomas to provide an update on the optimization programs as well as further details on the second quarter financial results. Over to you, Tomas.

Thank you, Johan. Good morning, everyone. Please turn to Slide 9. As many of you recall, we presented our updated 2030 aspiration at last year's Capital Markets Day in Carlson with a clear focus of reaching profitability of SEK 3-plus per kilo and outgrowing the underlying market on volumes. The road map to achieve this remains largely unchanged and is centered around 6 key programs. One, production process optimization. Two, portfolio and price management. Three, procurement excellence. And four, cash to grow.

In addition, and to ensure we stay on track to deliver on our aspiration, we also introduced 2 additional programs at the CMD. Number five, cost performance. And number six, commercial and innovation excellence. As announced in connection with the Q1 2025 results, we have launched the cost performance program called Fit-to-Win. Before diving into Fit-to-Win, I'd like to provide a brief update on the current status of the broader program portfolio. Starting with production process optimization or deep dives as we call them internally.

We're now in the final stages of completing deep dive #9, which is in China, and we now cover a total of 73% of the current production volume. The local team in China, together with the central expertise team expects to present their findings and conclusions by mid-August. The next step will be to develop a prioritization matrix to rank all of AAK's sites and identify where there's still potential for cost and capacity optimization.

Based on this, we'll decide which site to focus on next, which could mean revisiting a site that has already gone through the deep dive process to focus on identified but not yet realized opportunities or moving on to a new site depending upon the estimated potential. We expect this to be a reiterative process. As previously communicated, the portfolio and price management program has successfully concluded its project phase. And while efforts to optimize our portfolio mix and pricing will continue, the tools and processes have now been implemented across all relevant sites. And the focus is now to maintain the achieved structure and drive results.

Procurement is now in the second phase of its rollout. In June, we moved accountability for the operational performance of procurement to the decentralized regional teams, while continuing to provide global support through the development of category management for key spend areas. Recent milestones on this program includes rolling out our global supplier code of conduct and aligning our systems for the source-to-pay process.

Next, we will complete the implementation of our procurement spend analysis tool to further strengthen decision-making, performance and follow-up. The Cash to Grow initiative is now entering completion from a project perspective with the most recent workshop held in China in June of this year. We expect to finalize the project phase during the second half of 2025. By then, all major sites will have been reached and key initiatives launched to structurally improve working capital. That said, the work continues at local levels to realize the identified actions as effective working capital management remains an ongoing priority. And we have yet to see the full impact of the program materialize in our numbers.

Commercial innovation excellence. At the start of 2025, we began rolling out our global CRM system as part of the commercial excellence journey. With one unified tool, we're connecting application experts with local sales and customer innovation teams. This is improving both the speed and quality of our customer interactions, helping them to innovate and drive efficiencies with AAK solutions. The feedback from customers supports our strategy of building a more differentiated specialty-based portfolio that, as a result, enables our customers to make their products better. Please turn to the next slide. Turning to our cost performance program and provide a brief update on our Fit-to-Win program. I am very pleased to report that we're on track to deliver on our target of approximately SEK 300 million in annual savings.

For 2025, specifically, we expect, as previously announced, to realize around SEK 50 million of the SEK 300 million, with the full run rate of the SEK 300 million anticipated by mid-2026. A small part of the SEK 50 million was reflected in our second quarter results with a larger portion impact expected over the remainder of the year. As previously communicated, this process is being driven by a combination of organizational simplification, efficiency improvements and targeted initiatives across the business as well as a headcount reduction of up to 5%.

In the second quarter, we recognized a onetime restructuring cost of SEK 250 million related to the program, which is in the upper range of what we guided during the introduction of the program in April. This has been booked under group functions and reflects our commitment to make the necessary changes to position AAK for long-term success.

As illustrated on the left side of the slide, the transformation is centered around moving towards a future that is more aligned and performance-driven while maintaining our decentralized model. This journey will enable us to realize both cost efficiency and capacity improvements. Next slide, please. Operating cash flow in the quarter amounted to a positive SEK 524 million. Working capital increased slightly and had a negative impact on cash flow in the quarter. Accounts receivable increased and were impacted by higher sales and increase in overdues.

