Borregaard ASA (BRG) Earnings Call Transcript & Summary

Good morning, and a warm welcome to this Capital Markets Day for Borregaard. My name is Tom Erik Foss-Jacobsen, and I'm the CEO of the company. I joined Borregaard in 1996 and have been a member of group executive management since 2007. During my career, I held a range of commercial and leadership positions, leading our Specialty Cellulose business from 2007 to 2019 and our BioSolutions business from 2019 to 2025, before becoming CEO in August 2025. Having spent nearly 3 decades with Borregaard, I feel privileged to have been part of the journey that has transformed the company into a global leader in sustainable specialty chemicals. Most importantly, I have had the opportunity to work alongside many talented colleagues who made that transformation possible. Today, we look forward to sharing how we will continue to build on that strategy and create greater value in the years ahead. Let me briefly walk you through today's agenda. We have structured today into 2 parts with a Q&A session following each part. In the first part, we will start with the overall Borregaard story and how we intend to continue advancing our specialization strategy and delivering greater value. We will then focus on BioSolutions, including our technology platform, innovation pipeline and growth opportunities in agriculture and how we're winning new customers and entering new markets. In the second part, we will turn to BioMaterials and our manufacturing platform and our financial ambitions for profitable growth towards 2030. Throughout the day, you will meet a broad Borregaard team and hear directly from several of the leaders responsible for executing our strategy. Among them is our Business Director, Agriculture, Eduardo Pereira, who is presenting at CMD for the first time. Agriculture has grown significantly in recent years and represents an attractive opportunity for future growth. Before we begin, just a quick reminder to those of you watching the webcast live that you're welcome to submit questions at any time during the event, and we will address them during the dedicated Q&A sessions. I would also like to introduce our moderators for today's Q&A sessions. Seated at the table beside the stage here are Elliott Jones, analyst at Danske Bank; and Ole-Petter Sjøvold, analyst at SB1 Markets. They will moderate the Q&A sessions and help facilitate your questions throughout the day. With that, let's get started. The title of today's presentation is scaling presentation -- excuse me, scaling specialization and delivering greater value. Those 5 words capture both what Borregaard has achieved and where we are heading. Over many years, we have transformed a traditional industrial business into a highly specialized global company with leading niche positions built on renewable raw materials and deep expertise. That transformation has delivered strong growth, improved margins, high returns on capital and significant shareholder value creation. Importantly, today's CMD is not about introducing a new strategy. It is about demonstrating why our strategy remains highly relevant, where we see attractive opportunities ahead and how we will continue to create greater value from the platform we have built. Before discussing -- our ambition is clear: to continue growing organically while creating greater value through specialization, productivity and disciplined capital allocation. Throughout the day, we will show how we intend to translate these opportunities into profitable growth. The common theme is simple. We are scaling what already works. Before discussing the future opportunities, let me start with the platform itself. Borregaard's strength is built on our unique integrated biorefinery. From a renewable raw material stream, we create a broad portfolio of high-value products serving multiple applications, industries and end markets. Across many of our applications, we help customers replace fossil-based alternatives with specialized bio-based solutions. We utilize virtually all components of the wood, continuously shift our portfolio towards higher-value applications and build resilience through diversification. Today, we serve around 3,100 customers across 100 applications and 100 countries. A key driver of Borregaard's successful journey has been our specialization strategy. Rather than competing in commodity markets, we focus on specialized positions where performance matters, where customers value our deep expertise and where barriers to entry are significant. This strategy has created leading positions across our businesses. Today, we are the clear global leader in lignin-based biopolymers, a leading supplier of specialty cellulose, the world's only producer of wood-based biovanillin, a significant producer of advanced bioethanol and a leading producer of fine chemical intermediates for contrast agents. Innovation and a strong culture of continuous improvement are embedded throughout the organization, enabling us to continuously develop new products, enter new applications, strengthen customer relationships and increase operational productivity. This is the highly diversified and resilient business model we will continue to build on. The best evidence that our model works is our track record. Since becoming a listed company, we have delivered strong and consistent value over time. Return on capital employed has remained above our long-term target of 15%. EBITDA margins have improved significantly. Earnings per share have increased substantially, and our dividend has grown strongly and shareholders have seen attractive returns over time. The important point is what has driven that value creation. It has not been volume growth. It has not been financial engineering, and it has not been favorable market conditions alone. The primary drivers have been increasing specialization, innovation, continuous improvement in our operations and disciplined capital allocation. We have consistently moved our portfolio towards the higher-value applications we're in. We have strengthened our market positions, invested selectively, improved productivity and increased capacity for our high-value products. That combination has enabled us to create significantly more value from largely the same industrial platform. And