AAK Aktie

Welcome to the AAK Q2 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.

Thank you. Good morning, one, and thank you for joining us for today's call and also for your interest in AAK. With me today to review our second quarter results as our CFO, Thomas Bergendahl. Also joining us for today's call is Niall Sands, President, Commercial Development and Innovation and a member of our Executive Committee. .

Niall is here to share additional perspective on our commercial development annuation agenda as well as the role of our Cocoa and Confectionery Fat Solutions in the current market environment. Good to have both of you with me on the call.

With that, please turn to Page #2. We will cover quarterly highlights, selected events and the business and financial update, followed by concluding remarks. The presentation is scheduled for 45 minutes in total, including a Q&A session at the end. Page #3, as usual, a bit about the 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, let's move to Slide #4, the quarterly highlights for Q2. Market conditions remain cautious during the second quarter, broadly in line with the business environment we saw in the first quarter.

Following a strong start to the year, both volume and credibility were somewhat softer in the second quarter. However, for the first 6 months, both volumes and operating profit at fixed currencies remained above the last year, representing a solid first half performance. Grew volumes declined by 1% compared with the second quarter in 2025. The decline was mainly driven by dairy and food service, which continued to be affected by challenging market conditions.

In addition, we had some production-related challenges at our site in cotton that negatively affected volumes in food ingredients and Technical Products & Feed. The estimated impact on group volumes was approximately 1 percentage. Production at Carlson has since returned to normal levels.

Volumes in chocolate and confectionery effects declined slightly, but continued to outperform the broader chocolate market, which remained challenged. Operating profit per kilo amounted to SEK 2.25, a decrease of 5% compared with last year, excluding items affecting comparability. The decline primarily reflected price pressure in food ingredients together with the production-related challenges in our site costs. The core some challenges had a negative impact of approximately 2 percentage points on group operating profit per kilo.

Currency effects were neutral. Profitability in Chocolate & Confectionery Fats remained strong in the quarter. Operating profit declined by 6% compared with the corresponding quarter last year, excluding items affecting comparability. This was driven by the lower operating profit per kilo and slightly lower volumes.

The production-related challenges in Carlson amounted for approximately 3 percentage points of the decline. Currency effects were neutral on operating profit. Our operating cash flow remained strong and amounted to SEK 1.081 billion, supported by profitability and an improvement in working capital.

Net debt to EBITDA was at 0.68, reflecting our continued strong financial position. Return on capital employed amounted to 20%. And with that, please turn to the next page. Turning to a few strategic and sustainability highlights from the quarter. AAK became the first company to achieve gold status in the sustainable coconut charters assurance system audit with a score of about 95%. The result reflects strong performance across governance, traceability, risk management, reporting and verified chain of custody processes.

This recognition supports our continued work to strengthen responsible coconut sourcing, improved traceability and support small holder pharmas, farmers and help prevent deforestation. It also provides our customers with independently verified assurance on supply chain transparency and the diligence supporting their own sustainability reporting and compliance requirements.

In May, we held AAK's Annual General Meeting in with shareholders representing 75% of total votes. The AGM approved the proposed share buyback program as part of our updated capital allocation framework. The program amounts to SEK 1 billion per year over 3 years subject to annual AGM approval and is intended to support long-term shareholder value while maintaining financial flexibility.

The AGM also approved an extraordinary dividend of SEK 3.85 per share. Finally, we announced a collaboration with Savor, a food technology start-up to explore a new type of fat solution for dairy and bakery applications. The partnership combines Savors carbon to fat technology with AAK's expertise in liquid chemistry and application development.

The aim is to develop novel ingredient solutions that deliver on taste, texture, functionality while supporting supply chain resilience through more diversified sources. The collaboration is initially focused on niche, but growing customer demand, particularly in the U.S. and Europe for innovative fat solutions produced without the need for animals or farm lands.

With that, let's turn into the next slide for a review per business area, starting with food ingredients. Volumes were flat compared with the second quarter of 2025 with mixed performance across our segments. Dairy and food service declined, while either parts of the business offset the majority of the decrease.

Volumes were also negatively affected by the production-related challenges at the calls on site. Operating profit per kilo amounted to SEK 2.14 compared with SEK 2.487 last year, representing a decrease of 14%. Currency had a slight negative impact at fixed exchange rates, operating profit per kilo decreased by 13%.

The decline mainly reflects the price pressure in Food Ingredients, together with a negative impact from the production-related challenges also. Operating profit decreased by 14% to SEK 658 million, mainly due to the lower operating profit per kilo. Currency effect on operating profit were neutral.