Inventory increased slightly in the quarter as well, mainly driven by a mix effect impacted by higher levels of palm inventory. Overall inventory levels by volume were down. Account payables increased in the quarter, partly driven by timing of sourcing activities. Excluding these activities, account payables still increased in the quarter. Paid taxes increased, largely attributable to timing effects between quarters. Other working capital was negative by close to SEK 350 million, mainly driven by changes in accrued and prepaid expenses, partly related to taxes and lease costs. CapEx amounted to SEK 376 million in the quarter, comprised as in previous quarters, mainly of investments related to maintenance, productivity improvements, capacity increases and debottlenecking. For the full year, we expect CapEx of around SEK 1.25 billion. Free cash flow, as you can see, amounted to a positive SEK 157 million.

Please turn to the next slide. Return on capital employed is in line with the last few quarters following the continued strong development of operating profit and the level of capital employed that remained fairly stable throughout the quarter. This resulted in a return on capital employed of 21.9% adjusted for the onetime restructuring costs and at par with Q1. Excluding -- or including items affecting comparability, the IAC, the SEK 250 million, return on capital employed was 20.9%. Please turn to the next slide.

The net debt-to-EBITDA ratio increased to 0.63, excluding the IAC, up from 0.43 at the end of Q1. The increase was mainly driven by the SEK 1.3 billion dividend paid in May of this year. The ratio remains at a level that provides us with continued stability and financial flexibility. Including the IAC of SEK 250 million, the net debt-to-EBITDA ratio was 0.66. And with that, I will hand it back to Johan for some concluding remarks before we open up for questions. Johan, go ahead.

Thank you, Tomas, for those details and clarifications to our performance. And now just to wrap it up on the last page before we move into Q&A. Our operating profit increased by 16% at fixed exchange rates, excluding the Hillside divestment and the onetime restructuring costs related to our Fit-to-Win program that Tomas just explained to us. This was delivered despite a 2% decline in volumes, also excluding the impact from Hillside.

So profitability remains solid with operating profit per kilo, excluding the restructuring costs, reaching SEK 2.37. So even in a more challenging market environment, where global trade dynamics and softer demand continue to impact parts of our business, we are seeing clear resilience in our financials. As we look ahead, we remain prudently optimistic about AAK's long-term potential, and we are committed to delivering on our 2030 aspiration. At the same time, we continue to focus on driving volume growth through stronger commercial execution and deeper customer engagement. All in all, a strong quarter from AAK.

And with this, we hand it over to the operator, and we are happy to take questions from the audience.

[Operator Instructions] The next question comes from Johan Fred from SEB.

First one on the volume development in Food Ingredients. It's a difficult question, I know, but do you have any feel for the underlying market volume development in the segment during the quarter? And to what extent do you think that your volume decline reflects market softness versus sort of company-specific factors?

Thank you, Johan. If we dig into Food Ingredients, I think, firstly, Food Ingredients, as you know, is built up by many subsegments. And this is again where we see the strength of AAK. We stand on many legs. It's bakery, it's dairy, it's infant nutrition, special nutrition, health-related ingredients, plant-based ingredients, et cetera. So that is all within Food Ingredients. When we look at the bigger volume markets, it's around bakery and Dairy. And Bakery was down, as you saw, while the performance in dairy delivered growth.

When we click a level down on that, it's partly driven by market and partly driven by our own decisions within Bakery. We know that we already last year, and we have commented this before, pretty much said no to some contracts due to the profitability of those contracts, and that impacts volume negatively, right? So it's partly driven by our own actions to focus on the high value-added products in our portfolio, as we have commented, aligned with strategy and partly driven by softer market conditions. And then obviously, there is a bit of competition you win and you lose over time, but we are absolutely committed to turning bakery into long-term growth.

Okay. I know in Q1, you quantified the sort of decline to 50-50, i.e., half of it was attributed to a soft end market and 50% of talking about the decline in bakery here was towards your shift towards more value-added specialty solutions. Is -- could you say that the development in Q2 is fairly similar to that of Q1?

Yes, it is. It's very similar.

