Cloetta Stock

A very warm welcome, and thank you for joining Cloetta's Q2 Interim Report Presentation. I'm Laura Lindholm, the Director of Communications and Investor Relations. As per usual, our CEO, Katarina; and CFO, Frans, will first go through our results, after which we will move to the Q&A, where you either have the possibility to dial in and ask questions live or alternatively post your question through the chat. It is already possible to add questions in the chat. Over to you, Katarina.

Thank you, Laura. Today, I'm proud to present our second quarter 2026 results. In this quarter, our Superbrands performed very well and profitability was exceptionally strong. Looking at the first half of the year, we executed fully in line with our strategy and delivered also against all 4 of our long-term financial targets. But first, over to the agenda. Today, it looks as following. For the ones that have not listened to us before, I will start with a recap of our strategic framework and our financial targets.

I will today also share an update on how we continue to step up our operating model and are creating a stronger foundation for growth, flexibility and long-term competitiveness. After that, I'll move to our quarterly highlights. Our CFO, Frans, will then walk you through the financials. And as always, we wrap up with a Q&A. I will now briefly walk you through how we bring our vision to life through our strategic framework and then in relation to this, also our updated financial targets. To learn more, please see the recording of our Investor Day 2025, which is available on our website.

Our vision really capture what we are all about. It's not just something we say. Our vision is to be the winning confectionery company inspiring a more joyful world. For us, it's a real promise to do great work, to keep innovating and most of all, to bring joy to people every day. This vision is what guides us. It what keeps us learning, improving and leading the way in our industry. We have created a clear strategic framework to guide us forward and right at the center is our vision. Our strategy is about focus, clear choices that will help us scale, grow and make the biggest impact where it truly matters.

We have 5 core markets, and that is Sweden, Denmark, Norway, Finland and the Netherlands. And today, around 80% of our total sales come from these markets. Our first priority is to focus on our 10 Superbrands in our core markets. These are the brands where we see the biggest opportunity for growth. By expanding them further, we can reach more consumers, grow faster and build stronger positions in the market.

Our second priority is to look beyond our core markets. We have identified 3 markets with strong potential, and that is U.K., Germany and North America. Our third priority is to strengthen our marketing and speed up innovation. Consumer needs are constantly changing, so we need to stay ahead, not only by following trends, but also by helping to create them. We are also open to exploring M&A when they fit our strategy and create value. But let me be clear, acquisitions are accelerator, not a requirement. We do not depend on M&A to achieve our financial targets.

To make all of this happen, we need the right foundation in place. That means having an efficient way of working and an organization that supports our strategy. I'll come back to this later in the presentation, and I will share an update on the progress we made in enhancing the operating model. And finally, it all come down to people and culture. They are at the heart of everything we do. Our culture shapes how we work together, and we have now built an organization that is strong, capable and filled with joy.

In March 2025, we updated our long-term financial targets to match our strategic priorities and our vision. With a clearer plan in place, we raised our long-term organic growth target from 1% to 2% to 3% to 4%. Global forward-looking inflation concerns a continue to be high, mainly as a result of the ongoing political uncertainty, and we hence expect the societal and political pressure related to food pricing to continue throughout the year.

Our long-term adjusted EBIT target is 14% with a goal to reach at least 12% by 2027. As you can see in our report, we're already above 14% this quarter. The uplift is part of our plan to step up investment during the second half of the year, including onetime costs related to our geographical expansion as well as an upcoming Superbrands product novelty launch. Our EBITDA over net debt ratio remains well below our long-term target, also including the effect of the increased dividend. As I also stated the last time, if a strong M&A opportunity appears, we may go above our long-term EBITDA over net debt ratio temporarily, but only if it clearly support our strategy and with a clear deleverage plan in place.

And finally, our dividend policy. We're now targeting a payout above 50% of profit after tax. The already mentioned higher dividend last year was in line with the updated long-term target. And now I will give an update about our progress under enhancing the operating model, beginning with a brief recap of what was shared on our Investor Day in March last year. To enable profitable growth, we need to enhance our operating model through net revenue management, have a supply chain fit for purpose and an effective operating structure.

Over the past year, we have made strong progress across all 3 of our strategic priorities. The results are already visible in our performance with net revenue management and our effective operating structure delivering a clear impact. At the same time, we are making strong progress in building a supply chain that is fit for purpose. Together, these priorities are enabling the foundation for sustainable and profitable growth. Today, I will share some more details about how we're ensuring that we have a supply chain fit for purpose meaning that our network is resilient, cost efficient, flexible and built around the demand pattern that we actually have.

Alongside this, we communicated at the Investor Day that our strategy was to have a structured approach to make or buy decisions, ensuring that investment go where they create the greatest value. I will go into more detail on CapEx make or buy and the operating structure in turn.

To support future growth, we foresee the previously communicated increase in CapEx to 4% to 5% of NSV in the midterm with investment focused on capacity, efficiency and supply chain capabilities. Importantly, these investments are intended to support future growth and are also including continued investment in our repeatable Pick & mix business model. Still, they remain significantly below the previously canceled greenfield project. We also outlined a structured approach to make or buy decisions with our production -- within our production network, ensuring that CapEx is directed to the area where it creates the greatest value. To progress with the make or buy decisions, we have classified our technologies to core, which is technology we don't want to outsource and noncore.

We have also agreed on long-term partnership with strategic partners. Together, all these initiatives are designed to create a flexible, stronger and more resilient manufacturing footprint that supports sustainable growth that is aligned with long-term consumer trends while contributing to margin improvement over time. Another portion of the increased CapEx will be invested in the digitalization of our operational planning capabilities, enhancing customer service, inventory efficiency and data-driven decision-making. AI-enabled tools will play a key role in this transformation.

We will also continue to invest in process excellence across the business with a strong focus on sourcing, design to value in product development, lean methodologies and sustainabilities. These initiatives help improve efficiency, strengthen competitiveness and support profitable long-term growth.

As we shared when we decided to not proceed with the greenfield project in early 2025, opportunities exist in our supply network to compensate for the volumes planned to be produced by the greenfield plant. Our CapEx, including midterm step-up investment is split roughly 50-50 across the portfolio. That balance is deliberate rather than concentrating capital in one single technology, we are investing across other important technologies, such as chocolate, foam candy and pastilles alongside our moulded starch capacity and capability. As also mentioned on the slide and just to recap, the greenfield plant was designed to produce candy only based on moulded starch technology.

Our investment priorities remain clear. We are building capacity for future growth and investing in automation and modern equipment to make our operation more efficient, flexible and resilient. This approach gives us disciplined, diversified capital allocation that reduces single technology risk and keeps us aligned to long-term growth.

And now a short quarterly update. In the second quarter, we delivered volume growth that was driven by packed branded products, combined with an exceptional profitability. For the first 6 months of the year, organic growth reached 3.8%, fully in line with our long-term target range of 3% to 4%. As expected, growth within Pick & mix was impacted by earlier Easter this year, creating a tougher comparison for this specific quarter. I'm very pleased with the continued performance of our Superbrands across our core markets. We are making strong progress on our expansion agenda, both within and beyond our core markets.

In the end of the quarter, we launched Läkerol, our largest pastilles Superbrands in the Netherlands, which is our third largest core market. At the same time, we are finalizing a nationwide U.S. rollout of selected products from 1 of our 10 Superbrands, making another important step in our international growth journey. In July, we also reached a significant milestone by becoming the first company to open a pick & mix concept based on Swedish candy in U.S. retail. Operationally, we delivered an exceptionally strong quarter with efficiency improvements visible across the business and contributing to our strong profitability.

Our focus on profitable growth remains intact and achieving our midterm profitability target of 12% at the latest in 2027 remains well within sight already for the full year of 2026. So with that, let's turn to the financials. I'll hand over to Frans, who is more than ready to walk you through our second quarter performance and the strong result of the first half year.

Yes. Thank you, Katarina. And as Katarina said, it's really good to be able to present this quarterly result and also for the first half of the year, specifically given the phasing of Easter, where more of Easter took place during the first quarter than last year, it gives a better perspective on how the strategy launched last year is delivering results. So as I walk you through this, keep a bit of extra focus on the first full half of the year.

So starting with our net sales. In the quarter, we delivered strong volume-driven organic growth in the Branded package segment, similar to what we did in the first quarter. So 3.3% growth and that brings the first half of the year to 3.4%. And we're very pleased to be able to share those growth numbers, volume-driven growth numbers. Then for Pick & mix, again, given the Easter phasing, and it's primarily visible here in the segment, we got to look at year-to-date. We grew 4.7% and also that is organic volume-driven growth. And we're very pleased with that growth and especially as we, at the same time, are creating opportunities for very strong growth in this segment through the geographic expansion.

So the Pick & mix growth achieved year-to-date is without any material gains from the many initiatives we've spoken about and that we're currently expanding in Germany and the U.S., and we've spoken about other opportunities as well. So that will all be future growth potential and part of the strategy that we launched last year. So in total, volume-driven organic growth of 0.8% in quarter 2 brings our year-to-date to a strong 3.8%, and that is at the upper end of our long-term target to grow 3% to 4%. And of course, very, very pleased with that.

Now reported, we grew less, 0.4% in the quarter and 2% year-to-date, and that's mainly on account of the stronger Swedish krona versus the euro. And I'll repeat here what I said in the last 2 quarters about currency effects that companies incurring costs in Swedish krona, in Sweden to make products which are then exported and sold in euro, they will have a challenge when the Swedish krona strengthens. But at Cloetta, we largely sell our products where we make them. The products made in Sweden are mostly sold in Sweden and products made in euro-denominated countries are mostly sold in euro-denominated countries. So the real effect for us is limited and the effect on the reported sales is truly a translation effect.

Then moving to the regular page showing the segments over and under. Here, you see Easter phasing quite clearly on the lower half with Pick & mix, but also that this is the third quarter with our Branded package segment stable to growing again after a bit of, called fluctuation in 2025. And another key takeaway here is that not to look too much at those really big growth numbers back in 2023 because that was to a high degree driven by inflation and instead take away that we are back to organic volume-driven growth. And that is a result of the strategy to really focus on Superbrands in the core markets and to, in a more focused manner, grow the markets beyond the core and throughout this support by further step-up in marketing and innovation.

So volume driven, it is also profitable. And in this quarter, the profit is truly exceptional. So let's have a look at that. So we are reporting an operating profit adjusted of 14.9%. And some of you might have done a bit of a double take on that margin, given that our midterm target is to reach 12% no later than 2027 and our long-term target is to reach 14%.

Now you have to realize that the midterm and the long-term targets are full year targets. And in any given year, we will have fluctuations between the quarter. And even though 14.9% is very strong, it is not the strongest quarter we've ever had. That was quite some time ago, but we've actually, in the past, been at 15.8%. So we've actually had several quarters in the past that were over 14% margin, but that was never enough to reach 14% for the full year. And that's what we're aiming for here.

Now still, the year-to-date operating profit margin of 13.9% does position us very well to reach 12%, so the midterm target 2027 already now this year. And we've said before that the target is within sight, but with half a year still to go, it's still too early to declare victory for the full year today. Now what then is driving the strong operating profit margin? That can best be summarized in 3 points. The first and second point is due to a favorable mix driven by our Superbrands and a really strong -- exceptionally strong operational efficiency. And on the latter, that's the efforts we during the Investor Day presented under the heading enhancing the operating model to drive profitable growth. And the slide Katarina shared earlier was exactly about that when she spoke about supply chain.

Now starting then with the first one, the mix. There is, of course, a favorable mix element related to the Easter phasing, but that is a temporary thing and it evens out over the quarter. So let's focus instead on what is more permanent, and that is that we have a favorable mix, mainly driven by the focus on our Superbrands in our core markets. And you know that they are more profitable than average, and that is coming through here. And that is a key contributor to that we're having a favorable mix in the segments, in markets, in categories, brands and products.

Then the second point on the operational efficiency. So you're already familiar with that we did the reorganization last year, and those savings now carry over. But there is also a very strong performance from a new agenda for the operations team since last year. This is end-to-end from sourcing, production, warehousing, distribution all the way through. And then there's also efforts by the commercial teams on net revenue management, like ensuring there is margin-accretive innovation. And we've shared the new launch on Läkerol more previously, and that is an example of that.

Now I'm not going to break the drivers down in detail here. But like with the segment mix due to Easter phasing, some of it is a bit more fleeting and some of it, this has stickiness and builds on the sustained effort we've had to strengthen profitability over time.

Now we do say that this is exceptionally strong. And maybe a simple illustrative example would be that in any given quarter, you have, let's say, 10 things that you're working on, 7 will go your way and 3 will have headwinds, so you get a net gain of 4. Now in quarter 2, all 10 went our way. And actually, Katarina has said, I think it was a year ago already at some point that there was a lot going our way right now. And Q2 is probably our strongest example to date of how we're executing on our strategy in a pragmatic and focused way and sometimes all the stars line up.

Now I said there was 3 points. And the third point is that in addition to the mix and the efficiency, we have flagged that the geographic expansion will come with some start-up costs in the second half of the year. And we will share more about that later on in quarter 3. But as a result of that, we're flagging already now that in quarter 2, we have held back on some investments that were planned for the quarter to help pay for those onetime strategic investments in the back half of the year.