And with that, let's turn into the next page and the highlights for Chocolate & Confectionery Fats. Volumes declined by 2% compared with the second quarter of last year, even though we continue to outperform the broader chocolate market, which remained challenging. Operating profit per kilo increased by 11% to SEK 4.36. Currency effects on operating profit per kilo were broadly neutral, and this was achieved despite a modest negative impact from the production-related challenges at the cost of site.

Overall, operating profit increased by 9% to SEK 491 million, driven by the higher operating profit per kilo and partly offset by the lower volumes. Currency translation was neutral. And next slide for highlights in Technical Products & Fleet. Volumes declined compared to the second quarter of last year with a mixed performance across the 2 segments.

Technical Products grew while feed declined. The decline in feed was mainly related to the production challenges at the Carlson site following the annual maintenance of where production remained offline longer than expected.

Production since restarted and returned to normal levels, and we do not expect any lasting impact beyond the quarter. Operating profit per kilo was at SEK 0.37, broadly in line with last year. And overall, operating profit decreased by 3% to SEK 24 million. With that, we have now covered the 3 business areas. And before handing it over to Thomas for a review of the second quarter financial results and an update on our 2030 strategic initiatives, I would like to invite Niall to provide some perspective on how the dynamics in the chocolate market are impacting our business. Niall, please.

Johan, please turn to the next slide. Given the interest in cocoa butter equivalents and cocoa water, I'd like to spend a few minutes on how we think about this from an AAK perspective. Our first glance cocoa butter and cocoa butter equivalents may appear to address the same need delivering a snap, gross and melt that consumers expect from grid testing chocolate. But from a specialty fats perspective, we are fundamentally different. The key is in the triglyceride composition. Nutshell cocoa butter is a strong benchmark. Its functionality is largely driven by a narrow group of triglycerides, primarily POP, POS and SOS, which crystallizes in a way that gives chocolate it's characteristics structure chain and wealth.

However, cocoa butter is also a natural raw material. This means it comes with variability linked to origin, season and crop conditions and therein potential for significant price and supply volatility as we have seen of late. This is where cocoa butter equivalents play an important role. In AAK, we do not view CBE simply as substitutes, but rather as precision designed specialty fats.

By fractionating, blending and even enzymatically adopting selected beds of oils and fats, we can closely replicate the key triglyceride profile of cocoa butter while also tailoring functionality for specific customer needs. This gives us the ability to support customers in areas such as crystallization speed, hardness and snap, bloom resistance, viscosity and performance for all climates as well as production efficiency. Our objective in AAK, therefore, is not only to match cocoa butter, but to optimize performance for each customer's product, process and market requirements.

Cocoa butter will continue to play an important role. It offers authentic flavor release, strong life feel, consumer familiarity and premium position. But at the same time, CVs offer a complementary value proposition of more consistent quality, improved supply resistance, functional customization and better process control.

The important point is that this requires deep lipid chemistry and application know-how. Small differences in triglyceride composition can have a truly meaningful impact on tempering behavior, crystallization and long-term bloom stability. This is where AAK has a clear role to play. It's our heartland.

Our competitive advantage is not simply supplying oils and fats, but helping customers engineer for desired crystallization rates and functionality. By combining advanced vegetable oil processing, application expertise and a deep understanding of triglyceride architecture, we help customers maintain sensory quality, improve productivity and to build more resilient supply chains. So ultimately, the discussion is not simply cocoa butter versus cocoa butter equivalents. The real question is how can we engineer fat functionality to deliver the consumer experience expected from chocolate while giving manufacturers greater process control, supply resistance and cost competitiveness. For AAK, this is where we believe the value creation really lies.

With that, I hand it back to you, Johan.

Thank you, Niall. I think this provides a good perspective on the role AAK can play in what has been and likely will continue to be a fascinating and dynamic in chocolate market. As Nialls explained, AAK's cocoa butter equivalents are not simply substitute for cocoa butter. They are specialty-fat solutions where functionality, consistency and application know-how are critical. For our customers, this is about more than managing input cost. It is about maintaining the right consumer experience while improving process control, supply resilience and flexibility in formulation. At the same time, we should also recognize that market dynamics and raw material movements can create some pressure on margins over time, which makes our focus on value-added solutions and disciplined execution even more important. .

And with that, I will hand it over to you, Tomas, for a review of our financials. Go ahead. .

Thank you, Johan. Good morning everyone. Please turn to the next slide. Operating cash flow amounted to a positive SEK 1.1 billion in the quarter. Working capital decreased driven by a reduction in inventory as well as accounts receivable, an increase in payables, all contributing to a reduction in overall working capital.

This was partly offset by negative cash flow from other working capital. The decrease of inventory in the quarter of close to SEK 200 million was driven by lower inventory levels, mainly related to seasonal inventory primarily see. CapEx amounted to close to SEK 400 million, comprised mainly of investments related to maintenance, productivity improvements, capacity increases and debottlenecking.