Okay. Got it. And the second or maybe third at this point, if I may, on CCF, volumes declined by 7% against a tough comp, of course, and Q2 being typically a seasonally smaller quarter for chocolate. But could you give us any color on what you're seeing in terms of your customer behavior? Is the decline primarily driven by a weaker consumer demand? Or is it inventory destocking from customers or something else? What are you seeing?

There are a few things in the mix. And I think everything you mentioned is there, right? We still see, of course, in the total market, we still see or have had high inflation in this market due to higher cocoa prices and other ingredients also for that matter. So there's no doubt that we have seen inflation hitting the shelf in retail and obviously impacting consumer and consumer behaviors. There's quite a lot of dynamics in that. But again, we have a broad portfolio.

So what we see in the customer -- from a customer lens is that we see increased activity due to this and to make sure our customers focus on how can they best manage this. And that is both focus on cost avoidance, which can lead to shifting to our type of ingredients, but also being focused on the cost and price of those ingredients, of course, but also seeing increased innovation and reformulation into trying to drive categories within chocolate and confectionery.

So there's quite a lot of moving parts here, where we, again, focus on being there for our customers, really focusing on how we can improve their products and help them reformulate and/or offer a cost-efficient solution while also protecting and optimizing our portfolio. And I think you have all of that within this mix. So dynamic market, volumes are down. You can see that in parts of the segment. But at the same time, AAK has a broad portfolio. And also, we are relevant in many markets, as we mentioned here, a bit softer in Europe and U.S. and EMEA, but on the other hand, strong in Latin America, where we have a very strong position.

The next question comes from Benjamin Wahlstedt from ABGSC.

So perhaps following on Johan's first question there. Your volume development improved compared to the previous quarter in Food Ingredients. I assume Easter, although perhaps not an event that accelerated globally, of course, gives fewer delivery days, for example. Would you say it's a sign of better underlying markets or too early to say?

I think we -- I think I need to go with it too early to say to some extent. We -- I often remind about business-to-business is our demand signal is to production of food or Chocolate & Confection Technical product, right? So we deliver to factories. So yes, the number of days we can produce and deliver has an impact to us just like many others, where Easter fall has a bit of an impact. But remember, our deliveries linked to these festivities or volume up or volume down is always earlier.

So our deliveries for Christmas comes much earlier than Christmas because it is delivering to a factory that will produce for Christmas and likewise for Easter. So it has an impact, but it's not as easy to say that with Easter in Q2 or Q1 or 1 day more or less in production is the main explanation. I think we need to look at that in more detail. But I would say it was a bit dynamic in Q1 and it's a bit more stable at the moment.

All right. You also spoke about the deep dive task force presenting a prioritization matrix in August to move forward with deep dives, as I understood it. And I was wondering, have you found incremental learnings doing -- while doing the deep dives that mean all plants will be visited again, do you think? Or should we expect limited sort of incremental impact from these deep dives from here?

Thank you. Tomas?

Yes. No, thank you for the question. I think, of course, we started with the larger units, right, going for the biggest production volumes first and then rolling down the different facilities. I expect this program to continue to deliver throughout '25 and '26. The matrix is there basically as a prioritization to not just continue with the remaining 10 sites, but take a look back, as we've mentioned before as well, when we do one of these deep dives, we identify 20, 30, 40, 50 different initiatives, but not something that we can focus all at once on.

So we pick the ones with the highest impact. But with this matrix and the review is to go back to also look at the ones where we've been to see do we have bigger potential in a unit with already identified actions not fulfilled than we do with going into a unit where we haven't been. So that's the prioritization to make the good choice, if you will. But I do expect it to continue to generate good positive gains throughout '25 and '26, and then we'll take a look from there.

And maybe to add to it, we come from an AAK which was very decentralized and with local operations reporting into local P&L sheets, which we still have. But with these programs, we are, one, finding opportunities, but we're also building a muscle around operational excellence. And we are, at the moment, investing in that, both from a new person leading our global operations team. We are building best practices across the globe.

So we're moving into a more structured continuous improvement way of working that many companies have had before us, but we came from a very decentralized structure. So back to this picture of alignment, I also expect it to continue to deliver value, but maybe more quality at the site and service levels, right? So it's not just finding cost reductions is also doing better in production as a whole.