Now the result for the full year would be the more, let's say, representative result for our ongoing business. So I basically say don't expect 14-plus percent margin in the second half of the year, but do feel really good about our ability to reach 12% for the full year and in a repeatable manner with the strong start that we've had. And before I move to the view by segment, a quick comment for those who want to look at the gross margin year-to-date. Remember to look at the adjusted margin, and you have that in the comments in the report, given that in quarter 1 last year, we released provisions related to the canceled greenfield project, leading to a favorable item affecting comparability and that boosted the gross profit that year. So on an adjusted basis, so like-for-like, the gross margin is up versus last year, not down.

Looking then at the segments over and under, you see that both segments margin benefited from the exceptional step-up. Branded package is up over 3% in the quarter and 2.6% year-to-date and Pick & mix on the lower half is up over 3% in the quarter as well and 2.9% year-to-date. So all incredibly solid numbers, exceptionally good in line with what I just shared. Now specifically for Pick & mix, it's well above the target to be between 7% to 9%, but we nonetheless believe that the targeted long-term range is the appropriate range to continue to drive profitable growth in the category as well as geographic expansion in line with the strategy.

For the Branded package segment, looking then at the year-to-date, even if you shave off a bit of that compensation we received for the supply quality deviation, that was in quarter 1. It's about 40%, and it's another step closer to the over 50% pre-pandemic level margin we used to generate in this segment. So it's an exceptional result for the quarter, and we will continue to seek to further strengthen the package margin and over time, return to the level where we were before the pandemic.

Then moving to SG&A. Now here, the variance year-over-year, both for the quarter and for year-to-date is primarily driven by the absence of the provision for severances we took in quarter 2 last year after we had announced the reorganization. So the net SG&A, excluding that, is flattish both in the quarter and largely for the full year-to-date. And that is as the savings previously confirmed to us to be in the announced range of SEK 60 million to SEK 70 million on an annual basis is fully offsetting investment for growth on top of regular annual inflation affecting salaries and various reporting costs.

Those investments, despite holding back a bit for the second half of the year, includes, of course, the geographic expansion beyond our core markets. You're familiar with the Candyking store in New York. That store is already profitable on the bottom line, but of course, it generates the SG&A cost. There's also the organization step-up in North America. We're doing something similar in the U.K. as well as the support of our Superbrands. So I already mentioned in the quarter 1 earnings call that there would be a further step-up of advertisement in quarter 2, and I can confirm that these figures include higher spend on A&P than last year. So cutting A&P is not driving the step-up in profit.

Now as also mentioned in quarter 1, the change to the operating structure in 2025 has not only aligned the organization better to execute on the new strategy, as again, evident from the quarter's result, but also permanently lowered the SG&A baseline and offsets the stepped-up investments. So overall, SG&A costs are held in check.

Then on to the free cash flow. So in quarter 2, we generated SEK 86 million in free cash flow, and that's SEK 94 million better than last year. Now Easter phasing also plays a part for cash, and it would be more fair to talk about year-to-date. And then I'm happy to share that also year-to-date, we did better than last year. So year-to-date, we delivered SEK 230 million in free cash flow, and that's SEK 39 million more than last year. So meaning we continue the favorable development on account of the focus on both profit and working capital.

Now the year-to-date improvement in free cash flow versus last year was expected, and that's primarily driven by the strong operating result, while working capital and CapEx separately and in total remained fairly stable versus last year. I also want to say that CapEx in the quarter, you see SEK 40 million here. That's on the low side versus what we've communicated earlier, where we said we will rise CapEx to 4% to 5% of net sales over the next 5 years.

And I want to comment on that. So this is in line with what Katarina just confirmed. We still expect to increase the spend on CapEx to 4% to 5% of NSV over that period of time. But within that period of time, the step-up will only really start to be visible for next year. That said, what we are spending money on this year is part of the total expected CapEx and is part of implementing those plans.

And that brings me to my last slide, which is on net debt or debt and leverage. And we closed the quarter with a net debt over EBITDA of 0.8x. So that's well below our target to be below 1.5x. And that's, of course, driven by both the strong cash flow and improved earnings. 0.8x is slightly higher than where we were in quarter 1 this year, but it always goes up in Q2. You can see it in the graph on the left-hand side there, given that we distribute the dividends in quarter 2. And 0.8x is actually 0.6x lower than Q2 last year and it is the lowest ever leverage we've had for a quarter 2. And our net debt is also the lowest ever we've had for quarter 2 of SEK 1.2 billion.

And that is despite having distributed our highest ever dividend in the quarter, SEK 401 million, that's SEK 1.40 per share, up 27% versus the year before. And in cash outflow, net of total return swaps, SEK 398 million. And finally, we have plenty of access to additional unutilized credit facilities and commercial papers, which together with cash on hand totaled SEK 2.7 billion.

So number one, we have continued to secure resilience in a changing world. And number two, we do have the financial strength to act on business opportunities fast. At the same time, while we have strategic financial flexibility, it will not change the fact that we have a pragmatic approach to investing in our business or even M&A as described numbers of times previously. And on that note, I conclude that our financial position developing in line with our set targets remains very strong and hand back to Laura.

Thank you very much, Katarina, and thank you, Frans. It is now possible to either dial in and ask questions live or alternatively post your questions through the chat. We already have quite many questions in the chat, but let's start with the telephone lines. Lorenzo, over to you.

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from the line of Stefan Stjernholm from Handelsbanken.

Stefan here. Can you hear me?

Yes, we can.

Yes.

Congrats to impressive margins in the first half of the year. But it would be helpful to give a range or some flavor to the expected uptick in marketing spend and one-off costs for the second half, if that's possible to say?

Well, I think in a way, the strongest indication of the range of step-up, and it's not only marketing, there's also organizational cost given the geographic expansion is the fact that we are saying that the 2027 target of 12% is remains within sight and in a good way. And I think I actually explicitly said don't expect 14% in the back half of the year. So obviously, we're aiming for 12% on a full year basis. So that means sort of gives a bit of an indication of how various factors would affect the back half of the year. A&P is one of them. Indirect is another one, as we said, for investment. But of course, there's also commodity movements, and we have a fair pricing policy where, of course, we adjust our pricing when commodities move. So I think it's -- the best answer I can give is to sort of look at the totality of that for a full year basis.

But if we assume 12% for the full year, that implies some 10% for the second half. That's quite a step-up. Yes. Fair enough. I did do my calculations and try to solve that one. It's obviously, much talk about the U.S. and the expansion there. But also, if I remember right, there was a pilot -- Pick & mix pilot in Germany launched in the first quarter. How is that developing?

Yes, it is going very well. So we are still -- we are in a dialogue. Of course, this is something we do in partnership with the retailers. And we usually have a couple of months data where we're looking into and then we roll into more stores. So now we are on 5 stores. So we continue to roll it out while the performance is doing well.

So you are in 5 German stores now with the concept?

Yes, yes.

That sounds good. Yes, to make -- be sure, it wouldn't go into the U.S. and the nation rollout, you said it was a selected number of SKUs. I interpret that, that is packaged. Is that right?

Yes, that's right, Stefan. That's right.

Thank you for the kind words about the report as you open the question.

The next question comes from the line of Nicklas Skogman from Nordea.

Congrats from me as well. Did I mishear you? Or did you say that you expected organic growth in the second half to be broadly in line with what you saw in H1?

Thanks for the comment on the reporting that. No, we didn't comment on the growth for the second half of the year.

Okay. But if we think about sort of volume and potential price impacts, what do you see there in H2 compared to H1? I'm thinking mainly perhaps on the pricing.

Yes. So the first thing I would say is that we, of course, have a fair pricing policy. And if we think about these things that are affecting us, like cocoa, as everyone knows, it's come down significantly versus last year. But actually now at the end of the quarter, it was coming up again. Sugar is down a bit versus last year, but actually, it's up now in Q2 versus Q1. But then you have other things like film, which is the packaging that goes into our bags, that is up as much in percent as cocoa is down versus last year and energy is up significantly as well. So we will adjust with -- in line with our fair pricing policy.

All right. And then you will tell us more about this U.S. Superbrands rollout in the autumn, but should we expect sales from this to come into this year?

Yes. So what we've shared here is that it's a limited portion, let's say, of the products variance we have behind that Superbrands. So it's obviously, we're not launching out the full SKU catalog of Cloetta. So we're starting, it's -- it will be a nice rollout, but it will have to build over time. And given the size although attractive and growing fast versus the rest of Cloetta, it wouldn't have a significant effect on our overall growth numbers for this year. Over time, of course, we've said that grow the beyond core will grow 2 to 3x faster than the core markets.

We have quite many questions from SEB. And I think the first 2 we have already answered, but let's take the one about Easter. With Easter normalizing as a base effect in H2, what is the expected organic growth trajectory for Pick & mix in Q3 and Q4? And does the inventory buildup reflect pre-positioning for geographic expansion or something else?

Maybe I'll start with the inventory. So we -- if you look at every year, we have a tendency of sort of tying up cash in the first half of the year and we generate most of our cash in the second half of the year. It's because there's so much demand that we can't satisfy that with production at the time. So we're always building up inventories, heading into the summer and then we start depleting them in the back half of the year. So that's, let's say, a normal trend to the inventory.

If -- again, the geographic expansion is certainly there. But unfortunately, it's not going to drive such big growth numbers this year that we would need to build exceptional levels of inventories. But that's, of course, this is part of the plan. That's part of the strategy. We're moving at the pace that we've set out and the opportunities -- the big opportunities, of course, are ahead of us.

For the growth in Pick & mix, yes, so by looking at the first half of the year, that's a more, let's say, true number. You shouldn't look at Q1, you shouldn't look at Q2. But beyond that, we don't really give forward-looking growth numbers per se.

Good. And then I think we have a few general IR questions. So if okay with the person who was asking, we will revert to those via e-mail. But then as it is summer and it is hot, we have a question about ice cream. So do you foresee the brand being licensed for ice cream? And I think the reference is in Sweden to Kexchoklad and Polly as successful as it has been done in Finland, given that Kexchoklad and Polly are strong brands in Sweden, it ought to work seamlessly here also.

Thank you. It's a good question. Yes. According to the strategy, we are having an expanding strategy with our Superbrands, and that's including also looking into the ice cream categories. Currently, as I said, we are very successful primarily now within Finland in this area.

Yes. And then I would also maybe talking about the warm weather. Nothing to -- we can see right now and predict right now. But if the weather would be extremely warm, we have seen a little bit of an effect historically, like the consumers, they start to eat a little bit more ice cream or, for instance, drinking a little bit more. But it's already -- it's earlier to see. It's too early to see. And the last time it happened, it was 2018. So it has to be extremely hot to get the impact on the sales for this one.

Thank you, Katarina. And we move from ice cream back to U.S. and have questions from Strawberry Capital. How many stores are you set to roll out in the U.S.? Do you have an agreement with one specific retailer? And do you have a partnership for instance, like BUBS partnered up with Mount Franklin Foods? Which products are you going to roll out? And then lastly, are you in talks with retailers regarding Pick & mix? And how do you see the Pick & mix development in the U.S.? I think we already answered some of this during the presentation, but maybe a few words.

Yes. So I can mention it. So first of all, as we said, in July, we did the first launch of the CandyKing concept in -- at the U.S. retailer. So that is one store. We're testing it. But of course, we're doing this in partnership with the retailers. And if it works well, we continue to roll it out. And of course, if other retailers see it works, then there could also be -- we can have a dialogue with them. But it's the first step, the first start. And then when it come to the Branded packed, where we are talking about one Superbrand with some selective SKUs where there we are in a dialogue. We haven't finalized it yet, but we are close in closing that dialogue, and that means that we will roll out those SKUs in the market nationwide in the U.S.

Good. And then also from Strawberry Capital about the U.S. supply chain. Will the nationwide branded rollout be served from your European plants? Or are you considering a U.S. co-manufacturer or local sourcing? So it's about if we have the same strategy as BUBS and Mount Franklin Foods.

In the U.S., yes, currently, we are using our own production network. So that's what we're starting. But of course, it becomes very big and very large, then we have to review our sourcing strategy as well. But currently, we're doing it from our own network.

Very good. And then, yes, we have one question from private investors, if we were happy with the Sweets & Snacks Expo in Las Vegas.

Yes. I'm sure who he was. Of course, we had a lot of great dialogue, and we were meeting the relevant customers and so on there. So that was good.

Good. And I see we have some questions here that we haven't specifically answered, but those were already questions that our analysts raised. So if one of the retail investors feels that there is still something to talk, of course, you are more than happy to check in with us also after the webcast. Any questions from the telephone lines? I think we answered both of our analysts. Any questions there, which is up? [Operator Instructions] Looks like everybody is happy.

Good. Then it's time to start to conclude our event, but we take this opportunity, as usual, to update and remind you of our upcoming IR events. Our next report, the Q3 is published on the 4th of November, followed by a road show in Stockholm arranged by Nordea. Ahead of that, quite a lot is happening. On the 19th of August, we will attend Nordea Equities Small and Mid Cap Days in Stockholm. And on the 17th of September, we'll be in New York City on a road show arranged by Handelsbanken. We, of course, continue to update our upcoming IR events in the calendar, which is available on cloetta.com.

It's now time to conclude our event. But before we meet again, we, of course, hope that you get the chance to enjoy our wide portfolio of confectionery products during many joyful occasions. Have a very nice summer, and thank you very much for joining us today.