that is highly relevant as we look ahead because the same underlying drivers remain available to us today. So the value creation model is proven. The opportunity now is to build on that success. Why do we believe Borregaard is better positioned today than a few years ago? The external environment has become more demanding, markets are more volatile and input costs and currencies fluctuate more than they did in the past. Despite these challenges, our performance has improved significantly over time and remains at historically strong levels, demonstrating the quality and resilience and also the adaptability of our business model. Operationally, our manufacturing platform is performing well. We have continued to invest in capacity, specialization, cost competitiveness and sustainability while strengthening our organization and enhancing the capabilities needed to support future growth. Most importantly, we see a stronger set of opportunities today than we did a few years ago. Demand for high-performing and sustainable solutions continues to grow across several high-value markets, while also the regulatory developments are creating new opportunities across our businesses. At the same time, the investments we have made and those currently underway are strengthening our ability to capture these opportunities while supporting continued profitability. The investment case today is not only that Borregaard is stronger than before. It is that we are better positioned at a time when the opportunities ahead are becoming larger and more visible. When we discuss the future today, the starting point is therefore not a turnaround story. The starting point is a stronger platform, and the next phase is about scaling what works. This slide summarizes how Borregaard creates value. Growth alone is not our objective. Many companies can grow revenues. What matters is converting that growth into value. At Borregaard, we do this through 2 mutually reinforcing priorities. The first one is specialization and innovation. By moving towards higher-value products, increasing our presence in attractive markets and strengthening niche leader positions, we create more value from existing production volumes. The second is productivity and cost discipline. We continuously improve the asset utilization, the energy efficiency, automation and digitalization while maintaining strict cost discipline. These 2 dimensions are working together. Specialization increases the value of what we sell. The productivity improves efficiency and margins. Together, they increase value creation per employee and improve returns on invested capital. As the chart shows here, value creation per full-time employee increased by an average of 8% annually from 2020 to 2025. This dual focus has been a key contributor to Borregaard's performance over many years. And as you will hear throughout the day, this remains central to how we intend to create profitable growth going forward. The remainder of today's story can largely be summarized through 5 value creation levers. The first lever, specialization, remains the most fundamental. Expanding further into specialized applications and strengthening our competitive positions improve the value we create from every tonne we produce. The second lever is capacity. Targeted investments and operational improvements enable us to produce more specialty products and capture additional growth opportunities. The third lever is geographic scaling. Many of our strongest products still have significant growth potential in markets where penetration remains relatively low. Around this world, many potential customers have yet to discover how Borregaard's solutions can help improve their operations and create value for them. The fourth lever is productivity and cost discipline. Continuous improvements in productivity, energy efficiency, automation and cost management help protect margins, strengthen competitiveness and support profitable growth. The fifth lever is an external one. Across industries, the sustainability trends and regulatory developments increasingly support the shift towards bio-based alternatives, creating opportunities across several of our businesses. Taken together, these 5 levers build on the same proven drivers that have supported Borregaard's performance over many years. And give us confidence in our ability to deliver continued profitable growth in the years ahead, not through broad expansion, not through chasing volume, but through disciplined allocation of resources towards the most attractive opportunities. Borregaard is entering the next phase from a position of strength. We have a unique biorefinery platform, highly diversified revenue streams, strong and specialized market positions and most importantly, a proven model for creating value. The story forward is, therefore, not about changing strategy. It's about being even more selective in where we are focusing our resources. We will continue increasing exposure to higher-value products and applications. We will invest selectively in capacity supporting growth in specialty markets. We will build on proven successes by deepening our presence in high potential markets and expanding into new geographies. And we will maintain discipline in our operations, costs and capital allocation. Our ambition remains clear: to deliver sustainable organic growth, strong profitability and attractive returns. In short, same strategy, sharper priorities, greater value creation. Today's CMD focuses on what we believe will be some of the most important drivers of value creation going forward across our BioSolutions and BioMaterials businesses and also in our manufacturing. To begin, I would like to introduce Knut-Harald Bakke, who joined Borregaard in 2019. He became Executive Vice President for BioSolutions in August 2025. Prior to his current role, he served as Director of Energy and later as Director of Investor Relations, so a familiar face to many of you. He holds a Master of Science in Industrial Economics and Technology Management from the Norwegian University of Science and Technology. Drawing on 14 years of commercial, operational and strategic experience, Knut will take us through how we're capturing the significant growth opportunities ahead in BioSolutions. Knut, the stage is yours.