The SEK 50 improvement in EBIT per kilo from doing these deep dives, would you dare sort of guess or estimate the improvement potential from here through 2026, for example?

I would say that was the calculation on the to date, if you will, at the CMD to get us from the SEK 1 to SEK 2 per kilo. Looking forward, as I said, I think my belief is that we'll see continuous benefits and contribution, but I'm not going to put a number on it. That's part of the matrix evaluation that we're doing now. And then it's also a bit of a fluid situation, of course, we don't know exactly what we're going to find when we go into a new site or go back to look at identified opportunities that needs to be evaluated. So positive contribution, but difficult to put a number on it.

And absolutely, I mean, our formula or the ingredient list, as we have said before, to reach our SEK 3 per kilo aspiration, it is linked to continuous focus on innovation and portfolio management, but it's absolutely also a continued optimization of our costs, including procurement, including the Fit to Win and including continued deep dive activities. All of them are included in the ingredient list for SEK 3 per kilo.

The next question comes from Matthew Yates from Bank of America.

I'd like to talk a little bit about the chocolate business and unpack the numbers in the quarter because your volumes are arguably broadly down in line with the end market. And you talk about a favorable environment for CBEs. And we can obviously see in your margin that I'm guessing mix is beneficial.

Can you just help me understand a couple of things? Why is the environment leading you to capture value, but not necessarily volume? And of the sort of incremental profit growth, which is very, very impressive, how much of that comes from the broader group-wide measures that Tomas was outlining around all the initiatives on productivity and costs, et cetera, versus what's actually happening in the chocolate market and what you're doing for customers around innovation and reformulation, if that makes sense?

It makes a lot of sense and includes the full, call it, strategy and execution for our business area, Chocolate & Confectionery Fats. So very, very good. I'll try to break it down as far as we can. when we say favorable, yes, we are relating that to high inflation, cocoa prices are high. Our portfolio is, in essence, targeting replacement of cocoa butter one way or the other over time, and it has been so. We have the cocoa butter equivalents, but also our filling fats, coating fats, et cetera, has over time been introduced into the chocolate & Confectionery market replacing cocoa butter.

So with a sharp increase, that is what we mean favorable market condition, meaning there are a need for our customers to manage costs, looking at their portfolio, also a need, as I mentioned before, to focus on innovation, finding new products to put on the shelf in retail where they need support from a strong company like AAK to see what can be done with ingredients, what can we do to create these new products and what is the formulation needed for those to be successful.

So why -- back to your question, so why are our volumes not better than? Well, we still live in a competitive environment with others also being able to deliver and the volumes are absolute per se, right? What we do, do is that we see a positive development in the ask for, for example, CBEs, cocoa butter equivalents. But we also have a broad portfolio next to the cocoa butter equivalents with filling fats and coating fats, et cetera.

So we pretty much follow the chocolate market, then with opportunities to perform better than that, as we've seen over time, we were up 40% last year, now lower. But it's also an optimization play within AAK back to what we have commented broadly. We look at the total portfolio within Chocolate & Confectionery. We try to strategize around where we want to win. where we are bidding for a deal to win it and where we might leave a deal if the prices are not where we like them to be in terms of our portfolio mix. So this is a mix of a lot of tactical strategic and business decision at the end of the day.

So we can be slightly better or lower than the market in a given quarter, but we are always, always trying to focus on getting the best out of our portfolio and optimize our usage of our assets, if you will. And that's how we also try to take advantage of the market conditions that we see, if that makes sense.

And my view is still it's a very price competitive market out there, right? The gains that we have made, I see those as going back to the programs that we just outlined and the continued development of those, including price and portfolio management, but specifically also what we do in procurement, what we do in the deep dives and so forth.

So the program focus is very important to our continued profitability improvement. We've also seen a bit of a shift in the market, at least from our perspective, we don't have full insight, but we see that some of the larger producers maybe are struggling a bit more than the regional ones on the big global brands that -- due to inflation and so forth. And that is a move that we're also following very closely, and we are adjusting to that as a supplier in the market as well.

And when you look into the second half, obviously, customers don't reformulate or launch new products instantly. When you think about the sort of activity levels and the extent to which that's in your order book or backlog, have we already seen the benefit of this cocoa inflation play out in your numbers? Or is there still more to come through over the coming quarters?