A very warm welcome, and thank you for joining Cloetta's Q1 Interim Report Presentation. I'm Laura Lindholm, the Director of Communications and Investor Relations. Our CEO, Katarina; and CFO, Frans will first go through our results, after which we will move to the Q&A, where you either have the possibility to dial-in and ask questions live or alternatively post your question through the chat. It's already possible to add questions in the chat.

Over to you, Katarina.

Thank you, Laura. Today, I'm very proud to present our first quarter 2026 results. After a transformational 2025, this is our first quarter with execution and clear result from our strategy. As you will see during the presentation, we are making great progress and are moving closer to delivering on all 4 long-term financial targets.

But first, over to the agenda. Today, it looks as following. I will start with Cloetta in a brief, then I shortly recap our strategic framework and our updated financial targets for the ones that have not listened to us before. After that, I move to our quarterly highlights. Our CFO, Frans, will then walk you through our quarterly and full year financials. And as always, we wrap up with a Q&A.

For the new listeners on the call, let me start by introducing Cloetta. We were founded in 1862. And today, we are the leading confectionery company in Northern Europe. We strongly believe in the power of true joy and our everyday purpose is to spread joy through our iconic brands. We have grown a lot since the early days and now have an SEK 8.5 billion in sales last year, combined with an operating margin of 12.1% to be compared to 10.6% in 2024 and 9.2% in 2023. We have established a strong profitability uplift, which we also will talk more about today. Over half of our sales come from our 10 biggest and most profitable brands, and we call them our super brands.

Despite the increased geopolitical uncertainty, we remain largely unaffected. This resilience is due to several key factors. First, we operate in a noncyclical market with stable consumer demand, which provides a solid foundation even in uncertain times. Second, our broad product portfolio allows us to offer a range of alternatives, helping us adapt quickly to shift in consumer behavior. And finally, we have, despite the current geopolitical uncertainties, still many attractive growth opportunities like expansion of our super brands, step-up in innovation and growing beyond our core markets. These strengths gives us the confidence to continue delivering solid performance, profitable growth and building further long-term value for our investors, our customers, consumers and for the people at Cloetta.

I will now briefly walk you through how we bring our vision to life through our strategic framework and then in relation to this, also our updated financial targets. To learn more, please see the recording of our Investor Day 2025, which is available on our website.

So let me start by talking about our vision at Cloetta because it's really capture what we are all about. Our vision is to be the winning confectionery company inspiring a more joyful world. And it's not just something we say. For us, this is a real promise to do great work, to keep innovating and most of all, to bring joy to people every day. This vision is what guides us, is what keeps us learning, improving and leading the way in our industry.

I will today also show you 2 concrete product examples of the vision. We have created a clear strategic framework to guide us forward. And right at the center is our vision. Our strategy is about focus, clear choices that will help us scale, grow and make the biggest impact where it truly matters. We have 5 core markets. It's Sweden, Denmark, Norway, Finland and the Netherlands. And today, around 80% of our total sales come from these markets.

Our first strategic priority is to focus on our 10 super brands within those core markets. These are the brands with the strongest potential. By leaning into an expansion strategy, we can open new opportunities, grow faster and build real scale. We are not stopping there. We're also looking beyond our core markets. We have identified 3 high potential markets that sit outside the core, and that is U.K., Germany and North America. Our third priority is to elevate our marketing and accelerate innovation. The market keeps changing, and we need to stay ahead, not just following trends, but also help to shape them.

In our strategic framework, we are now also opening up to explore M&A, but only if it fits our strategy and when, of course, it makes good business sense. That said, any M&A would serve as an accelerator. It's not something we rely on to reach our financial targets. And to make all of this work, we need, of course, the right enablers in place. This means having a focused, efficient operating model and a structure that actually support our strategy and goals.

During 2025, we aligned our structure with our strategy so we can move faster and strengthen our path to profitable growth. People and culture are, of course, the heart of everything. Without them, the rest is just a black box. Our culture is the foundation of how we work, and we have now built an organization that is strong, capable and filled with joy.

So Lakerol is one of our super brands in the pastilles category. And this slide capture our launch of Lakerol more and how it delivers on our vision and fits into our strategy win with super brands. What we are introducing here under the Lakerol brand is a new texture and flavoring experience, softer, chewer and more indulgent, while we are staying fully within the sugar-free space. This is a successful multi-market launch in line with our vision and strategic focus. This launch is helping us recruit younger shoppers into the Lakerol brand as Lakerol more feels modern, sensorial and relevant without alienating our existing core users from the brand.

We've seen a strong start across the Nordic markets where we have launched the 2 flavors with early results showing increased market shares in the pastilles category and what's particularly is encouraging is the repeat purchase rate, which is already above the category average, really confirming that consumers don't just try Lakerol MORE, they actually also come back to buy more.

Moving on to our second example. And here, we are showing how we are scaling a winning pick & mix concept into branded packaged products. Zoo Foamy Monkey started as a pick & mix success within CandyKing, where it quickly stood out, thanks to its taste, foamy texture and playful shape. Consumer demand was strong, and this gave us the results we wanted to also scale Foamy Monkey into branded packaged format.

Under the super brand Malaco, we are building on the iconic Swedish Zoo monkey shape and flavor that Swedish consumers already know and love and now translated into a soft foamy candy in a Malaco branded bag. Malaco Foamy Monkey is rolled out across major Swedish retailers as we speak and is available in 2 variants, sweet and sour. This is a great example of a smart brand leverage, proven products, strong emotional equity and high engagement, both in-store and on social media. These projects deliver faster growth, lower risk and stronger relevance, a perfect example of how we continue to win with our super brands and deliver on our vision.

In March 2025, we updated our long-term financial targets to match our strategic priorities and our vision. With a clearer plan in place, we raised our long-term organic growth target from 1% to 2% to 3% to 4%. As reported, inflation has now stabilized. It's obviously difficult to justify price increases driven by inflation. This means that future growth primarily needs to come from higher volumes, exactly what our strategy is designed to deliver.

Our long-term adjusted EBIT target is 14% with a goal to reach at least 12% by 2027. As many of you saw in the report, we're already above 12%. As Frans will explain later, both Q4 and Q1 got an extra boost, and we will wait to celebrate 12% EBIT when it's fully repeatable. Our EBITDA net debt ratio target is below 1.5% -- 1.5, sorry. Of course, if a strong M&A opportunity appears, we may go above that temporarily, but only if it clearly supports our strategy and with a clear deleverage plan in place. And finally, our dividend policy. We are now targeting a payout about 50% of profit after tax.

And now a short quarterly update. As highlighted in the report, we delivered a very strong first quarter with profitable growth driven primarily by higher volumes. Easter sales fell into the first quarter this year, but even when we adjust for that effect, we still achieved our long-term organic growth target of 3% to 4%. I'm also proud to see solid growth across both of our business segments with particularly strong performance in the Nordic and North America. Inflation continued to ease during the quarter. At the same time, geopolitical uncertainty increased, and we, therefore, expect societal and political pressure related to food pricing to remain high.

Our EBIT margin reached 12.9%. And even excluding the compensation related to the quality incident, we are in the quarter, exceeding our profitability target of at least 12% by 2027. After a transformational 2025, we are now fully executing and delivering on our new strategy. And with that, we are now also another step closer to reaching all of our long-term financial targets.

And with that, it's time for the financials. I'll hand over to Frans, who is more than ready to dive into the first quarter's numbers.

Yes. Thank you, Katarina. So just before looking at the details here, I'd like to tell you what I'm about to tell you, and then I'll tell you. So firstly, and it's worth repeating, strong organic volume-driven net sales growth in line with our higher long-term growth target set 1 year ago and then a favorable Easter phasing on top of that. So not because of, but on top of, and I'll come back to that.

And then I'll talk about the continued significant margin expansion, delivering another quarter with an operating profit adjusted margin meeting the midterm target set to be reached only in 2027. And then I'll tell you about the continued improved leverage for yet another best ever at 0.6x net debt over EBITDA, further improving on our ability to secure resilience in a volatile world and importantly, financial strength to act on business opportunities in line with our strategy.

And lastly, not Q1 specific, but Tuesday, I guess, 2 weeks ago, given our strong financial position, the AGM approved the Board's proposal, which was in line with our new long-term target to distribute for 2025, our highest ever ordinary dividend, so SEK 1.40 per share, a 27% increase versus last year.

So let me then start with our net sales. So again, very strong volume-driven organic net sales growth of 6.9%. Now as you recall, in Q4, our slight volume decline from Q3 had turned to stable growing volumes. So now from the stable growing volumes, we are now in the territory of solid volume growth. In Q4, I also shared that we expected that quarter 1 2026 would benefit from the shift of Easter sales coming into Q1 from Q2 last year. And I can confirm that shift to SEK 40 million to SEK 45 million this year, which is in line with the earlier estimate I gave.

This means then that even when adjusting for the earlier Easter phasing, Q1 2026 organic growth is at the upper end of the range for our long-term target growth of 3% to 4%. And we are, of course, very pleased with this and to be able to confirm that after a transformational 2025, implementing the new strategy and updating our organizational structure to support that, it all starts to come together in product innovation, marketing and sales and supported by a reignited supply chain organization.

Naturally, given that the phasing was from quarter 2 into quarter 1, in the coming quarter 2, that quarter's growth will reflect also that shift. So the main point will be then to look at the first half of 2026. And given the strong Q1, so you can imagine, even if we would not grow at all in quarter 2, the first half of 2026 will still be growth in line with our long-term target. And I'm not trying to sandbag quarter 2 here. The main point is just to illustrate how strong of a quarter 1 really is.

Now on the 6.9% organic growth, that's partially offset by currency effects of about 3.3% for a reported growth of 3.6%. And before looking at the segments, I want to repeat something mentioned also last quarter about the currency effect. So companies incurring costs in Swedish krona in Sweden to make products which are then exported and sold in euro, of course, will have a challenge when the Swedish krona strengthens. But at Cloetta, we largely sell our products where we make them. So products made in Sweden are mostly sold in Sweden and products made in euro-denominated countries are mostly sold in euro-denominated countries. So the real effect is really limited for us, and it's primarily a translation effect.

Then moving to the regular page showing then the segment here side by side or over and under, I should say. In Q4, we could report that both segments were growing to stable again, while for Q1, both segments are now clearly growing and they are growing on volume. And for pick & mix on the bottom half, we are growing solid double digits. And also if one assumes the full Easter effect in pick & mix, then pick & mix is still growing at a very healthy 2x the long-term target for Cloetta. For packed, we're also growing a healthy 3.6%, which is also in line with the long-term target. That's against a softer quarter 1 2025, but then we also rationalized the portfolio at that time and volumes were also affected by pricing and especially on chocolate back then. That said, we are very pleased with this growth being of high quality. It's volume driven and it's profitable.

So let's look at the profit. So in the quarter, we are reporting an operating profit adjusted of 12.9%, and we're very pleased with that. As we also reported about 12% in quarter 4 and for the full year 2025, let me unpeel that a bit. So you may recall, for the full year of 2025, the margin was 12.1%. But then that was aided by the receipt in Q4 of compensation for suppliers' quality deficiency back in 2024. Now in Q1, we have received the second and final part of that compensation. The total compensation over the 2 quarters is SEK 44 million, of which SEK 32 million was received in Q4 and SEK 12 million now in Q1.

So doing the math on that, it means that in Q4 2025 and for the full year 2025, the margin, excluding the compensation were 12.4% and 11.7%, respectively. So 12.4% in Q4 and 11.7% for the full year 2025, which is why back then, we said we would hold the celebration of having reached 2027's profitability target of 12% in 2025. Now it does mean that our Q1 margin, excluding the compensation is 12.4%. And that, my friends, is above the 2027 target. So in line with what we flagged earlier, 12% is within sight for the full year 2026.

Taking one layer down into this, and it's quite obvious from the slide that the profit is driven by volume as well as mix. On the volume, the mentioned Easter phasing drives further volume. And although we supported that with merchandising and sales activities, which will be visible in the SG&A, we're obviously making a healthy profit on those sales. And then for the mix, you do have an effect of the faster-growing pick & mix, but largely offset by favorable mix with respect to market mix and also product mix within the branded package side.

And I mentioned the rationalized portfolio last year, but we also have a strong lineup of new products this year. Now these net sales are supported by marketing at similar levels as in Q1 last year. So the overall SG&A is flattish to up, and we look at that separately. But cutting back on investments is not how we are driving the stronger margin. And actually, before a view of profit by segment, a quick comment for those who wants to look at the gross margin.

Remember, you need to look at the adjusted gross margin, and we have that commented in the report. Given that in Q1 2025, we released provisions related to the [indiscernible] the greenfield project. So that led to favorable items affecting comparability, boosting the gross profit that year. So on an adjusted basis, so like-for-like, the gross margin is up about 50 bps.

Looking then at the segments over and under, you see that both segments margin improved in the quarter over last year with the Pick & mix segment on the lower half, reaching a quarterly margin of 12%. Now that is, of course, above the target to be between 7% to 9% obviously aided by the strong sales and the favorable fixed cost absorption as a result. And we believe that the targeted long-term range is the appropriate range to continue to drive profitable growth in the category as well as geographic expansion in line with our strategy.

Then for the Branded package segment, the quarterly margin is 13.4%, aided, of course, by the second part of the compensation. But irrespective of that, it's a great recovery versus last year and again, bringing us closer to the sort of plus 15% pre-pandemic level margin we used to generate in this segment. And we will continue to seek to further strengthen the packed margin and over time, return to the levels we were before the pandemic.