Thank you, Tom Erik. BioSolutions has a strong platform with significant untapped value. In this part of the presentation, we will show how BioSolutions can capture more of that value by scaling what already works. I will begin by describing the foundation we are building on, then explain how we prioritize the portfolio and finally outline 3 pathways to greater value creation. Let me start with the foundation. BioSolutions has developed strongly over the past decade with specialization as an important driver. The chart on the right shows the development in sales revenues. The volume split beside it is equally important. Specialties represent around 60% of revenues while only accounting for 28% of volume. Today, specialties include, among others, biovanillin, battery additives, oilfield chemicals and the high end of the agriculture portfolio. This illustrates the value of shifting the portfolio towards applications that create greater customer value. But the opportunity is not limited to products currently classified as specialties. Most of our volume still is in industrial and construction. Also here, we can move up the value ladder through more specialized applications, more advanced formulations and stronger customer positions. This is the key point. We see significant headroom to create more value from the existing volume base rather than relying on volume growth alone. Our broad portfolio gives both resilience and opportunity. But it also means we need to be very deliberate about where we focus our efforts. To understand those opportunities, let's first look at the capabilities we already have in place. The reason we see so many opportunities is that the starting point is strong. First, we have unique technology and expertise. We combine renewable raw materials with leading technology and deep application expertise to develop differentiated solutions across a wide range of applications. Second, we have proven customer value. We serve 2,800 customers across industries and geographies with documented performance and global reach. Third, we have already established specialty solutions across agriculture, industrial specialties and consumer ingredients. Together, these strengths give us a broad range of growth options. Technology is often not the limiting factor. In many areas, we already understand what we need to do technically. The bigger challenge is identifying the most important customer needs, understanding where we can create the greatest value and concentrating resources behind the opportunities that matter most. We have many opportunities, but we cannot pursue all of them with the same intensity. That is why clear portfolio priorities are essential. This framework translates opportunities into priorities and resource allocation. The horizontal axis reflects the strength of our position, including customer relationships, commercial proof and how we win. The vertical axis reflects realistic value growth potential based on market attractiveness, customer demand and our ability to differentiate. In the top right, we have our core champions. Plant nutrition is one example, an established position with proven customer value and attractive opportunities across customers, applications and geographies. Our priority is to strengthen and expand these businesses. In the top left, we have our emerging stars. Fertilizer coating is one example. The opportunity is attractive and close to capabilities we already have, but broader commercial validation is still required. Here, we invest selectively against clear milestones. Mature positions such as concrete admixtures remain important businesses. We protect these positions, optimize the mix and improve the businesses. In constrained segments, such as dyestuffs in textiles, growth potential and returns from additional resources are less attractive. We, therefore, limit incremental spending while managing the existing business responsibly. The important point is that this is not just a way of describing the portfolio. It guides where we allocate commercial attention, innovation resources and capacity. These priorities lead directly to 3 pathways to greater value creation. Let me briefly explain those 3 pathways. First, we scale our core champions. We will win more customers and strengthen proven positions, including plant nutrition, crop protection, animal feed and gypsum boards. Second, we move up the value ladder. We will shift more of our volumes towards applications where performance, formulation expertise and regulatory capabilities command higher value. Third, we expand geographically. We will take proven products and customer solutions into new markets where our current penetration is relatively low. These 3 pathways reinforce each other. A core champion can expand into new geographies, an established industrial or construction application can move up the value ladder and a validated emerging star can become a future core champion. We see substantial untapped potential in the portfolio we already have. In many cases, capturing that potential is as simple and as difficult as identifying customer needs and connecting them with