Obviously, the situation, if you will, is here. Everyone knows about cocoa prices being sharply up and although coming down a bit, still high in a historical level. So that is here. But have we seen the end of reformulation, the end of innovation with new -- I don't think so. There's always going to be just like we are optimizing our portfolio and optimizing the way we deliver our customers, the big global companies as well as local companies in chocolate and confectionery, I believe we'll continue to use innovation, product development to drive the market and drive consumption, if you will. And that opens up opportunities.

And at the same time, with these cost levels, there is still a benefit for them to look at the cost per ingredient list. And with that comes opportunities. And at the same time, as Tomas said, we're also in a in a market where there is competition, right, for the absolute volume at the end of the day. So I don't think it's over with reformulation, no. But how much is there to give...

Your next question comes from Setu Sharda from Barclays.

I have 3 questions. So the first one, I think, has been partially answered, but like on the CNCF volume outlook, like you had minus 7% in Q2. So what was the growth of CB in that? And how much was the impact of the weaker end market? And how would you expect this to evolve in H2? And the second question would be like on the CBE, can you talk to the pricing trend in CBE like your EBIT per kg in CCF is up nicely despite volume decline.

So are you like increasing pricing of CB given increased demand? And secondly, does the pullback in cocoa butter prices have any implication here on the outlook on this front? And the third question would be on like the food ingredients, specifically on the special nutrition, where you continue to see decline, but this is somewhat odd to what other ingredient companies are seeing like there is some growth in fan formula, and they have seen some recovery over the past 6 months on better birth rates in China. So do you think -- are you losing share over here?

Thank you. And I'll take -- since the first question was on CCF, I'll just add a comment to the question before. I think also when we look ahead, we do have a positive view on chocolate and confectionery indulgence over time in a global perspective. So I just want to mention that also. Back to your questions on the CCE -- within CCF and CBE. So was a decline in CBE driven by the end volume in the market, but CBE did better in relation to that, better than other segments within. With regards to the pricing trend, we do not comment on that. That is things we keep close to our chest.

We do try to optimize our portfolio always and be differentiated depending on market and specific products. With regards to Special Nutrition development, a large portion of our Special Nutrition is indeed infant nutrition. And yes, there is a dynamic here where we supply both to, call it, non-Chinese players where the volume goes into Europe, the Americas, but a lot of it still goes into to compete in China. And so there, you have competition from international players into China competing with the Chinese local players. We then operate as an ingredient player selling both to the production in Europe and elsewhere and to production in China. And we have seen the Chinese players for consumer products to be strong, and we have also seen that local ingredient players perform well in China.

So there is a competitive landscape where we lose a bit of market share to international players, if you will, or their share into China, and then we compete on the local market. So all of that plays into the mix.

So just a follow-up, like the cocoa prices has come down quite a bit. So does this have any implication here on your outlook like on CBEs?

I think it absolutely has an impact. I think what I personally think is the most important piece is that with a bit of relief on the cocoa prices, we get a relief on the inflation, if you will. And I think that's positive from a consumption point of view and for that should be positive for our customers. there is still an opportunity to use our ingredients, which is replacing cocoa butter. But as you know, by legislation, you can't replace all of the cocoa butter with alternatives. So cocoa butter will be an important ingredient within the total mix of chocolate and confectionery.

So if you have a bit of a price relief there, I think that is positive for the cost of goods with our customers and with that, helping them to perform in retail, if you will. So I think that should be, if anything, positive. I don't think we have reached anywhere close to the point where it wouldn't be a cost-efficient play to use cocoa butter equivalents and other ingredients to offset the price of cocoa.

The next question comes from Priya Patel from UBS.

I just had one. So in the press release, you mentioned that you're actively working to initiate volume growth through stronger commercial execution and deeper customer engagement. Could you please walk us through the details of this and when we could see an impact on volumes from this?