Then moving to SG&A. Here, stripping out the benefit of translating the cost incurred in euro to Swedish krona, which I'm showing separately here, it is an almost flattish SG&A. Actually, it's the lowest quarterly increase we've had in many years. And that is, of course, on account of the savings from the change to the operating structure in 2025. So I can confirm the upside of SEK 60 million to SEK 70 million on an annual basis. And that saving in Q1 is fully offsetting the investments we have for growth, including the investment in the geographical expansion beyond our core markets, mostly well-known is the CandyKing store in New York, but it's also on the organizational side.

We're, of course, already profitable on that store, but it does generate SG&A. And then also in overall organization in North America and the U.K. as well as investments in product innovation. And then increased merchandising and sales activities on account of the Easter phasing. Again, obviously, a profitable sales, but it does incur additional SG&A cost.

As mentioned, our advertisement and promotions are in line with last year, where we already made a big step-up for new launches and a further step-up will be phased more into Q2 given the already strong Easter performance. The net increase in SG&A shown then on the slide is mostly driven by the carryover effect of annual salary adjustments from April 2025 with the next round, of course, now in April 2026.

So key takeaway is that the change to the operating structure in 2025 has not only aligned the organization better to execute on the new strategy as evident from the quarter's results, but also permanently lowered the SG&A baseline and helped offset the stepped-up investments beyond the core markets. So overall, costs are held in check.

Then on cash. In Q1, we delivered a solid SEK 144 million in free cash flow, and the difference to Q1 last year is really driven by the working capital effect of this Easter phasing as we ended Q1 with higher receivables, only partially offset by lower inventories. This is in line with expectations. And for comparison in Q1 2024, when Easter was similarly phased to how it is this year, our free cash flow was below SEK 100 million. So we continue to see the favorable development on account of the focus on both profit and working capital.

And then CapEx in the quarter, that's SEK 38 million that remains on the low side, in line with earlier communicated is expected to rise to between 4% and 5% of net sales over the next 5 years, and we will revert on that later this year.

That brings me to my last slide on financial position. And here, you can see that our leverage as we closed the quarter is 0.6x as net debt over EBITDA, well below our target for the leverage to be under 1.5x. And it's also the lowest ever we've had. Now the result is a combination of the strong cash flow, resulting in a lower debt, lowest ever actually at SEK 820 million and then, of course, the improved earnings. Now with the low debt, we have plenty of access to additional unutilized credit facilities and commercial papers, which together with the cash on hand is just shy of SEK 3 billion.

So coming back to where I started. One, we have secured resilience in a changing world and the financial strength to act on business opportunities. And two, in April now, of course, not shown on this slide, we distributed SEK 402 million in dividend, and we're, of course, pleased to have created the conditions for that dividend payment of SEK 1.40 per share, up 27% versus last year. And on that note, I conclude that our financial position developing in line with our set targets remains very strong and hand back to you, Laura.

Thank you very much, Katarina. Thank you, Frans. It is now possible to either dial-in and ask questions live or alternatively post your question to the chat. And I think, Vicki, we already have some questions on the line.

[Operator Instructions] We have the first question from Stefan Stjernholm, Handelsbanken.

Can you hear me?

Yes.

Stefan here. Congrats to a good start to the year. If you start with the gross margin, if adjusting for the SEK 12 million in compensation for the quality issue, I get the margin to 34.6%, i.e., flattish year-over-year. Am I missing something? Or is that right?

Sorry, can you repeat that, the flattish?

If you adjust gross margin for the SEK 12 million in compensation, I am getting to 34.6%.

Yes.

Yes. I mean, how should we think about the gross margin going forward? Is there room for improvement? I mean, you had a positive leverage on the strong growth in the quarter, and you're also highlighting positive sales mix. And in spite of that, the margin is -- the adjusted margin is flattish.

Okay. Okay. Yes. So it's always a little bit -- the reason that we're focusing on the operating profit margin adjusted is because of the 2 segments and that it's difference between the branded side and the pick & mix side. So when we have really strong pick & mix sales, you would have an unfavorable mix effect on the margin as a result. But the reason that we get a higher profit at the end is because we have really good fixed cost absorption when it comes to merchandising and depreciation of the racks, et cetera. So our focus is a little bit further down into the P&L because of the segments are -- it plays out a little bit differently between them, if I put it that way.

Yes. I got it. Good. And regarding the Easter impact, good that you give the figure of SEK 40 million to SEK 45 million on sales. Is it possible also to quantify the EBIT impact if you get -- if you take the margin for the group, it's like 5% positive. I guess that's slightly more than that given the leverage on better sales.

Yes, yes. So I would say that it is possible to do it, but we haven't done it. It's not a level that we want to disclose. But we're obviously very happy with the profit in the quarter.

Yes. But somewhere between 5% and 10% is a fair assumption, I guess, for the EBIT impact.

Yes, yes. So definitely favorable, yes.

Yes. And then a final one for me, the pick & mix, the pilot with Edeka in Germany, how long is the evaluation phase?

Stefan, this is Katarina. Yes. So as we wrote, we are now setting up in the report. We are testing in one store, and then we will also -- we have another try at another customers next quarter. So I would -- it's usually goes for a couple of months and then we evaluate. Of course, you can't drag it out too long. So it's a couple of months, then we do an evaluation.

Interesting. It would be nice to hear more about that later. Okay. These were my questions.

Yes. We'll update for sure.

The next question from Nicklas Skogman, Nordea.

I have 3 questions, please. First, could you give some more flavor on the organic growth? You mainly highlighted the growth in chocolate, the Kexchoklad and the Tupla, but how did these new innovations that you mentioned like the Lakerol and the Zoo Foamy, how did they contribute to growth in the quarter? And also how did the rest of the sugar candy business do?

Okay. I will start with that one. So as mentioned, the Lakerol more was a successful launch. We launched that quite early in the -- or I think it was week 7 or 8 or something in the quarter. And it's already taking market share. So that is, of course, a very positive signal. We also see that consumer already coming back to buy more in a double sense. So that is a very -- we have very positive signal. So that launch have, of course, contributed to the growth.

The Foamy Monkey was launched a bit later right now. So it's too early to know the consequence of that one. But we have proof, of course, that the consumer already likes it because it's a client in CandyKing. So that is, of course, we really believe big in this launch as well.

And the rest of the sugar candy business, how is that excluding Easter and the launches -- the innovation launches?

It's performing well. So we have -- we are on a good growth. And as I said, we had a very strong quarter and on top, the Easter sale. So we really now get the strategy into action. And what we also see is the Nordic performing very well together with North America.

Okay. Second question is on the inflation. You mentioned that it is slowing. Do you think we could see price being a net negative contributor for the full year, given the massive decline in the cocoa prices?

So first of all, we don't want to comment on our prices in terms of price signaling. What we've said is that we have an established way of working with our customers, which is around fair pricing and where we adjust our pricing based on world market commodities. And now cocoa, which, of course, is only part of our portfolio has stabilized. And here, we have to think about when players who are as us sell chocolate products, if that would be at a lower price, how many consumers would then come back into the category, and that would drive volume to maybe more than offset that.

And as Katarina mentioned in the CEO comments in the report as well that although from a market point of view, and I'm talking Nielsen here, the chocolate candy or confectionery chocolate category has -- looks like a little bit more promising now than it did before. We have really strong volumes. So you could have a rollback without dropping NSV.

Yes. So volume could offset the potential price impact in short. Okay. Good. Last question is on the announcement yesterday from a competitor. They acquired a company called Aroma. Do you have any business with Aroma today via a pick & mix part of your company? And also from a broader market view, do you expect any changes to the market dynamics as a result of this acquisition?

Yes, I can confirm. In the CandyKing concept, we have Aroma products. As mentioned in the interview this morning, it's not in line with strategy for Cloetta to acquire Aroma because we have a clear M&A strategy from that perspective. [ Fazer ] and Aroma are 2 well-known players today in the market. And of course, they will now have one -- there will be one set of competitors that we have to -- yes, play with, so to say, and see. I don't think it's too early to say what the key changes will be. But of course, this is a signal that Fazer will be more focused in the confectionery category. And that, of course, we need to take a position and manage.

Could you share how much of the pick & mix business that is like how much is Aroma at the retail level?

No, no, that's not something we would do. But if you think about Aroma is about 1% of the confectionery market in Sweden. So Aroma plus Fazer is less than half the size of Cloetta in Sweden. So it's not going to change -- impact our strategy this. But as Katarina says, we'll have to continue to see how this acquisition develops. And -- but it doesn't impact our strategy, and it would not have -- Aroma would not have been relevant for us with our focus on our super brands in the Nordic.

All right. Good. Maybe I'll sneak a last one in. What's the latest on the North American business?

Sorry, what is the latest update on the North American business?

Yes. What's the last, yes.

Yes. So as mentioned, North America grew well in the quarter. So it contributed to the growth. We launched the CandyKing store in Manhattan in the end of December. It's a profitable business. It's there to drive CandyKing and also to learn about -- learn the consumers and customers about our concept. We are also, as mentioned, we have recruited a business manager that's located in the U.S., all the packaging for what we can -- how we can drive the Swedish candy in the packed format are now approved from a legal perspective, both the design and the information on pack and recipes and so on.

So we are progressing well, but we will share a more updated information about North America, yes, going forward. But we are progressing well and it's contributing to the growth in this quarter for sure.

Thank you, both. Vicki, it seems we do not have any further questions from the line. Is that correct?

That's correct. No questions for the moment.

Thank you. We move over to the chat. We do have one question that was posted quite early on, but that's quite commercial and business driven in terms of promoting products. So we will come back to that separately.

We will move to the second question, which is focusing on the agreement with IKEA. Assuming the IKEA contract has made your products available in more countries than you are already existing in and beyond the 3 identified markets, will you explore the opportunity to accelerate the expansion to new countries?

Yes. So last year, we signed a global contract with IKEA. Today, we are -- we're having sale in 14 markets, and we continue to roll it out in more countries. We have planned for that in 2026 and 2027. The details of the agreement with IKEA are confidential. So -- but as long as we have the opportunity possibility, we will share information about the contract -- about the business within the details of the contract. Yes. Yes, it's 14 markets.

Good. We have no further questions in the chat. So should you like to post a question, please do so now. And I think also no further questions from the lines, right, Vicki?

No questions from the phone.

All right. Let's double check the chat. It appears we have no further questions. It's time to start to conclude our event for today, but we take this opportunity to update and remind you of our upcoming IR events. Our next report Q2 is published on the 15th of July. But in addition to that, quite a lot is happening. Before the report, you can meet us in Stockholm and at our plant in Ljungsbro, Sweden as well as also New York and Dublin. You can see the details here on the slide.

After Q2, we have so far have confirmed IR seminars and other events in Stockholm and in New York. And also there, you can find all the details on the slide and then also keep an eye out for the IR calendar on our website. We've updated it almost weekly. For those of you who are based in the U.S. or plan to travel there, our CandyKing store has been mentioned many times, and we extend a special welcome to that store. It's located in the West Village at 306 Bleecker Street. And do trust me, it is the perfect spot to familiarize yourself with our leading brand and concepts and to know what Swedish Candy is all about.

It's now time to conclude the event. Before we meet again, we, of course, hope that you get the chance to enjoy our wide portfolio of confectionery products during many joyful occasions. Thank you for joining us today.

A warm welcome, and thank you for joining Cloetta's Q4 Interim Report Presentation. I'm Laura Lindholm, the Director of Communications and Investor Relations. We extend a special welcome to the more than 5,000 new shareholders that joined our journey last year. And of course, hope that many of you are listening in today. Our CEO, Katarina; and CFO, Frans, will as per usual, first go through our results, after which we will move to the Q&A. Where you either have the possibility to dial in ask questions live or alternatively post your question through the chat. The chat has already opened up for your questions. Over to you, Katarina.

Thank you, Laura. I am really proud to share our fourth quarter and full year results with you today. And I'm so pleased that 2025 turned out to be a successful year. We closed it with an exceptionally strong profit in the quarter, and we are now taking another step closer to delivering on all our long-term financial targets.

But first, over to the agenda. Today, it looks as following. I will start with Cloetta in brief, then I recap our strategic framework and our updated financial targets. After that, I'll move to our quarterly highlights. Our CFO, Frans, will then walk you through our quarterly and full year financials. And then as always, we wrap up with a Q&A.

For any new listeners on the call, let me start to tell you a bit about Cloetta. As Laura already shared, during last year, we welcomed more than 5,000 new shareholders. So this slide might be a good recap, especially for you. Cloetta was founded in 1862. And today, we are the leading confectionery company in Northern Europe. We strongly believe in the power of true joy and our everyday purpose is to spread joy through our iconic brands.

We have grown a lot since the early days, and we now have operations in 12 countries. In 2025, we hit SEK 8.5 billion in sales, and our operating margin was 12.1% to be compared with 10.6% in 2024. As I already mentioned last quarter, we have established a strong profitability uplift, which we will talk more about today. Over half our sales come from our 10 biggest brands, and we call them our Superbrands.