The CapEx spend for the full year of '26 is expected to be slightly higher compared to '25 close to SEK 1.5 billion in line with indications provided in connection with the last 2 quarterly reports. The increase of CapEx spend in recent years compared to historical levels is mainly related to larger installations such as the Buy Borders in Denmark and the new food service plant in Sweden.

Free cash flow for the period amounted to a positive SEK 681 million. Next slide, please. Return on capital employed remained strong at 20%, slightly below last quarter. Year-over-year, the return on capital employed is down from 21.9%, mainly prompted by working capital, largely driven by an increase in raw material prices as well as an increase in fixed assets.

Next slide. The net debt-to-EBITDA ratio increased from 0.39% in Q1 to 0.68 in Q2, on par with Q2 last year. The increase in the ratio since Q1 2026 is mainly driven by dividends and the initiation of the share buyback program approved by the AGM, totaling roughly SEK 2.7 billion in the quarter to some extent, offset by the positive cash flow for the quarter.

Next slide. As many of you will recall, we introduced our updated 2030 aspiration at our Capital Markets Day in Carlson in -- at the core is a clear objective to achieve operating profit per kilo of SEK 3 plus and outgrow the underlying market on volumes. Together, this will support continued delivery of our financial targets to grow EBIT by an average of 10% per year over time.

The road map remains centered on 6 key strategic programs, production process optimization, portfolio and price management, procurement excellence, working capital management and cash generation through the cash to grow program, cost performance, including our Fit to Win program as well as commercial and innovation excellence. Before handing it over to Niall, I'd like to provide a brief update on the current status of the broader product portfolio, project portfolio, sorry. As it has been 1 year since the last update in connection with the presentation of the Q2 '25 results.

Starting with production process optimization, we have completed the ninth and final deep guide in China at the end of last year. The next step is to scale the learnings from all 9 deep types across AK through 1 global operational excellence program with the continued focus on reducing inefficiencies, waste, complexity and value leakage. This effort is currently ongoing.

Portfolio and price management has, as previously communicated, completed the project phase and has been an important contributor to the profitability improvement that we've achieved since 2021.

The tools and processes are now implemented across the relevant sites and the focus is on sustaining the structure and the results already achieved. Similar to the production process optimization track, price management is now being formalized into 1 global excellence structure. Procurement excellence also continues to progress well with category management and category strategies playing an increasingly important role in our procurement decisions.

Cash to grow has now entered into its next phase with ownership of transitioning to local organizations within AK. Despite significantly higher raw material prices over the past 3 years, the program has delivered structural improvements, including lower inventory levels and reduced overdues.

Turning to cost performance, which includes Fit-to-Win. The program performed well in 2025, but has in the second quarter of 2026 falling behind plan. As a result, we have not yet reached the targeted SEK 300 million in annualized savings, currently at SEK 200 million, on par with the level achieved at the end of Q1 2026.

This area requires renewed focus going forward. Finally, turning to commercial and innovation excellence. I will hand it back to Niall to give an update.

Thank you, Tomas. We are seeing progress across a number of key business processes, capabilities and systems. On the commercial side, the commercial excellence initiatives are focused on strengthening price management, contract management, and go-to-market capabilities to enhance our customer experience as well as internal knowledge sharing and better product play cycle management. Our pricing maturity assessment is underway and to help shape the road map for how we further develop price management towards 2030. In Contract Management, a global standard process and governance model have not been identified supporting by a 2030 improvement plan.

We are also investing in commercial capabilities. A creating customer value, CTV program has been relaunched, including a needs-based value proposition framework. All commercial teams are enrolled and a dedicated ambassador team isn't pleased to coach and develop the program locally after training to extend and embed the go-to-market skills more broadly across the globe. The 2026 customer survey also shows encouraging progress.

Customer satisfaction improved in every region with a Net Promoter Score increasing by 13 points to 43. Our customers continue to value AAK highly for team expertise, local innovation, service and sustainability. That's embedded in our recognized customer co-development approach. To improve knowledge sharing, we are developing an AI-enabled commercial cockpit to support commercial operations with launch planned for Q3.

In parallel, investment has been made in a product late sale management system design now underway ahead of initial launch in November this year. On innovation, we are building on our strong customer co-development model while broadening the agenda towards the AAK inspired innovation anchored in science, technology and application development and validated market insights.

We also strengthened the innovation governance through a revamped NPD dispute process with a similar process for new technology development being established later this year. Intellectual property also remains an important part of protecting value from our discovery and innovation in AAK. And in 2025, we -- and in 2025, we faced 31 new partner applications across our core platforms.

Taken together, these initiatives are helping build a more systematic and scalable commercial innovation platform, supporting stronger customer relevance, better execution and progress towards our 2030 aspiration.