Thank you. Great question. This is -- so the way we operate in AAK is that we -- I mean, we're a global company. We have a fantastic organization, a decentralized structure with passionate colleagues operating -- we really operate locally, if you will. We have a global play in a few segments, but we absolutely act locally with a decentralized structure. And that has a lot of benefits, and we have shown that through resilience through market dynamics, disturbances over the last 5 years, if you will, and we have still been able to execute -- and I think that is a real strength of AAK. But it also comes down to how do we then execute tactically and strategically given certain market dynamics.

And this is one example where we are now enhancing the capability in the organization to allow the go-to-market teams to be equipped with better tools, better knowledge, if you will, on how to price in the market and how to derive or land into a best optimal play for a local market around the local factory. So to take a few examples of that, we are implementing a CRM system to have across the globe, same system dealing with local and global customers and the insights and knowledge and learnings we get from that.

So that is, call it, equipping the go-to-market team with better tools than what we've had in the past. But we're also trying to educate the go-to-market teams on how does a factory work? This is linked to the deep dives and the optimization plans that we're running. It's not all about the cost and the pricing. It's about how we load the plant and get leverage over the variable cost, given the certain fixed cost structure in a certain plant or a certain market.

So we're getting into much more tactical decision-making where we maybe in the past have been a bit more operating by a calculation model for pricing, if you will, trying to link it more to the cross-section of go-to-market operations, our supply chain to find the best way possible to win volume that at the end of the day, will be accretive to our margin. And that hasn't always been the case in the past. It's been quite local execution with a bit cost-plus type models into our system. So in essence, we are strengthening a making better happen in our go-to-market playbook. -- without going lengthy, that is what we mean.

And then this goes towards, of course, our aspiration to grow faster than the underlying market. And this is part of that drive, if you will, back to your second part of the question.

Yes. And then last but not least, we're also investing more now in our commercial development and innovation, both functional area. We are structuring that. We're building a strength in that organization. We get more outside-in insights. We're launching more products now than we have done before, and we continue now to invest more in innovation. That is not something that will have an impact in Q3, right, but something that again helps drive towards the 2030 aspiration.

The next question comes from Victor Hansen from DNB Carnegie.

A couple of follow-ups to many previous great questions. I'll start off with a big picture question first. So you run out the decentralized model, local production in all regions, a model which has benefited you and many other Swedish companies historically. Now you're talking about becoming more aligned. And I'm curious, for instance, you mentioned here a bit more regional activities rather than local, possibly implementing sign-offs on larger contracts, et cetera. My question is, how do you want to balance the centralization aspect versus the control aspect?

That's a great question, something we -- this is actually in the heart of what we drive in the company. We are driving a culture program. which is about how do we want to operate AAK going forward. And we are absolutely clear that we want to keep a decentralized model. But in order to maximize how we leverage opportunities in the world, we also see the opportunities of being more aligned on how we tactically execute, for example, running operational excellence. Why wouldn't we take best practices from different plants that have a similar setup to run them better. That is not about centralizing.

That is about sharing best practices and doing what's best for AAK. And maybe, Tomas, you can add a bit to this, but this is absolutely something we work hard on, keep a decentralization but benefit from our global structure.

Yes. And to me, the answer is very carefully, right? We're trying to find that balance. But I would say to us and the culture in the company and how we move forward on that journey is it's -- to me, it's a lot about how we do this, not necessarily where we end up exactly on the decentralized, centralized scale, if you will, right? It's how we do it, where we give the local teams a lot of the sort of support, but they are responsible to come up with the improvements to drive those actions to deliver on those actions, right?

So there is no transfer of responsibility at any point in this. It's more of a coaching mentality and bringing front for front the local talent on these items, right, and putting some structure into it. But the absolute responsibility is always with the local teams.

And we're adding a much more focus on the performance culture. So it's holding people accountable, expecting performance, but also enabling that performance with what we said in optimization, better tools, best practices across the globe, but absolutely local execution.

And with my sort of 4 years in the company, what I've never heard in AAK is someone raising their hands and saying, you know what, I don't know why this is going wrong. It's not my responsibility. I've never heard that. You always hear, yes, it's our responsibility. Thank you. We'll take on the best practices, the structure and everything, and we will deliver. And I think that's the aim in my mind, right, to stay with that mentality, always the local responsibility, never pushing the buck to someone else, but always taking charge.