Despite the current geopolitical uncertainty, including a tariff situation, our company remains largely unaffected. This resilience is due to several key factors: firstly, we operate in a noncyclical market with stable consumer demand, which provides a solid foundation even in uncertain times; second, our strong and trusted brands gives us the ability to adjust prices when needed without losing consumer loyalty; thirdly, our broad product portfolio allows us to offer a range of alternatives, helping us adapt quickly to shift in consumer behavior; and finally, we have, despite the current geopolitical uncertainties, still many attractive growth opportunities like the expansion of our Superbrands, our step-up in innovation and growing beyond our core markets. These strengths gives us the confidence to continue delivering solid performance and building long-term value for our investors, our customers and consumers and the people at Cloetta.

I will now briefly walk you through how we bring our vision to life through our strategic framework and then in relation to this, also our updated financial targets. To learn more, please see the recording of our Investor Day 2025, which is available on our website.

So let me start to talk about our vision at Cloetta because it really captures what we're all about. Our vision is to be the winning confectionery company inspiring a more joyful world. And it's not just something we say. For us, this is a real promise to do great work to keep innovating and most of all, to bring joy to people every day. This vision is what guides us, is what keeps us learning, improving and leading the way in our industry.

We have created a clear strategic framework to guide us forward. And right at the center is, of course, our vision, to be the winning confectionery company inspiring a more joyful world. Our strategy is about some clear choices, choices that will help us scale, grow and make the biggest impact where it truly matters. We have 5 core markets. It's Sweden, Denmark, Norway, Finland and the Netherlands. And today, around 80% of our total sales come from these markets. Frans will talk more about our geographic mix a bit later.

Our first strategic priority is to focus on our 10 Superbrands within these core markets. These are the brands with the strongest potential. By leaning into our expansion strategy, we can open new opportunities, grow faster and build real scale. I will also share one example today of how we are working with one of these brands in our core markets.

We are not stopping there. We're also looking beyond our core markets. We have identified 3 high potential markets that sits outside our core. That's the U.K., Germany and North America. Today, I will share an update of our progress in North America, but also a short update of our global agreement with IKEA.

Our third priority is to elevate our marketing and acceleration in innovation. The market keeps changing, and we need to stay ahead, not just following trends, but also help to shape them.

In our strategic framework, we are now also opening up to explore M&A, but only if it fits our strategy and when it makes good business sense. That said, any M&A would serve as an accelerator. It's not something we rely on to reach our financial targets.

And to make all of this work, we need, of course, the right enablers in place. This means having a focused, efficient operating model and a structure that actually supports our strategy and goals. In Q2 last year, we announced changes to our organizational setup, including some role reductions and updates to our group management team. Those changes are now in place, and we have aligned our structure with our strategy so we can move faster and strengthen our path to profitable growth.

People and culture are, of course, at the heart of everything. Without them, the rest is just the black box. Our culture is the foundation of how we work, and we're committing to building an organization that is strong, capable and filled with joy in what we do.

So let me share an example of how we expand with our Superbrands into new markets. And this time, I will use Kexchoklad as an example. In Sweden, Kexchoklad isn't just a popular chocolate. It's actually the best-selling product in the entire food and beverage industry. Everyone in Sweden knows the yellow-checkered pattern. Many of us also connect Kexchoklad with skiing and an active lifestyle. Kexchoklad is part of Swedish everyday life.

We have been selling Kexchoklad in Denmark, too, but only through a few retailers with limited distribution and often discounted. It has not reflected the strength of the brand. So last year, we decided to change that. We took the marketing materials that worked so well in Sweden, translated it and brought the same strong story to Danish consumers, and it worked. Demand grew and so did the sales.

Now Finland is starting the same journey. We just launched Kexchoklad there, and the response has been very good. At launch, we reached 90% weighted distribution, and we also hit our market share target during the first week. It's early days, but momentum is strong, and it shows what's possible when we bring our Superbrands to new markets with the right focus and investment with a good return.

Then let me move to 2 examples connected to our strategy of growing beyond our core markets. The first one is IKEA. In 2025, we signed a global agreement with IKEA. And today, the now broader assortment has been made available in 14 countries in Europe. This means that some of our most iconic Superbrands are now also available at IKEA stores. And we're not stopping there. We plan to roll out these products in even more markets during 2026 and 2027. The details of the agreement with IKEA and Cloetta are, of course, confidential, but we will continue to share updates whenever the agreement allows us to.

Now let us look at another example, how we're growing beyond our core markets. It's about our progress in North America. Today, we have a small but growing business there. We are continuing to build on what we started while at the same time, preparing for the next stage of expansion and putting the right long-term infrastructure in place. We have set a 3-year plan because for us, it's more important to have a solid, well thought-out business plan than to rush. We want to make sure that every investment really counts. Building a brand and expanding on a new continent is exciting and is really full of opportunities, but it has to be done in a controlled and pragmatic way.

And we are already taking important step. We have signed a contract with a local commercial leader who will further drive our go-to-market strategy and build the local organization. We also finalized the packaging and recipes for our key branded packaging products. These are now needed for any larger fast-moving consumer goods company to be able to operate in the U.S. This was an important step to meet the different food regulation in North America, and it positions us well for the rollout in 2026 and 2027.

For Pick & Mix, we run a pilot project to gain deeper consumer insights, which now guides us our long-term rollout. And as a part of building our Pick & Mix brand and awareness, we also opened a CandyKing store at Bleecker Street on Manhattan, and I will tell you more about that on the next slide.

So we are moving on to the update on our newly opened CandyKing store on (sic) [ in ] Manhattan. This store is an important step for us. It helps us build the brand, increase awareness of our leading concept and introduce local consumers and retailers to the Nordic tradition of pick and mix. The store is an excellent way to showcase what we can do and have done in more than 4,000 retailer stores in Europe. The store opened 2 months ago, and the response has so far been fantastic. Both consumers and the press have welcomed us warmly and the store has been profitable from day 1.

Yes. Now over to the long-term financial targets. So in March 2025, we updated our long-term financial targets to match our strategic priorities and our vision. With a clearer plan in place, we raised our long-term organic growth target from 1% to 2% to 3% to 4%. As inflation now is stabilizing, it's obviously difficult to justify price increases driven by inflation. This means that further growth primarily needs to come from higher volumes, exactly what our strategy is designed to deliver.

Our long-term adjusted EBIT target stayed at 14%, and our goal is now to also reach at least 12% by 2027. As many of you saw in the report, we're already above 12% in 2025. As Frans will explain later, Q4 got an extra boost, and we will wait to celebrate 12% EBIT when it's fully repeatable. Historically, our net debt target has been around 2.5. Since we are -- have been consistently reached that over the years, we now set a new target below 1.5. Of course, if a strong M&A opportunity appears, we may go above that temporarily, but only if it clearly supports our strategy and with a clear deleverage plan in place.

And finally, we have also updated our dividend policy. Instead of paying out 40% to 60% of profit after tax, we are now aiming for payout about above 50%. Frans will talk more about this year's dividend proposal later on, but I'm, of course, happy that also our shareholders are able to be part of our successful journey.

And now a short quarterly update. As previously mentioned, we had a successful year that ended with a strong quarter, and I'd like to highlight some key takeaway. As a start, I would like to emphasize that I'm really, really pleased that we've shown growth in both business segments this quarter. And more importantly, this growth is coming from stable and increasing volumes. As mentioned earlier, with inflation stabilizing, volume growth becomes even more important for us going forward.

We are the leading confectionery company in Northern Europe. And this quarter, we continue to see strong performance in the Nordics and in North America. In the rest of Europe, sales were stable compared to the previous quarter. This quarter was also exceptionally profitable. That was driven by our long-term margin-enhancing activities, our savings related to the change in our operating structure and the fact that we received a partial compensation for the supplier quality incident we had early 2024.

With the strong results we deliver in 2025, the Board will also propose increasing the dividend to SEK 1.40 per share. So in short, as we close 2025, we can clearly see that we're getting closer to delivering on all our financial targets. Growth is important. And by strengthening our profitability, we're also giving ourselves the room to invest more so we can drive stronger growth ahead.

Now it's finally time for the financials, and I hand over to Frans, who I know is more eager than usual to walk you through both our fourth quarter and our annual financials.

Thank you, Katarina. Yes. Let me take you through both the full year and Q4 in a bit more detail and 4 best ever results when it comes to profit, cash leverage and subject to shareholder approval, also dividend and with important steps towards the long-term net sales growth target. And let me start with the sales.

So in the quarter, we again delivered stable, profitable organic sales growth of 1.1%, bringing the full year organic growth to 1.9%. Now Q4 may then at first seem like a slowdown versus year-to-date. So I want to highlight what I think is our 3 really interesting things on how our new more focused strategy is gradually starting to take effect.

Firstly, the last major round of pricing took place in Q3 2024. So Q4 2025 is the first full quarter without the benefit of strong pricing versus the comparator. So instead, while in Q3, I mentioned that volumes were down about 1%, I can now share that Q4 volumes are stable to growing. So from a perspective of satisfying the consumer demand, we're actually moving in the right direction.

Secondly, while for the full year, we have been able to continue to rely on our broad portfolio to ensure organic growth, so where the decline in the Packed segment was more than offset by growth in Pick & Mix. Now in Q4, as Katarina mentioned, both segments are growing again, and that is really important.

Thirdly, as in quarter 3, in quarter 4, we continue to see strong growth in the Nordic region as well as in North America, but partially offset by the rest of Europe. Although in Q4, also the rest of Europe has stabilized a bit. So that helps us grow stronger in Q4 than what we did in Q3; and again, despite the absence of the pricing benefit that I mentioned. You can actually see this for yourself in the report.

So in Q4, the Nordic market adds up to 70% of our total sales. That's up 2% versus 2024. And a 2% bigger slice of the pie when the pie has grown 1.1% organically, that means arithmetically, that the Nordics has grown about 4% in the quarter, and that's well within our long-term target, while the other markets have declined and despite that, the strong North America. We're, of course, not content with 1.9% in the full year. But what I just shared indicates that combined with the new organization structure in place as of October 1 to support the new more focused strategy, we are in a good position to progress towards our long-term target of 3% to 4% organic growth.

There is also a fourth interesting thing I want to mention on the topic of resilience, and that is about the currency effect on our reported net sales. So down 2% on the full year, 3-some-percent in quarter 4; and based on that, it would be easy to erroneously include Cloetta in the current focus on the negative effect of the strong Swedish krona on Swedish companies.

So for obvious reasons, if you are a Swedish company incurring costs in Swedish krona in Sweden to make products that you then export and sell in euro, you have a challenge today. But Cloetta, we -- of course, we largely sell our products where we make them. So products made in Sweden are mostly sold in Sweden and products made in euro-denominated countries are mostly sold in those countries. So the real effect of the strength in Swedish krona is limited for us. And the lower reported sales, that's primarily a translation effect.

Then moving on to the normal page I have showing the segments over and under. Actually, I think I've covered what's on this slide pretty well when I said, number one, Q4 growth is without the benefit of pricing. Volumes are actually up. Number 2, both segments are growing, and Packed is now back to being over 70% of our sales. And 3, the Nordics is doing really well with the rest of Europe a bit more stable.

And on the pricing, you can see the impact on the sales in 2023 and 2024 is pretty clear in the graph. But we're, of course, incredibly proud that consumers appreciate and love our brands and products have continued to visit our customers to buy them to the same extent as they used to despite the higher price that they find in the stores; and actually for Q4, buy even more.

Now I also want to call out here that Easter in 2026 is now going to happen a little bit earlier than it did in 2025. So we expect that around SEK 30 million to SEK 40 million in sales will shift from Q2 into Q1 as a result of the Easter phasing, and that's largely Pick & Mix in Sweden. So our sales will be up, but also with a slightly softer gross margin in Q1.

Regardless, there are more opportunities for growth. And as mentioned, we are on track to reach long-term growth target, but we want to grow with profit, including us taking a fair share of the value that our products generate. So let's look at the profit.

So you have surely noted, and Katarina mentioned, with an exceptionally strong quarter 4 at 13.9% operating profit margin adjusted, we are for the full year reporting 12.1%. And you should be wondering sort of why is that not the headline of the report, to deliver the midterm target of 12%, which was supposed to happen no later than 2027 already in 2025.

And Katarina mentioned this, and the reason is quite simple. In 2024, as we shared at the time, we incurred significant cost on account of a supplier having delivered a nonconforming component to us. This Q4 results includes a partial compensation for the cost related to that incident. So the negotiation is still ongoing, and I will not go into detail on the amount for now. But just as those costs weighed down our result in 2024, the partial compensation now lifts the Q4 results and our full year operating profit margin tips over to the reported 12.1%.

Now we expect to close this process in the first half of 2026, but we will wait with celebrating reaching 12% until we are there in a repeatable manner. But we shouldn't get distracted by that compensation because also without it, we are delivering our strongest full year margin in almost a decade and an operating profit adjusted, and this is the first best ever today. As you can see in the report, it's a profit of over SEK 1 billion.

We continue to lift our margins back up again with cost control, including the restructuring of the organization this year, net revenue management, product portfolio and via fair pricing, and all the while, while continuing to invest behind our 10 Superbrands. And it is these actions that make Q4 our seventh consecutive quarter with improved margins versus the same period the year before. And it is these consistent improvements that puts our midterm target of at least 12%, no later than 2027 in sight already for 2026.

Now I did say lift back up again. So let's move to the slide showing the margins by segment, and let me comment a little bit on that. So looking at the segments over and under, both segments margins improved in the quarter over last year and for the full year. And the Pick & Mix segment on the lower half, quarterly margin of over 8%. That's right in the middle of our target to be between 7% and 9%. We believe the targeted long-term range is the appropriate range to continue to drive growth in the category as well as geographic expansion in line with our strategy. On the full year, the margin is at the upper end of that range at 9.2%.