With that, I'll hand it back to Johan.

Thank you, Niall, and thank you, Tomas. To summarize, we continue to make progress on the alignment and optimization projects that we outlined as a part of our 2030 aspiration. These initiatives are not isolated projects. Together, they are about building a stronger, more scalable operating platform for AAK, improving how we run our plants, how we manage our portfolio and pricing, how we produce, how we manage cash and working capital, how we control costs and how we strengthen our commercial and innovation capabilities. .

Several of the programs have now moved from project phase into a more embedded way of working. That is important because the real value comes when these capabilities become part of how we operate every day across the group. We are doing this in line with AAK's decentralized but aligned operating model. With clear group-wide priorities and methodologies while keeping ownership and execution close to the business.

Taken together, this gives us confidence in our continued journey towards the 2030 aspiration to grow volumes ahead of the underlying market and to reach an operating profit per kilo or more than while continuing to deliver on our financial target of around 10% EBIT growth over time. Please turn to the next slide for a few concluding remarks before we open up for questions.

Let me conclude by summarizing the quarter. We delivered resilient volumes, softer profitability and strong cash flow. Looking at the first half as a whole, the performance remained solid despite the cautious market. Both volumes and operating profit at fixed currencies were ahead of last year, although the second quarter was softer following a strong start to the year.

The softer performance in the quarter was concentrated in a few clearly identifiable areas, mainly dairy, price pressure include ingredients and the production-related challenges at the Carlson site, which has now been resolved.

Shopping effects continued to hold up well despite subdued chocolate consumption and lower cocoa prices. With that, I will hand it back to the operator and open up for questions. Go ahead.

[Operator Instructions] The next question comes from Benjamin Wahlstedt from ABG.

I'll start by directing question to Niall. So I was wondering perhaps if you could discuss the road innovation could have in turning the trend in Dairy, specifically, perhaps where your technical advantage compared to in the CCS segment appear to be quite a bit lower. .

Indeed, dairy innovation and what we can do there. Obviously, our focus is in key application areas around process cheese, ice creams, et cetera. And therefore, whenever we look at the functionality that our customers are looking for as well as the experience customers are wanting that is very much in line with what we deliver when it comes to the experienced pillar of our innovation platform and others around texture, smoothness, creaminess, melt, et cetera. So our inherent understanding of application development with the essential role of that. One of our key focuses is to enhance the overall customer experience of those applications, in particular, in dairy.

All right. And then turning to the Carlson impact. Are there any sort of residual costs, any catch-up production or any insurance recoveries which you expect in H2? Or is Q2 sort of the full P&L effect? .

Clear question. I hand it on to you, Tomas. .

Yes. Thank you for the question. No, the impact -- the negative impact that we saw in Q2 was the full and final impact of that extended stock. So -- we don't see any continued additional costs into Q3 in the second half. On the other hand, the volume that we were not able to deliver to our customers will not be moved into the second half, either that has been resolved by the customers to other suppliers and so forth. So no further effects from it. .

The next question comes from Johan Fred from SEB.

Follow-up on the -- well, the cause and disruption and the decline in EBIT per kilo in food Ingredients. Do you think that you could sort of elaborate a bit on how much of the EBIT per kilo decline was driven by a cost of disruption specifically and how much was due to underlying price pressure and the follow-up there, what's the run rate in food ingredients in terms of EBIT per kilo based on this in Q3? .

Thank you. And with regards to run rate, we do not give forward-looking guidance, specifically like that, but still being able to answer your first question, as we highlighted, it was a bit half in relation to how much was coming from Carlson, how much was coming from the competitive landscape. But Tomas, maybe to expand a bit .

Yes, the impact from the extended maintenance stop in calls and as we mentioned before, on volume was about 1 percentage point on the overall group. The bulk of that ends up as calls very much focused include ingredients and TPF. On the total bottom line EBIT impact on the group. We're talking about half of the drop from last year, about 3 percentage points, about SEK 40 million, mainly also divided by the majority into food ingredients and also into TPF. .

Okay. Got it. Very clear. And I'll have to choose my questions wisely here. But on the high animal fat availability in Europe and the Americas, which was a clear headwind into Q2 for food ingredients -- what is your visibility on when this potentially normalizes? Are you seeing any early signs of a reversal here in H2? Yes, that's my second question. .

Yes. I mean very difficult to give a complete forecast. We have seen variability in the past, if we go back in a longer history where meat prices fluctuate and things adjust over time. At the moment, the situation is as we outlined. I don't think it's going to be a quick change. But I don't know, Niall, if you have any further comments to that.

Just building on, I think that's for reflection, John, in the sense that we do see strong cooking formulation, reformulation, innovation coming through great across many segments of the supermarket and further this surplus. So with this protein consumer trend very much in vogue -- we expect this to be run for a little longer.