Okay. Perfect. A couple of more questions. We've had lots of chocolate questions already, but just a brief follow-up. It seems like the Latin American market has fared better for you. And I was hoping that you could talk a bit about your development here. Did you manage to grow in Latin America? And was it due to initiatives or more related to the market? And is there anything here that you can use that you have -- that is specific for Latin America that you can use to support the other regions?

Thank you. Yes, put some more color to it without going into our strategic playbook, if you will. But we have a strong portfolio, first of all, which is a global portfolio for Chocolate & Confectionery. And then it's about the local -- different local markets and who is there, what kind of customers, what kind of needs. We have a strong setup in Latin America, especially in the southern parts of Latin America and a strong position and a strong value proposition to our customers.

So we are performing well over time, and we have done really well recently. And yes, we are growing in that part, while as we mentioned, we have seen the volume decline being in other markets. So we've done well there. We're absolutely cross-sharing experiences and what is -- what are we executing well. what is part of the portfolio, what is part of our position, what is part of how we manage our customer base and try to cross leverage that. Part of that customer base is, of course, a global customer base where we have the same customer in Latin America as we have in the U.S. and Europe and Asia. But part of it is also local customers where we learn from how we can execute. So absolutely things to learn from and a strong execution.

And to me, this is a great example in AAK of the organization taking the local responsibility and taking charge of their own preconditions in the market and try to differentiate themselves versus competition. I think that's where we see the big positive play in Uruguay and in Brazil and in Argentina.

Yes. And we have invested, as you know, since some years now, but building on that, we invested in a greenfield plant in Brazil. We have a strong setup in Uruguay and the combination of the 2 makes AAK strong in that region.

Okay. Perfect. Another question from me. Your leverage remains low. Is M&A still your preferred way to allocate capital? And have you made any changes in how you approach M&A in the last couple of years since we haven't seen that many deals?

Thank you. I think the short answer is confirming, yes, balance sheet is strong. M&A a preferred option? Yes. We haven't changed our approach. We remain positive to use capital for M&A, and we are active in the market. But as I said before, there are not that many deals that are up for play in our market.

So we are active. We are nurturing that. We are active meeting with potential partners for an M&A or a joint venture or cooperation one way or the other. So let's see what we have, but we are absolutely positive to that and nothing has changed over the last couple of years.

No more than that we're getting more professional and structured in the process, I think, right? That's a big difference over the last few years, I would say.

Perfect. A final one for me. Tariffs, you say no tariff effect. But I'm wondering here, is it -- is it already? Or could it help drive reformulations? And yes, would that be negative or positive in your eyes?

Yes. Obviously, difficult to forecast what kind of change would happen. It all depends on where the tariffs lands and what impact it would have to certain raw materials. If we try to -- I try to simplify it as much as possible. Number one, what we sell in the U.S., we produce in the U.S. It's almost all of it, right? And that is the starting point. Then the raw materials that would potentially get a tariff that we import, the market has to import them. There is no one-to-one replacement in the U.S., if you will.

So the whole market, our competitors will have to import the same type of ingredient with the same type of tariff. So in essence, that would most likely then lead to a higher cost for the material coming into the U.S. and then it leads to something we need to forward to customers and into retail eventually. Then, of course, if you have different tariff levels between different countries from where we source raw materials, then it might lead to needing to optimize sourcing more from one country than the other, and then you start getting into a lot of scenario play, right? We are good at these things.

We are well positioned in the way we source, and I think we're capable to move with this. Speaking of -- so that is, call it, in general, why we don't expect a material impact to our business. We have been dealing with volatile raw material markets for a long time, and we're used to dealing with that in the food industry. If we then look at reformulate, yes, there could be -- if certain raw materials are cheaper than others, of course, there could be a reformulation play with our customers where they say that, okay, can we reformulate out of this raw material using another ingredient where the cost position would be different. that typically leads to opportunities, and that's where we are very strong.

Now it could be that a competitor sits with a better supply chain on a certain raw material than we do, then it would be negative. But in general, I would argue that with our strength around ingredients, the understanding of food and food applications, we typically can benefit from reformulations in any of the food segments.

The next question comes from Oskar Lindstrom from Danske Bank.