For the Branded segment, the full year margin is just over 13%, which is a great recovery of 150 bps versus last year, including with the compensation that this brings us closer to the average margin we had during 2022 and 2023 when we were just shy of 13%. So Packed margins are still below the pre-pandemic levels, and we will continue to seek to further strengthen these margins and over time, return to the level where we were before the pandemic and the pricing compression.

Now I should mention here that irrespective of the partial compensation, the Q4 margins are normally a bit stronger than in Q3 and the following Q1 margins are generally a bit down versus Q4, including due to portfolio mix. And for Q1 2026, given the mentioned shift with more Easter sales, which is Pick & Mix, that will negatively affect the margins for quarter 1, given the higher relative margin in the Packed segment.

Nonetheless, let's move to the sales, general and administration. So the result is helped by the change in the operating structure we announced in Q2, executed in Q3, and we went live with at the start of Q4. We had shared that we expected that 20% of our full year announced savings of SEK 60 million to SEK 70 million will be realized in 2025. And I'm pleased to share that we have done better than that, delivering roughly 30% of the annualized savings this year. So just about SEK 20 million and the majority of that, of course, in quarter 4.

Now in the table, you can see favorable items affecting comparability, and that's mostly about the provisions for the restructuring being smaller than the impairment for Nutisal the year before. So the items affecting comparability comes out as a favorable variance. But in Q4, we actually released some earlier provisions relating to the restructuring since we managed below the expected cost in certain areas, again, helping the Q4 margin a bit. And we are tracking well against our previously announced total budget of SEK 60 million to SEK 70 million.

On the column with the currency effect, I should also say, you can see the translation effect that I mentioned earlier has also led to lower -- it led to lower reported sales, but it also leads to lower reported SG&A cost. That apart, the rest is a further step-up in spend to support our 10 Superbrands, both in the quarter and for the full year. There's also higher merchandising costs given higher volumes. There's a general inflation, and that is largely offset by the in-year savings from the restructuring. So overall, the SG&A costs are held in check.

And for Q1, we will step up A&P further. We're launching a lot of new exciting products, which is a direct effect of our new strategies, third pillar to excel in marketing and innovation, and we will support these products to ensure they get a good start and help us drive the top line. We have fairly obviously created space in our P&L for a higher level of investments in our 10 Superbrands and then drive a virtuous cycle of growth leading to profit and reinvestments.

Coming then to our cash flow. I shared in Q3 that the strong cash flow that quarter and year-to-date was not a phasing. And I can also show it with what is our second best ever, for the full year 2025, we have, for the very first time, delivered over SEK 1 billion in operating cash flow. It's actually SEK 1.057 billion.

Now the operating cash flow is, of course, in the report, but it's not visible on this slide. But you do get a sense from it when you look at Q4 step-up in free cash flow by almost 50% from SEK 264 million last year to a strong SEK 394 million there in the middle of the upper graph. Now the key drivers of free cash flow are, of course, the stronger operating results and then a favorable working capital management.

CapEx in the quarter, that's SEK 31 million. That continues to be on the low side, in line with what I have said throughout 2025, which is that the investment will start to rise in the future to secure the growth and profit, and we will come with an update on the strategy for operations in the first half of this year.

And that brings me to my last slide, which is on the financial position and the third best ever, which is that our leverage where we closed the year with a net debt-to-EBITDA of 0.7, so well below our new target to stay below 1.5. And the result is a combination of the strong cash flow, resulting in a lower debt, which is now below SEK 1 billion at SEK 956 million and of course, the improved earnings. And with the low debt, we have plenty of access to additional unutilized credit facilities and commercial papers, which together with cash on hand, totals SEK 2.8 billion as we close the year.

So we are pleased to have created good conditions also with respect to our fourth financial target on dividend and for the Board having proposed and assuming shareholder approval, what will be our fourth best ever for Cloetta, and that is an ordinary dividend for 2025 of SEK 1.40. That will be a 27% increase versus last year. And Cloetta will have paid out ordinary dividends of SEK 1.6 billion in the last 5 years, which is almost a 50% increase versus the 5 years prior.

And on that promising note, I will again conclude that our financial position developing in line with our set target is really strong, and I hand back to you, Laura.

Thank you very much, Katarina, and thank you, Frans. It's now possible to either dial in and ask questions live or alternatively post your questions through the chat, and we have quite many questions already in the chat. So let's get going.

The first question comes from DNB Carnegie. With the high volatility in cocoa prices, do you expect a consumer price drawdown in your chocolate offering going forward? And how do you roughly see the time line for this going into 2026?

Maybe I'll take that one. So well, I hate to disappoint you in the sense that we are Northern Europe's leading confectionery company. And given where we are in the market, we shouldn't be price signaling what we will do going forward. So we will, of course, continue our fair pricing strategy and to ensure we get a fair share of the value that our products are generating and make sure that people continue to visit our customers to buy them and enjoy them. That's all I can say on that.

Very good. And we continue with questions from DNB Carnegie, still on topic of pricing. Maybe something on your current best guess regarding peers' pricing on chocolate products or general pricing in the market and current perception on consumer price elasticity for the chocolate brands?

Okay. I don't want to comment on the competition. beyond that I hope that they also buy our products and enjoy them in their office. But no, but what we can say is we've said it before and that was quite -- it was visible to all the manufacturers is that when the cocoa cost was going up and prices were going up, consumers sort of moved into adjacent categories to enjoy the chocolate flavor, but not with the same level of cost.

For example, you would take a chocolate muffin because it tastes chocolate, but there's not so much cocoa in it or some chocolate ice cream. And obviously, now depending on what happens with prices, you could imagine that some of those consumers will come back into the pure confectionery category. But for us, now chocolates is a little bit over 20% of our portfolio. So for us, this hasn't been such a big thing, but I can imagine for some of the competitors that are really dependent on the chocolate category that this would play a bigger part.

And then focus on 2 of our growth markets. Peers have cited some increasing price elasticity among consumers relating to cocoa prices, especially in Germany and U.K. towards the end of 2025. Do you experience similar market pressure in those regions currently?

So -- well for us, chocolate is predominantly in the Nordics, in Sweden and Finland, and we don't really have a chocolate business in Germany and in the U.K. But I think, generally speaking, price elasticity is about people being insensitive to pricing and continuing to consume at the same level also when it goes up. And to some extent, I think consumers have gotten used to higher prices, but let's see what happens.

I think for us, what we have flagged is that we have really strong growth in the Nordics, and it's been more challenged on the continent, although now in Q4, it's improved and it's a bit more stable. And that's -- but that is more about overall societal discussion around food pricing than any specific category.

Good. And then one last question from DNB Carnegie. I think, we touched upon this already, but maybe a recap. So you mentioned end of the year that you're ahead of the expected run rate to deliver 20% of the annualized savings from the April 2025 structure change. Can you give us some more details on that? Is that saving larger than expected or rather realized ramped up faster than anticipated?

Now, that's nice. It's almost like I paid someone to ask that question because no, we're super pleased. I mean we announced it in Q1 -- sorry, in Q2, executed in Q3, and we went live beginning of Q4. So I think as a company, we move fast. And what we're saying is that out of the full savings of SEK 60 million to SEK 70 million. We are now delivering closer to 30% of that within the year. So it's a faster -- so we're phasing more of it into this year than what we had originally hoped. So we move faster. It's not that the total amount is changing.

Excellent. And it's a busy results today. So the questions from Nordea also comes through the chat. Looking at your long-term growth target of 3% to 4%, how should we think about the contribution from Nordic Superbrands versus the IKEA agreement and the U.S?

Yes, I can answer that one. So as we presented during the Investor Day, in the beginning of our strategy, more of the growth will actually come from our Superbrands in our core markets, while on the longer term, we will see a bigger growth coming from outside our core markets. So I hope that answered the question.

It does. And then second one, could you also update us on the performance in Germany and the U.K., which had some softness in Q3?

Yes. I touched on it as well that it's more stable, but it's not growing at the rate that our Nordic countries are. And this -- you could say that if you wonder why we made a specific strategic priority of growing beyond the core markets, this is kind of the reason why. We think that there's huge opportunities, but it was also an area that required extra focus, and you can see why we decided to put the focus on it.

Good. And then we move on to IKEA. Could we get some more color on the IKEA strategy and what you expect from that agreement?

Yes. So we made a global agreement, as I said, during 2025. And of course, the details in this agreement is confidential, so we can't share. But what we can share is, of course, that we have our Superbrands. We have a portfolio now available in 14 different countries, and we have planned to roll this out in more markets during 2026 and 2027.

Very good. And then for the compensation, you received partial compensation for the 2024 supplier quality incident. What would Q4 margins have looked like on a normalized basis, excluding the compensation impact?

So we are currently in negotiation around this. That's why it's a partial compensation. So we're not providing a specific number here. But what we've shared is that obviously, this gave an extra jolt to Q4, and it's sort of the full year tipped over to a 12% EBIT margin and which is why we're not really celebrating as we otherwise would have. We want it to be repeatable.

But we shouldn't get too distracted by that. This is now 7 quarters of expanding margin versus the year before. And it's obviously come from what we are controlling on a day-to-day basis, which is innovation, pricing, mix, other margin-enhancing initiatives as well as our own cost control, and that's what's driven this. It would still be really, really good, but it would not have been 12% for the full year.

Good. And then a final question from Nordea before we move on to other people. Pick & Mix, showed softer profitability and growth in Q4 versus Q3. What explains the quarter-on-quarter change? And what should we expect in the near term?

Yes. I think, we -- again, what we're doing is we are managing the full portfolio. We're looking to expand Pick & Mix, as we said also when we launched the strategy into new markets. Katarina shared about North America. We've also spoken about other markets. And we will do that in a profitable manner. And we're right in the middle of where we're supposed to be. And between quarters, sometimes it will go up a bit, sometimes it will go down a bit. But long term, I think it's the trajectory is very clear.

Very good. And then we have 2 more questions in the chat. They are on the same topic. So I will hence only take the first one. Is it possible to quantify -- it comes from Danske Bank. Is it possible to quantify the compensation amount during the quarter? And would Branded Packaged increase profits without the compensation?

So it's a super popular topic here. But yes, so we didn't quantify it in 2024 when it happened. We obviously shared with the market and made it clear, and we're not quantifying it now given the fact that it's still an ongoing discussion, but we have received partial compensation. It did help the quarter. It helped the full year tip us over 12%. But by segment or for the full company, we would nonetheless have been improving versus the prior year.

Excellent. Thank you very much, Frans. Then Meruna, just to check, do we have any questions from the telephone lines?

There are no questions from the phone. [Operator Instructions]

Thank you. It also appears that our chat questions have been answered. So Meruna, nobody there. No last question from the line?

No.

Thank you very much. Then it's time to start to conclude our event today. Now some of you might have noticed that we actually used the same image of the delicious looking CandyKing candy that we have used in the presentation. I'm very happy to share on behalf of our Pick & Mix team that this CandyKing collab product will be available in stores in Denmark this week, and in Sweden and Norway next week. In Finland, you will find it during May. And in the U.K., you have to wait until fall. These collab products will exclusively be available in CandyKing points of sale.

We, of course, also take the opportunity to remind everybody of our upcoming IR events. Our next report Q1 is published on the 6th of May. But in addition to that, as per usual, quite a lot is happening. Tomorrow, we attend an investor lunch in Stockholm hosted by Danske Bank. You can still sign up. And the IR program for the spring also includes 2 plant visits. I'm super happy that one of them arranged by DNB Carnegie's Montrose team, is especially focusing on private investors.

Our next seminar will be Handelsbanken's Nordic Small And Mid-cap Seminar, which is held in Stockholm in the beginning of June. It's now time to conclude for today. Before we meet again, we, of course, hope that you get the chance to enjoy our wide portfolio of confectionery products during many joyful occasions. Many thanks for joining us today.

A warm welcome, and thank you for joining Cloetta's Q3 Interim Report Presentation. I'm Laura Lindholm, the Director of Communications and Investor Relations. Our CEO, Katarina; and CFO, Frans will first go through our results, after which we will move to the Q&A [Operator Instructions]

Over to you, Katarina.

Thank you, Laura. I'm very proud to present our third quarter results. We have now successfully established a strong uplift in profitability. We are steadily approaching our midterm target of an EBIT margin of at least 12% by 2027. And this quarter is an important milestone on our continued focus on driving profitable growth.

But first, over to the agenda. Today, it looks as following. I will start with Cloetta in a brief. Then I recap on our strategic framework and our updated financial targets that we shared earlier in this year. After that, I move over to our Q3 highlights. Our CFO, Frans, will then walk you through our Q3 financials. And as always, we wrap up with a Q&A.

For any new listeners on the call, let me start to tell you a bit about Cloetta. Today, we are the leading confectionery company in Northern Europe. We were founded in 1862 and have for over 160 years, been spreading joy through our iconic brands, and we are planning to stick around for at least another 160 years. We have grown a lot since the early days, and now we have operation in 11 countries. In 2024, we hit SEK 8.6 billion in sales, and our operating margin was 10.6%. As I already mentioned, we have now established a strong uplift from this profitability level, which we will talk more about today. Over half of our sales come from our 10 biggest brands, and we call them our Superbrands.