But keep in mind that as with many of our products, there are certain products where there is an interchangeability between dairy and nondairy fat, if you will. But in many cases, our solutions just like the chocolate and Confectionary, also in Bakery and other products are linked to specific applications, specific functionality and the specifics of the chemistry, the lipid chemistry that we stand for like Niall highlighted. So -- and that's what it is.

So this is more where it is more of a one-to-one opportunity for a customer to switch between the 2. And then from a longer-term perspective, we want to also review from a sustainability perspective. Is that the path to go or we need to adjust that also from a sustainability perspective as more in a longer-term perspective.

The next question comes from Setu Sharda from Barclays.

So I have a question on CCS. Our margins improved materially despite weaker volumes and a slight decline in but alternative. So what's doing the heavy lifting here? And given like Q2 is supposed to be a seasonally weak quarter. So do you -- do you think we could see continued margin improvement in CNCF through the year?

And also earlier, you had mentioned about the sweet spot of cocoa prices. If you can remind what was it? And is it still applicable? And my second question is on -- about the food service, which remained like weak, particularly in the U.K. Are you seeing any stabilization in demand trends? Or does the consumer environment remain challenging as we move through the second half? And did you see margin pressure in food service channel as well .

Thank you. Clear. So first of all, commenting on the CCF and the performance in the quarter. We have seen over several quarters, a strong margin development, right? So we are holding up well given the total shop at market. So total Cocoa and Confectionary demand is slightly more subdued than what we present in terms of volume. And then looking at the margin, we have seen being able to deliver strong results on the back of our total portfolio optimization on the back of our strong position within cocoa butter equivalents, et cetera.

So that is kind of the explanation to why Q2 delivered wallet delivered, right? And then with regards to the sweet spot, I think it's important to keep in mind, we'll get -- I'll give you the hands to what the sweet spot was, but I'll tell you more conceptually the dynamic in that which is that as long as if cocoa butter goes too high, and that is something that you have seen absolutely now in recent 2 years. If cocoa butter goes too high, then the total prices of cocoa and confectionary Solutions on the shelf in retail become so high that it might impact the consumer demand, and that's what we have seen, if it gets too low, then -- and it gets really low, then you get into the situation where customers could ask themselves, why would I use substitute 1 way or the other. And that is where we come into a sweet spot, right, not too high because it then impacts consumer demand, but also not too low because then you could start challenging whether you should use an alternative or not.

Having said that, as Niall explained very nicely, many of our solutions go into the shop life and protection space also have functionality and the improvement of the consumer product that we can do with cocoa butter. So that's important to keep in mind that, that goes for like forever going forward. And then the sweet spots can move up and down depending on what the overall market development is on the underlying raw materials. But the sweet spot was before between 5 and 6. So Tomas?

And going into your second question on foodservice. And as you correctly stated as well, we see the weakness within foodservice in the U.K. Our stand-alone foodservice business has primarily focused on the U.K. market and in Scandinavia, and the markets are developing quite differently.

Scandinavia has had a stable quarter with good margins. In the U.K., the situation is somewhat different. The general economy in the U.K. is challenged, and we see quite a deteriorating market in terms of dining out and pubs and so forth. This has been a trend for some time, and this is also affecting our foodservice business in the U.K. We don't see any immediate recovery of this. My estimation is that we will continue to see a challenged environment in the U.K. for the remainder of the year.

The next question comes from Erik Sandstedt from Kepler Cheuvreux. .

A couple of questions, please. Could you elaborate on the source of the pricing pressure in food ingredients that you saw in this quarter? Is it purely competitive pricing or anything else like customer mix, contract renewals, input cost dynamics and so forth.

Could you repeat that, please?

I'm just wondering if you can share some more details on the pricing pressure that you saw in Food Ingredients in the quarter. Is it just competitive pricing basically?

Yes, it's a competitive environment, which we have commented on before that while we have very, very strong position like Niall also highlighted our customers rank as high. At the same time, the whole industry is looking for an offset to inflation, optimizing, et cetera. And that's where we are always up for competition in basically all the segments, specifically to food ingredients, in this case, in the dairy subsegment, it is very much linked to most of the dairy fast development that we just talked about.

In Bakery, it is more pressure across the board, if you will, with subdued volumes and customers seeking for price offset when they can, and that's what is -- so very bit boosted, but a portion that more generally across the world.

Is there a risk that the pricing pressure that you now see in food ingredients eventually translate also in the CCS business? Or are those sort of 2 completely different businesses and end markets.

Thank you. Great question. it's not a translation impact between the 2. It is absolutely different than market, different application, different recipes, et cetera. And in many cases, different customers, although some has both. But there's no translation between the 2. As we said many times, of course, we're not alone in any of the segments where we operate.