Two questions from my side. First, on pricing. I mean, you've seen or said that you have lost some market share potentially in the bakery segment due to what I interpret as mispricing and the overall weak volumes that, I guess, everyone in the market is experiencing is typically a situation where people become a little bit more aggressive on pricing. Should we expect pricing to come down for you and be a negative impact on overall organic growth for you, let's say, in the second half of this year? That's my first question. Should I go ahead with the second question as well?

Maybe we can take the first question. That is not how we operate, right? So we focus on driving EBIT growth in absolute terms. That's our #1 financial target. And with that comes the need for trying to optimize our portfolio, trying to develop our playbook. And I wouldn't call our bakery volume loss due to kind of mispricing or so. It's always a decision we need to make at any given point in time. And if we feel that a certain deal that is on the table and the customer is asking for XYZ and there might be a competitor coming in with a low price, and we don't feel that, that volume is worth that price, we would say no, right? And vice versa, in other cases, we win it.

That is always a day-to-day tactical decision we try to make, and that's where we're trying to, again, improve the way we go to market and improve the tools that we equip our go-to-market teams with so that we can even be more tactical in that. But I wouldn't call it mispricing was active decisions. And that's how we will continue to operate going forward. So when we try to win in the market, we are going to, of course, look at pricing in terms of what it needs to win volume, but we're also always going to calculate what does that mean for our absolute earnings at the end of the day.

And with that, we remain committed to driving earnings growth in absolute terms and margin growth. But again, that has to be a tactical playbook industry by industry and plant by plant.

All right. My second question is on volumes. So down 3% like-for-like in Food Ingredients and 7% in CCF. Are you able to say sort of how much of that is due to destocking, which is likely to be temporary? And how much of it reflects sort of a shift in underlying consumption?

No, I think our -- as we said before, our visibility is somewhat limited in this. We -- my take on is not destocking that we see at the moment. It's underlying demand in most segments, driven by higher inflation and similar things, right? So that would be the primary driver as I see it.

What we have seen, though, I mean, we do feel that customers have been with the whole inflationary environment, you have seen more activity. And with that, a bit shorter times in terms of how long do you lock in a contract. So a bit shorter contracting times. And you can maybe argue that, that could be a bit of destocking behind that, that you don't want to sit on too much stock and you don't want to buy too much stock at high prices too early. But it's very difficult to say whether that was really destocking or not.

What we do know is that there is more frequent conversations about where are things moving and not moving a bit shorter in terms of how you contract in order to continue to optimize and hope -- I'm thinking hoping for prices to come down a bit. So a bit more active, but I couldn't say that it's absolute destocking, probably a bit when we first saw the tariff impact and so forth, we saw a bit of like stop and hold a bit, and that led to a bit of destocking, but I'm not sure it's destocking today in quarter 2.

Maybe if I could just a follow-up on that. I mean we've seen the cocoa price come down quite a bit, at least from recent highs. It's still up significantly versus where it was sort of 2023. Is that having any impact on customer behaviors and willingness to place orders?

Yes, it depends. I mean there is a lag in this, right? We saw that when the cocoa price went up as well. Our view or our understanding is that most of our customers, they don't buy cocoa spot, if you will, right? They have longer supplier agreements. So any change to price, it takes a while to funnel into their reality, if you will, right? It did that on the way up, and it will likely do so if price now is coming down to some extent.

As Johan said, I mean, we have seen earlier in the year, at least the way we saw it, we saw a bit more hesitant customer behavior going a bit more short term. That seems to be stabilizing a bit now. And let's see during the second half if there is a tendency to go a bit longer from our customer perspective, if you will, when it comes to ordering and putting framework agreements in place and so forth.

And also maybe staying on bakery. I mean we see -- we talked about walking away from a few contracts, but with the same customer, we also have been able to win back volume in next quotation and so forth. So yes, we're in there all the time, and we are one of the important players in this market. So always trying to optimize and win business at a relevant margin level.

This was the last question at this time. So I hand the conference back to the speakers for any closing comments.

Thank you. Again, thank you for listening and absolutely thank you for a very engaging conversation, question and answers in the last session of this. We conclude a strong quarter 2 2025. Thank you for listening.