Despite the current geopolitical uncertainty, our company remains largely unaffected. This resilience is due to several key factors. First, we operate in a noncyclical market with stable consumer demand, which provides a solid foundation even in uncertain times. Second, our strong and trusted brands gives us the ability to adjust prices when needed without losing customer loyalty. Third, our broad product portfolio allow us to offer a range of alternatives, helping us adapt quickly shift in consumer behaviors. And finally, our primary focus is on Northern Europe, a region that is generally less impacted by global geopolitical tensions compared to other parts of the world. Together, these strengths position us well to continue to deliver stable performance and long-term value.

I will now briefly walk you through how we bring our vision to life through our strategic framework and then in relation to this, also our updated financial targets. For more detailed information, please view the recording of our Investor Day available on our website.

So let me start by talking about our vision at Cloetta because it's really capture what we're all about. Our vision is to be the winning confectionery company inspiring a more joyful world. And that is not just a nice phrase on a wall. For us, it's really a commitment to excellence, to innovation and most importantly, to the joy we bring to people every single day. This vision is what guide us, and it is what pushes us to keep improving, to stay curious and to lead the way in our industry. We have created a clear strategic framework to guide us forward. And right at the center is, of course, our vision, to be the winning confectionery company inspiring a more joyful world. But having a vision isn't enough on its own. We can't chase every opportunity or be everywhere at once.

So we have made some choices that will help us scale, grow and make the biggest impact where it matters the most. We have 5 core markets, and they are Sweden, Denmark, Norway, Finland and the Netherlands. Around 80% of our total sales today come from our core markets. Our first strategic priority is to focus on our 10 Superbrands in our core markets. These are the brands with the biggest potential and by focusing on expanding strategy, we can unlock new opportunities, grow and drive scale. I will today also give you 2 examples of how we work with them.

Next, we are looking beyond our core markets. We have identified 3 high potential markets outside our core markets, and they are the U.K., Germany and North America. By focusing more and making clear choices, we believe we can truly make a difference and achieve strong growth in those markets. Our third priority is to step up marketing and innovation. The market is constantly evolving, and we need to stay ahead, not just reacting to trends, but actually helping them to shape them as well.

For the past 7 years, we focused purely on organic growth, but now we are open to exploring M&A as long as it fits our strategy and makes good business sense. That said, any M&A would be an accelerator and is not built in the plan to reach our financial targets. To make all of this happen, we also need the right enablers in place. That means having a simple, efficient operating model and a structure that supports our goals. During Q2, we announced changes to our organizational structure, including some reduction in positions and updates to our group management team. The goal is to better align with our strategy and move faster, but also to support our profitability journey, and we have now finalized all major project milestones.

People and our culture are, of course, key to our success. Without that, everything else is just a black box. Our culture is the foundation of everything we do, and we are committed to build a strong, capable and joyful organization. I would like to take the opportunity to thank all my colleagues for keeping their eye on our progress and delivering results, especially during the last 6 months of transformation.

Now I'd like to share a few concrete examples of how we are bringing our strategic framework to life. Today, I would especially like to focus on our first pillar, and that is win with Superbrands. One of our key focus areas here is expanding our top 10 brands into new categories, sales channels and core markets. In Q3, we initiated 2 now ongoing launches for Malaco, a super brand within the candy category. The launch of Fruit Drops builds on the trend of consumers increasingly looking for sustainable products and with more natural ingredients. The launch is still ongoing, but both pouches are already available in Sweden. One is available in Norway and both will be launched in Denmark in the first quarter next year.

Fruit Drops are vegan and do not include artificial colors or flavors. They contribute to our sustainability agenda and are also aligned with our targets to offer products that match the evolving consumer preferences. The other ongoing launch I would like to highlight is the Chewy Soft Bites. Consumers are seeking for exciting sensory experience and Chewy Soft Bites certainly reflects this trend. This is another multi-market launch, which builds on product that was already proven consumer concept in the U.K. They have been in the Dutch market for a bit more than a year and are now launched in Denmark, Norway and Sweden. And the 3 bags are already now among the top 10 most sold novelties in Denmark in 2025.

My other example of our achievement within Superbrand is related to the pastilles category, which is around 10% of our total sales. In the quarter, we were very successfully launched a limited edition of Läkerol hot pepper pastilles in the Nordic. The target of this limited launch was to bring new consumer both to the brand but also to the category. We more than succeeded as more than 40% of the consumer who brought the products were new to the pastilles category.

Linked to our strategic priorities and vision, we updated our long-term financial targets in March this year. With a clear plan, we have stepped up our long-term organic target from 1% to 2% to 3% to 4%. Our long-term adjusted EBIT target will remain at 14%, but our plan shows that we should at least reach 12% by 2027. Historically, our net debt target has been around 2.5. Considering our consistent achievement of this target in recent years, we have set a new net debt target below 1.5. However, should a compelling M&A opportunity arise, we might temporarily exceed it. Last but not least, our dividend policy have moved from a payout without a range of 40% to 60% to above 50% of the profit after taxes.

And now a short quarterly update. As previously mentioned, our strong uplift in profitability continues, and I'd like to highlight some key takeaways. We are committed to profitable growth, and this is also reflected in this quarter. We reached 11.9% in EBIT margin, which brings our rolling 12 months profitability to 11.4%. We have now a strong uplift in profitability established, and we are steadily approaching our target of at least 12% by 2027. In this quarter, we delivered stable, profitable and organic sales growth with some regional variations. The Nordic region showed strong organic sales growth, while the other European markets faced some short-term challenges due to slowing inflation and related market dynamics.

We continue to grow double digit in the U.S. Inflation continued to slow down in all our European markets and retailers and food industry manufacturers experienced some pressure related to food pricing. At the same time, lower inflation creates opportunities. And one example is that more consumer most likely will return to the chocolate category. With our broad portfolio and our new strategic framework, we have a clear path towards our long-term organic growth target of 3% to 4%. As previously mentioned, our new strategic framework is in place and all our major milestones linked to our operating structure are also achieved. With strategy and most of the structure now in place, we expect to see the result of this work during next year.

And now it's finally time for the financial, and I hand over to Frans, who is eager to walk you through both our third quarter and first 9 months financials.

Thank you, Katarina. So yes, let me take you through some more details here. But again, I would also summarize this as stable growth, strong uplift in profitability, strong cash flow resulting in a strong financial position. So starting with the net sales, as I always do. So in the quarter, we delivered stable, profitable organic sales growth of 1.3%, which brings the year-to-date organic growth to 2.2%. And I'm emphasizing profitable here, and that is key and a key aspect to understand the growth in the quarter, and I will come back to that. Now within this growth, as Katarina highlighted, we had strong growth in the Nordic region, a very strong growth, as a matter of fact, as well as in North America, but that growth was partially offset by the rest of Europe as sales were affected by changing retailer dynamics.

Now we don't report sales or growth by market. But in the report towards the back, you have a table there where we do report percent share of total sales by market. Now it is a bit of a blunt tool to understand the detailed growth in the quarter. But if you look at the year-to-date, you can get a view of what I just shared. So if you add up the percentages, you can see that the sales outside of the Nordic region have dropped from accounting for 34% of our total net sales last year, year-to-date Q3 last year to only 31% of our total sales Q3 -- Q3 year-to-date this year. So it's a drop of a couple of percent there, and that's sort of an indication of what I just shared.

And that is net of the fact that the strong growth we see in North America, of course, counts in the reporting as outside the Nordic region. Now one of the benefits of our portfolio is not only that we play in various confectionery categories, but also that our sales are across a number of markets. And I would argue that a continued stable profitable growth despite the rest of Europe faring a bit worse lately is an effect of that. Now without going into too much details by market here outside of the Nordic region, I'd like to say that it's well known that the general inflation has put a strain on consumers, and that in turn has affected retailers and the trade dynamics have changed, and there are both societal and political pressures relating to food pricing. And those pressures picked up as some of the commodity cost inflation slowed down over the summer, including a very much publicized cost of cocoa coming down from its historically high peak.

So not all costs have come down, of course, and there is a delay when changes start to affect manufacturers. But in this environment, our strategy has remained to drive profitable growth also when it has meant giving up some short-term sales. And the context here is very important, and that context includes that we are still rebuilding margins that we used to have but have lost in the Branded Package segment. And we are rebuilding those margins through growth and scale through cost controls and efficiencies and while continuing to invest in marketing and innovation, but also through fair pricing.

Now before moving on to the sales by segment and the profitability, let me also state that the reported sales were affected by currency headwinds as the Swedish krona strengthened. Nonetheless, the sales of SEK 2.177 billion that you see in the left graph on the last column of the left graph, that is our ninth consecutive quarter of sales above SEK 2 billion. And it is actually a step-up in sales of almost SEK 100 million versus quarter 2 this year. And as you recall, quarter 2 really benefited heavily from the Easter phasing. So we are pleased with continuing the upward trajectory in our sales.

Separately, note that the structural changes in the quarter is zero, and that is as the divestment of the Nutisal brand took place in June last year and therefore, no longer feature in the quarterly comparator, but of course, it's still there in the year-to-date.

So moving on to the sales by segment and showing -- actually, starting with the base of the slide today is the Pick & Mix segment, which grew a strong 9.4% in the quarter. And just, I mean, let your eyes feast over those previous quarters here. I mean it is very, very nice. Now that growth was then partially offset by the branded package shown above, where organic sales were down 1.8%, which is actually quite similar to the average development in the first half of this year. But again, as mentioned, related to the development outside the Nordic region. And this is arguably another angle to the strength of our portfolio that we have this portfolio where we can pick up on shifts in consumer behavior, whether that is at the macro level with consumers increasingly loving our Candyking Pick & Mix offering or at the micro level, allowing us to lean on other categories as we did when the price of cocoa spiked.

I think it's also a sign of strength that consumers have continued to buy our product as prices in retail have gone up. And also for Q3, our volumes, they're actually down only about 1%. And if I would exclude chocolate in that, then our volumes are actually flat to growing. Then unpacking the branded package sales a little bit, maybe pun intended there, the growth is affected by our continued optimization of the product portfolio to improve profitability. And I'll come back to that as well. But primarily, this is about us staying firm to our strategy of growing profitably rather than to grow at any expense. And the focus on profit is obviously best reflected when we look at the profit. So let's move on to that.

So we're very pleased with the result in the quarter to deliver another uplift of operating profit margin adjusted to 11.9%. That's 110 bps better than last year, and it lifts the year-to-date margin to 11.5% and the rolling 12-month margin, as Katarina mentioned, to 11.4%, and that is the strongest since 2019. 11.9% also makes this quarter the fourth consecutive quarter with a margin above 11%. And we can compare that to the prior 3 years where the average margin was, let's say, in the 10%-ish range, but where no individual quarter actually reached 11%. So when we talk about a permanent uplift in operating profit margin, I think that is a fair representation. Obviously, it's also interesting to note that we are consistently getting closer to our midterm target, which is to reach a margin of at least 12% no later than 2027.

I want to break this down a little bit further. So if we look at the key drivers for the improved profitability, they are, number one, carryover effect of fair pricing initiatives that we took last year and a little bit at the start of this year, but it's not new pricing in the quarter. Secondly, it's about cost control and efficiencies. And both segments are favorable here. For Pick & Mix, it's on account of efficiencies in merchandising and fixtures. And on the branded package side, again, the portfolio optimization and net revenue management comes back. And as a comment on that, when we optimize the portfolio, it is about replacing slower-moving, lower-margin products with something better, and that helps not only our business, but also our customers by providing a product that the consumer wants even more of. So it's really a win-win-win situation.

And then finally, on cost control and efficiencies, both segments benefit from savings from the change to the organizational structure to benefit our new strategy that Katarina mentioned. Then the volume mix, it is unfavorable. And within there, you do have an unfavorable mix as Pick & Mix grows faster than the Branded Package segment but that is partially offset by a favorable mix within the branded package on account of the focus of profitable growth, as mentioned. You also have the effect of the slightly lower volumes, which is sort of the 1% that I mentioned, but also given lower production, it means that there is less volumes to spread the fixed cost over.

Finally, and maybe most importantly, for the long-term outlook, the step-up in profitability is not due to any reduction in the investments behind our Superbrands. And I do want to add that at SEK 259 million, as you see in the last column in the left graph, that is actually our highest ever quarterly profit in Swedish krona. In this strong profit, I can also mention that we -- it doesn't include any reimbursement for costs that we incurred in Q1 2024 as a result of the isolated quality incident at that time due to one of our suppliers. But that process is ongoing, and we now estimate to receive such reimbursement in, let's say, in the next 6 months.

So with that, let's step up and look at the profitability by segment and see if that actually reflects what I just said. So over and under, you see that both segments margin improved in the quarter, both over last year for the quarter and also year-to-date. The Pick & Mix segment on the lower half, where quarterly margin again is above 9%, also shows why we, during the Investor Day, raised the margin target for Pick & Mix from the prior 5% to 7% to what we now have now is 7% to 9%. And for the Branded Package segment at the top, we improved the adjusted operating profit to 12.9%. And while that is a good thing, we also know that this margin used to be above 14%, and we will continue this work as outlined in the Investor Day through the focus on our Superbrands in our core market through stepping up in the effectiveness of our marketing and innovation and to continue to recover margins there.