So there are different market dynamics and different competitive landscape dynamics in the different submarkets that we delivered to just like there is difference in bakery as far as different to CCF. And also within CCF, there is a difference between different kinds of solutions, but there's no translation between the 2. So we need to look at them stand-alone.

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

I'd like to follow up really on the last gentleman's question around this concept of pricing pressure because -- it feels to me that there's been a step change in the last 3 months here. And I appreciate you've always recognized it's a competitive environment, but I can't recall has ever seen such a big shortfall on the results versus what you've reported today.

So is it really down to the recent development in dairy has been the delta? Because I'm inclined to think that demand of bakery has probably been weak for the best part of 2 years. So I'm struggling as to what has suddenly changed. And then as a follow-up, and I don't mind if Tomas or Niall take it.

When you were talking about portfolio and price management. I apologize, but honestly, it felt like a lot of management consultancy speak, and I'm struggling as to what you are tangibly doing in terms of actually running the business. So can you just maybe in more layman terms, elaborate on what you're doing and what you think the benefits of that will be in due course.

Thank you. I appreciate that. And with regards to price pressure again. Yes, there had an impact. Also, they caused some production-related challenges we had an impact, but absolutely not the whole. So -- we have seen it and -- but it is increasing, if you will, the focus on cost optimization and price-focused conversations with our customers in the total food ingredient space. But again, specifically dairy, boosting, if you will, by the lower dairy prices bakery a bit broader and then less with the call some production-related issues that we had. On the second part of the question, Tomas, could you be a bit more specific on the things we're doing in price management and portfolio .

Yes. Thank you, Matt, for your question on price management. I fully appreciate the question you have. But -- as you know, AAK is and has been a very decentralized organization. This is over time, created different processes and structures and how we do things. This also applies to our price management structure. .

In some areas, we are better in some local areas, we are better at managing this than in other areas. What we've done now is that we're standardizing how these prices are set. And we're also pulling it together into pricing groups where we look at the local demand and supply and become more, I would say, structured and analytic in our approach to how we set prices to customers based on the current and local conditions when it comes to demand and supply. And that's what's being introduced now as an excellence program across the group into each of the local sales forces.

Got it. And maybe finally, and I appreciate you don't tend to give a specific guide, but presumably, that pricing pressure is continuing into Q3 in the second half and as such, does that make 10% profit growth this year probably unlikely.

Sorry, the last part of your question, fell off. I heard the first 1 that make the 10% growth and that...

Yes. Appreciate that's a 10% midterm target. But as it pertains to this year, I think you're at what plus 3% in the first half. any reason to believe in second half acceleration on that .

Yes. Let's be very clear. I know you know this. So first, will not give a guidance for the 2026 outlook for the second quarter. But obviously, with 3% year-to-date, if you will, then to deliver 10 would be a very significant change into the second half, but our target is not set by every quarter to deliver 10% or even every year.

It is a 10% EBIT growth over time. And as we all know, in business, market dynamics can change internal challenges or opportunities may occur, right? So our ambition is set at the 23 ambition, which aligns well. We're growing 10% year-on-year. And we have been growing more than that in the past, and there will be periods like this where it's not like that, but that is how we set that target. So is as much as I can say, I think.

The next question comes from Matthew Abraham from Berenberg.

First question just relates to the CCF division. You spoke about wage broader chocolate and market demand. Just wondering how do you see that evolving through the second half based on your customer discussions.

And then the second question just relates to CBA volumes. Just wondering if you can disaggregate that portfolio into the 3 components with respect to the decline in volume that you called out through the quarter and how you see volume for the CBA portfolio playing out to the second half based on what's contracted with customers .

May I ask you, I think the first question was clear. How do we see the CCF demand moving into the second half. If I understood your question correctly, you were asking about our comment on that CCF has been weak overall in the market. and whether that continues in the second quarter was -- sorry, in the second half, was that correct? That's the first question. .

That's right. Yes.

Yes. And then the second question, I didn't hear it fully. Was it about the CBE specific or what was that?

Just wondering if you can disaggregate the CBA portfolio into the 3 parts and comment on what part of the portfolio is driving the volume decline in the quarter? And then also just comment on how you see volume for the CBA portfolio evolving through the second half of the year. .

Okay. So the complete cocoa butter alternatives and then break that down. Okay. Thank you. Got it. So for the first question, what we have seen is what I commented on before is that due to various reasons around elevated cocoa prices, sugar input costs, significant inflation in retail for the whole shopping protection space. And we have seen weaker market conditions for some time. And so we also saw in Q2. Difficult to say when and how that will normalize and change and start moving upwards again, maybe during the second half but very difficult to give a complete forecast on that. But with regards to the second question, Niall, maybe a few comments on the -- on how we see the portfolio of cocoa butter alternatives .

Yes. Overall, when you look at the specifics, CDs are holding up really well. in terms of portfolio. So strong performance, I would say, from from CDs given the external market as Johan eluded to you, because there's continued softness in chocolate. And where we are mainly seeing a challenge in cocoa butter alternatives with our CVS portfolio.

So that is more a challenge when it comes to the competitive CDs holding up nicely year-on-year.

The next question comes from Joan Lim from BNP Paribas.

Just a couple from me. So first, on the Fit-to-Win program. Can you provide more color on why the program has fallen behind plan? And do you still expect a total run rate of $300 million by 2026. Essentially, I'm trying to think about the phasing in the second half -- that's my first question. And then maybe a bit on CCS product mix. So you said Spreads and filling set, you saw slight growth, whereas cocoa butter alternatives declined -- can you remind us how different is the mix between the 2 categories?

And if we continue to see a decline in cocoa butter alternatives in H2, will that have an impact on EBIT in H2. and then the last question is on the trajectory of raw material prices. Given the trajectory of palm oil prices, would you expect this to help with the price pressure in the second half? And any comments on the impact of El Nino on the business in terms of cocoa prices and palm oil prices?

Thank you, I'll pass part on those questions to Tomas and Niall. Maybe if I start with the last one. Obviously, we source raw materials from almost across the globe, ranging from palm oil in Southeast Asia and Latin America and the RAC in Europe, canola, we source, et cetera. So any weather impact could impact raw material change.

However, we have not seen a massive impact in terms of more elevated or more significant fluctuation in the raw material market than we've seen during the last 5, 6 years for other reasons, right? And we are used to dealing with that. We don't see, at the moment, a kind of crop shortage on our main raw materials, but price fluctuations could be there, but that is where you've seen us dealing with that in the past.

And that is probably the answer to whether elevated palm oil prices could help offset. I don't think it necessarily helps when things move a bit up and down, you always have a reason to renegotiate and that could be a help, if you will, but it would also be adding to the tough environment, depending how things move. So I wouldn't put too much emphasis on that we are we are always seeing price fluctuations in palm oil and other input materials and we have to manage that, whether that is, of course, by COVID or transport or policymaking in Southeast Asia or potentially El Nino. I hope that answers that part of the question. And then I hand it over to Tomas for the Fit-to-Win impact. .

Yes. Thank you, Johan. Fit-to-Win mentioned before, we have reached about SEK 200 million of cost reduction that we did so in Q1 and held it stable during the target was to reach EUR 300 million by the end of Q2, which, as I mentioned before, we have not succeeded with as of the. The main deviation that we see is on the people side versus the pure cost reduction, where we've seen good progress.

What remains on the people side is connected to a bit more structural activities. So it's taking a bit longer than we expected. And if you look at the pacing, it's difficult to say, but I would say we're looking at another 6 to 12 months to pull that in. In addition to that, we're also looking, of course, given the current environment externally on what can we do in addition to what the plan of the SEK 300 million was and we can come back to that in later quarters with an update.

And thank you, Tomas. And then into the last part of your questions with the CCF linked. Niall, will you be willing to give some color to that?

Yes. So CCF overall, we see, as I said earlier, a very solid performance for our CE portfolio year-on-year. where we are challenged is a little more on the CBS from a volume development perspective. But otherwise, in terms of value-adding portfolio within CCF, it is ring filling some spreads -- and again, the performance there is very solid year-on-year.

And you also had a question on on the mix within the portfolio. I think it's worth keeping in mind that we typically don't see a massive swing between -- in the mix because these are solutions that go into products that are consumed every day, and you don't see reformulations every day. That ends up going out in the retail shelves, et cetera, and then a massive shift by consumers. These shifts come with friends and come with behaviors, right, what's not necessarily massive mix change between Q2 and Q3 and so forth.

The next question comes from Oskar Lindstrom from Danske Bank. .

Yes. Two questions from my side. The first 1 is following up on the sort of CCF division and the weakness that you and strengths that you see in different parts of it. Is that sort of or volatility? Or is that driven by in any way, the drop in the cocoa price? Or is it just sort of a general market trend that's causing these these shifts. That's the first question.

The second question is on the weakness in the dairy segment. And I think you also said in the bakery segment, are you at all able to sort of shift volumes to other categories? Or are those sort of volumes locked into those segments? Those are my 2 questions.

Thank you, Oskar. I take a little bit of taking the second question myself, and then Niall on the CCF. So first part of it -- sorry, the second question was about Darian whether those volumes are locked in. In general, you could say that it's quite a good flexibility in our setup, because our refineries and where we produce our value-added regions, do produce many of the ingredients in the same factory.