That said, let's move to the sales, general and admin. Here, you see that costs are down both in absolute and as a percent of sales. But firstly, the strengthening of the Swedish krona in the quarter, which we earlier saw suppressed our reported sales. It does have the opposite effect when we translate our foreign incurred SG&A to Swedish krona. But then you have the net effect of cost controls, offsetting annual salary increases and other inflation, while again not driven by reduced investments in our Superbrands.

Now with respect to the cost control, the quarter does benefit from savings from the restructuring program for the new organization. And here, I can reconfirm what we have shared earlier that we expect to achieve up to 20% of the annualized savings of SEK 60 million to SEK 70 million in the second half of the year and the full effect as of the first quarter next year. On the year-to-date, I want to mention the items affecting comparability there of SEK 52 million in lower cost, and that SEK 52 million is the net effect of the onetime impairment of Nutisal that we took last year when we sold it and then the provision related to the organizational changes this year, which is mostly severance cost. So since the provision this year is smaller than the impairment last year, the items affecting comparability comes out as a favorable variance here.

Coming then to our cash flow. As mentioned in quarter 2, our normal seasonal pattern is to tie up cash in the first half and generate cash in the second half. And that holds very much true as we look at quarter 3. So in the quarter, we generated a very healthy SEK 339 million in free cash flow. On a profit after tax of SEK 189 million, so almost double the profit. The key driver of the free cash flow is, of course, the stronger operating result, but then a favorable working capital management. But also as the comparator where last year, the steep inflation meant a much less favorable working capital. Last year in Q3, we actually opened with extra payables on account of purchases to replace raw materials with quality defect, which was again the same thing as this isolated quality issue that I mentioned earlier. Now this year, of course, we don't have that problem.

Our CapEx in the quarter at SEK 41 million remains on the lower side. And as presented during the Investor Day, is that we expect investments will start to rise in the future to secure growth and profit. Now in this strong free cash flow, -- could it be just phasing from Q2? Well, the answer is no because actually, on a year-to-date basis, this is the first time ever that we've exceeded SEK 0.5 billion in free cash flow. It's actually strong -- so it's the strongest we've had year-to-date. It's more than 50% higher than year-to-date last year. So obviously, it's not a phasing.

Finally, with our strong financial position, we have also paid back SEK 800 million of loans to our credit institutions, and you see that in the graph at the top and to the right, which brings me to my last slide on financial position. So we closed the quarter with a net debt to EBITDA of 1.1. So again, better than our new lower target to be below 1.5 and 1.1 is the same we delivered in Q1 this year. And these 2 quarters are tied for the gold, 1.1 is the lowest ever we've had for Cloetta. And the result is a combination of the strong cash flow that we looked at, resulting in lower net debt, bringing it down to SEK 1.4 billion. That's almost down SEK 0.5 billion versus Q3 last year. And then, of course, the improved earnings that we have now spoken quite a bit about.

In quarter 2, leverage went up a bit as we paid dividends. So it's great to see that it's back down again to an all-time low. And actually, on the note of dividend, it is really encouraging that our year-to-date profit after tax of SEK 558 million is already SEK 1.96 per share, and that's only after 3 quarters, mind you. So we're pleased to have created good conditions also with respect to our fourth financial target on dividend in addition to top line growth, the stronger EBIT margin and keeping leverage low.

Finally, we have plenty of access to additional unused credit facilities and commercial papers based on the new credit facilities entered into during the quarter and as shared earlier in the press release. So access to cash, together with our cash on hand totaled about SEK 2.5 billion as we closed the quarter. So for yet one more quarter, I conclude that our financial position is very strong.

And with that, over to you, Laura.

Thank you very much, Frans, and thank you very much, Katarina. We already have questions in the chat, but we will start with the telephone lines. [ Valentina ] over to you and for our first caller.

[Operator Instructions]

The first question comes from Adrian Elmlund from Nordea.

Adrian here from Nordea. Can you hear me?

Yes.

Yes.

Very good. Pleased to see the results. I have a couple of questions, 3 of them, I think. So first off, [ Berry Kelevot ] noted this morning that they expected some mid-single-digit percentage decline of their sales and volumes in cocoa products in the upcoming financial year. So this is, as you know, due to the continued pressure of high cocoa prices. But kind of my question here to you is, do you believe that the market has priced in the inflated cocoa prices, meaning basically what price per tonne do you think is priced in? Looking at the chart now, I think that we're seeing some USD 6,500 per tonne at the moment. Just want to see your reflections on that during the overall market.

Yes. So I'm just thinking how to reflect this. I think it's -- I think the way that we like to think about this is that, obviously, when costs are coming down, which they have, at least for the cocoa, but not all commodities are down. Sugar, for example, is actually up. And cocoa is not really cheap based on historical levels. But when they're coming down, that's a good thing. It means that over time, the cost for the consumer will be lower, they'll come back into the category. So we think that's a very good thing. Now at the same time, it doesn't happen immediately. It depends on how much inventory you have, what kind of contracts you have in place, how the rest of your business looks. And of course, we look at the competitors and we -- when they publish their results, we can see what is happening in their business. But I don't really want to comment on their businesses instead focus on ours.

And ours is simply the following that, that we will continue to execute our fair pricing, which means that when costs go up, we take pricing. And when they come down, we roll back. But of course, it has to be done in a responsible manner as well together with the retailers. And that, I think, over time, will serve everyone really well. And I think what we will see is that consumers that maybe have moved into, let's say, chocolate muffins and similar products when cocoa was very expensive and they've given up on their chocolate tablets, they'll come back into the confectionery category. But exactly how much has been priced in, I think that varies really between the different players in the market.

Okay. A second question here. I want to dig a bit into the margin contribution here between the Nordics and the rest of Europe. Kind of what I'm looking here is trying to understand how much of the margin uplift in the quarter is thanks to a stronger geographical mix, contract your own margin enhancing activities or sort of product mix?

Okay. Fair enough. So maybe given that we don't actually publish margins by market, but I think what I could help you here is to start with that. So we are Northern Europe's leading confectionery company. It's not just a slogan. We have very strong relationships with our customers that go back decades and decades, maybe hundreds of years in some cases. And our position with the consumers is unparalleled, I would argue, for the products that we play in. So we're very, very strong there. Whereas in the rest of Europe, we're more of a challenger, which is where the opportunity comes from. Here's what we can make something different out of our business. But obviously, we are much stronger in the Nordic regions than before. Now I think if you think about the 2 big markets there like Germany and U.K., I think it's fair to say that Germany is perceived as a market with a lot of strong discount retailers and that you have to work hard for your margins there.

But for the U.K. we have in the past actually reported a little bit around the profitability there. I think it was as late as Q2 this year and certainly in last year as well, where we said that we had some negative taxable results in the U.K. And as a result, we had deferred tax provisions that we chose not to recognize. So we basically have said that the U.K. result is not good. So if you think about the U.K. having negative taxable results and the fact that Germany is a tough market, you could see how there is a favorable mix when the Nordic European countries are growing faster. But beyond that, I can't share you a number today.

That really helps. Kind of a follow-up question to that, if I may. like how confident are you that the sales pressure that you're now seeing outside the Nordics, as you stated in the CEO words, are short term? And why are you not seeing similar patterns in the Nordics? Do you think that can happen?

Yes. I can answer this one. So as mentioned also in the CEO word is, of course, we have -- we launched our new strategy during the spring. We have created a structure, done some reorganization. And now we are -- the strategy are set. The organizational setup or structure are more or less done. So we expect to see the result of this next year. And as you remember, we have to grow with the Superbrands, and then we have to grow beyond core markets. And here, we see still some opportunities where we believe we will have growth in U.K., in Germany, in North America. And then we also have the third strategic pillar, and that is to grow through innovation and excel in marketing. We believe in the strategies, and we believe also we have the structure in place to deliver on the strategies for next year, if that answers your questions.

Okay. I have one final question. Sorry for taking multiple questions here. But the final one. Regarding the pilot stores here in the U.S., you said that you're going to give us some news before the year-end. But could you share anything with regards to how these insights into the consumer preferences, as you stated, have -- like what feedback have you gotten? It basically implies at least that you've gotten some positive feedback.

So it's very much about learning how is the best mix, how are the consumers' behavior in the store and so on. And this is, of course, important when you roll out a concept to have those learnings going forward.

Adrian and Valentina, it seems we have no further questions from the lines. Could you confirm that?

We have no more questions from the phone.

Thank you very much. Then we move over to the chat. Speaking of the U.S., we have a question from Danske Bank. The U.S. market size, how large is the U.S. as a percentage of your total sales?

So we actually shared for North America is what we've shared, and I think we'll stay with that when we have the Investor Day. So in 2024, it was about 3% of our total sales that we had direct sales in there. Of course, products tends also to enter maybe in a more indirect way to the U.S. market, but we have 3% sales. And since then, as you know, we've been growing in double-digit numbers. So simply put, should be north of 3% sales.

Thank you, Frans. And then a second question also from Danske Bank about raw material costs and margin outlook. With raw material like sugar and cocoa down year-to-date, how do you see this impacting your cost and sales in 2026 on this, all else equal, do you expect margins to be stronger or weaker going forward?

Well, so our midterm target is to reach at least 12% by 2027, and we're not there yet, 11.4%. So obviously, we are intent to improve on the margins. And as I mentioned, on the Branded Package segment, we used to be above 14%. So it's -- this is not greed. This is actually recovering the margins that we have lost, and we will do that by continuing to invest behind our brands and in innovation. And it's a critical part of the new strategy is about stepping up our marketing innovation. I think it's going to be a win-win-win again for us, for our customers and for the consumer. So the margins will improve.

Then how does the raw material and pricing go into this? So we'll stay with what we said before here, which is that we will price for the cost. And of course, in the past, we've also lowered the prices at times when they have come down, but we have to look at the whole portfolio, and we have to also look at the variance versus when we took pricing the last time in that market because the pricing is not -- let's say, it's not always exactly going at the same time in each market. It depends on the contracts. So we will price for cost.

Very good. And then the next question also from Danske Bank is about the IKEA global partnership. How has your global partnership with IKEA developed? Do you think which refers to the quarter?

Yes. So the cooperation progress according to plan. So the last year, we had an agreement with IKEA in Sweden, but it was only limited to IKEA Sweden. And this year, we signed a global contract with IKEA. I said, it's progressing according to plan. And in the next quarterly release, we will give you a more detailed update about how it's progressing with IKEA.

Thank you, Katarina. And then also 2 more from Danske Bank. First one is about the M&A pipeline. How does your acquisition pipeline look like? Are there any companies you are currently in discussion with?

Number one, [ Emmanuel ] thank you very much for asking a lot of questions. It's a lot more fun. But now unfortunately, obviously, we can't get into any specifics. But I think the most important aspect here, and Katarina emphasized it in the beginning as well, which is that M&A for us is an accelerator. We can deliver these financial targets without an M&A. So we're not going to jump into something unless it really makes business sense, and it helps drive the strategy forward. So -- but of course, we are open to it, and we're being approached and we're looking at things, but we're not going to just jump on to something.

Very good. And then the final one from Danske Bank. On Pick & Mix, how much is volume growth versus price? Any particular market you want to highlight during Q3?

So what we've said in the past is that we don't separate price from other things. And part of the reason for that is -- and Pick & Mix is a great example because the pricing model will look different between customers depending on what type of assortment they have contracted with us to carry. For example, if there's more chocolate or less chocolate, it has to do with how often they want our merchandisers to refill and clean the shelves, if this should happen over weekends to have continued strong sales on Saturdays, not only on Fridays and whatever -- like there's a very complex setup. And if I would give you a price number, then every customer who had seen a lower price increase than that will be happy and they will be silent. But everyone who thought that they got a higher price increase than that, they will be calling us and complaining.

So it's not really a fair number to give. I think what I can say, however, is that Pick & Mix, and we said this before, is clearly on consumer trend. It's about individualization. It's about plastic free, it's in-store, arguably entertainment. Consumers spend a lot of time in front of Pick & Mix shelves when they pick their fruit and their meat, where cereals and stuff, you just throw that into the cart when you're shopping. So it is a fantastic segment of confectionery and there is volume growth. There's real volume growth in there.

Thank you, Frans, and thank you, Emmanuel, at Danske Bank. We move over to DNB Carnegie. How do you see the impact from the lower cocoa prices in terms of lag or total impact going forward?

Yes. So again, so obviously, when we are having conversations with our customers, we do that based on the world market prices. But then you have the different thing, which is how long time does it take to get the pricing, how much inventories do you hold, what kind of -- what have you contracted? And I would assume it's the same thing for all our other peer companies out there. And so this will vary. What we will do is we will continue to build our margins, and we will continue to execute fair pricing.

Thank you very much. Frans, I think there's another question on Pick & Mix, but we, I think, have answered that already previously through to the Danske Bank question.

Good. Operator, any last questions from the telephone lines?

No more questions from the phone.

Thank you. That concludes our event. And we take, of course, the opportunity to remind everyone of our upcoming IR events. Our next report, the Q4 report is published on the 4th of February, and that's followed by an investor lunch in Stockholm arranged by Danske Bank on the 5th, the following day. But before that, quite a lot is happening. Next week, we attend the Berenberg Pan-European Discovery Conference, U.S.A. and then also after that, have a planned visit to Ljungsbro in Sweden together with Danske Bank.

It's time to conclude. And before we meet again, we, of course, hope that you get the chance to enjoy our wide portfolio of confectionery products during many joyful occasions. Thank you for today.

Thank you. Bye-bye.

Thank you. Bye-bye.