So if we get more capacity for having, let's say, lower volume in 1 area, we can absolutely load it with other type business. And that is obviously something that is ongoing all the time. And that's part of the optimization that you heard us talk about before, that also on in a factory, we try to optimize it towards a mix with higher value added more complex products that also delivers better functionality to our customers.

So we can absolutely shift and we can absolutely load with new volume. But obviously, in a shorter perspective, that we need to be a dialogue with customers and turning into a contract and the delivery. So it doesn't change over weeks, but it's absolutely an opportunity to fill and that capacity is not locked in typically, especially not within are and vapor.

All right. I hope that answers that question and then Niall from a CCS mix perspective.

Yes. So from -- maybe more specifically, Oskar on the cocoa butter place that you alluded to. -- cocoa butter has dropped from an all-time high. But even today, very high, relatively speaking, if you look at historical cocoa butter prices. And just to put a bit of a lens on it. Since our Q1 earnings call, cocoa butter market prices have actually doubled where today, they're sitting around $12,000 per tonne. So we continue to be highly volatile. And hence, this offers the opportunity for AAK to support consumer and customer affordability with CBEs as well as the functionality piece that I mentioned in the pitch earlier.

While at the same time being but continue, call it, cost into with unpack prices in retail at the end of the day where we've already seen most part of that inflation, of course, but still on that level.

The next question will be the last for today's conference call. The next question comes from Victor Hansen from DNB Carnegie.

Squeezing in my 2 questions. Starting on dairy. So yes, you touched upon this today. Low common prices are negative for their business. So I'm wondering what actions are you taking there to increase your competitiveness? Or do you just have to take the hit from the lower volumes and was for the higher milk prices for your volumes to recover?

And a follow-up on this, assuming the their volumes continue in H2, similar to H1 could it result in more production stocks in H2 as on Q2.

Thank you, Victor. Well, what we are doing in terms of actions, that is what we do continuously, right? So now we face this, which can lead to, let's say, lost business opportunities in dairy, but we are always targeting new businesses or opportunity that is called it in on a few way or type of concept.

One is to load our factories with a decent volume that in both cover costs and help kind of get good utilization. And wherever we have a loss, let's say, of a dairy opportunity, then we try to load it with another opportunity that could cover for that, while at the same time, continue to focus on more advanced solutions where there is not an easy replaceable solution between, for example, dairy fats or or dairy factory. So that is the continued focus on AAK is the functionality that ingredient brings and with that creating even more stickiness. Now, as we said many times that in some cases, you have an interchangeability like with cocoa butter versus alternatives or with dairy fast or very fat alternatives.

There are solutions where it could change, and that's where this could happen. But over time, long term and strategically, we focus on unbalancing our ingredients to bring more functionality and more value-added solutions and applications to our customers. In the short term, we try to load our plants and backfill them, if you will. If we lose a contract, we try to win something else back hard for volume that has an accretive EBIT opportunity.

Okay. Perfect. Would it be possible to squeeze in a quick 1 on FX that's been negative for a long while now it was neutral to EBITDA share in guidance at if FX stays here.

Yes, it's difficult to give a guidance on that depends on, as you know as well, this is translation also depending upon how the currencies move. But what I can say in -- there is a big change from Q1 into Q2. In Q1, most of the currencies that we operating contributed in a negative way with a negative effect. When we go into Q2, comparably to Q1, all currencies improved. And we see particular movements in Mexico and Brazil that are contributing to the sort of equal status in Q2 with India still pulling down on the negative side.

But as I stated, this is very difficult to project. That's more of a currency indication, and that's a different topic. From year-on-year in Q2, it was stable year-on-year. And if things were to be -- as they are today, then there will be a limited impact.

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

Thank you, and thank you all for your questions. Before we close, I would just like to leave you with a few final reflections. We had a strong first quarter while the second quarter was somewhat softer. Even though the first half remained solid with both volume and operating profit at fixed currencies ahead of last year.

The market environment continues to be challenging and we do not expect conditions to improve overnight. However, the factors affecting the second quarter were concentrated and clearly identified, including pressure in dairy and food service and the production challenges in Carlson.

At the same time, we continue to outperform the underlying chocolate markets, delivering strong cash flow and maintain a strong financial position. It is also important to remember that AAK is a long-term case. Quarter-to-quarter performance will vary, particularly in a volatile market environment, but our direction remains unchanged. We have a clear strategy, strong customer relationships, leading application expertise and a broad portfolio of initiatives aimed at improving our commercial execution, operational performance and cost efficiency.

We remain confident in our ability to outgrow the underlying market over time, reach operating profit of north of SEK 3 per kilo and continue to delivering average EBIT growth of around 10% over time.

With that, thank you for joining us today, and thank you for your continued interest in AAK.

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.