solutions and capabilities that already exist in BioSolutions. Digital tools and AI can help us connect customer insights, market signals and technology expertise more effectively, but they do not replace being close to customers. Local commercial and technical presence remain essential. This is focused growth, primarily built on an existing platform, proven customer value and capabilities we already have. The objective is to increase contribution margin in absolute terms while making effective use of the capabilities and asset base we have. The next part of the presentation will make this more tangible. Guro Elise Fredheim is our CTO. She holds a PhD in biopolymer chemistry and has more than 20 years of experience from innovation and leadership roles within Borregaard. Eduardo Pereira is Business Director, Agriculture. Since joining Borregaard in 2002, he has held a range of commercial roles across applications, regions and markets and today leads our agriculture business globally. Anders Sjöde is Vice President, Sales. He holds a PhD in wood chemistry and has nearly 20 years of experience across innovation, business development, project execution and commercial leadership within Borregaard. Together, they will show how we scale proven winners through specialization, market penetration and geographic expansion. Guro will begin with our portfolio, pipeline and competitive position. Guro, the floor is yours.

Thank you, Knut-Harald. I will give you an introduction to our unique product properties and the diversity of the end markets we serve within BioSolutions. The core of our offering are high-performing products that can be tailored to deliver cost competitiveness in the end application. They are multifunctional, a concept I will explain in more detail later and valued by customers for their robustness in use. We also support our sustainability claims with strong documentation, including life cycle assessment and environmental product declarations for all our products globally. Our products span a wide range of physical properties, enabling us to serve markets with different growth drivers and economic cycles. And the first area is the binding applications, where our products improve strength, durability and process efficiency. Examples include animal feed and crop protection, which you will hear more about later. A second major area is dispersing and rheology control, where our products help ensure stability, flowability and uniform distribution of, for example, particles across broad application areas from construction materials such as gypsum and board to crop protection formulations. And these products typically improve processability, energy efficiency and end product performance. We also create value for our customers through crystal growth control, helping to control, for example, precipitations in high-end applications such as batteries and oilfield chemicals. Our platform also extends into flavors and fragrances, where lignin-based biovanillin is used in food, fragrances and personal care applications. And our products also have additional features such as antioxidant complexing or UV protection properties. And these properties come on top of the other features mentioned. And in several applications, our products are valued for the multifunctional mode of action. And taken together, this wide range of properties and applications is what gives us a strong competitive advantage. There is a unique application and technical know-how in the organization founded in a 100-year history within Lignin business. And the product and application know-how, customer-specific tailoring and global market reach builds barriers to entry as well as our basis for further specialization. Borregaard holds a strong competitive position despite operating in a fragmented and highly competitive market. The competitive landscape can be divided into 4 broad categories. Within lignosulfonates, Borregaard is a clear global leader. We combine the industry's broadest product platform with decades of technology development, application expertise and market knowledge. In addition, our global manufacturing and commercial footprint enable us to provide reliable supply across all key markets. Several regional lignosulfonate suppliers exist, including Domsjö, Sappi, Nippon Paper and various local producers in China and Russia. Please also note that other types of lignin, for example, standard kraft lignin and soda lignins are not applicable for lignosulfonate applications. We compete not only with other lignosulfonate producers, but also with a broad range of synthetic chemistries, including naphthalene sulfonates, polycarboxylates, EDTA, phosphonates. Importantly, this is not a winner takes all market. For decades, lignosulfonates and synthetic chemistries have coexisted with customers selecting the solution that provides the best balance of performance, cost and sustainability for their specific need. And Borregaard has successfully maintained and developed our position alongside these fossil-based alternatives. We also compete with a range of bio-based alternatives, including starch-based products, cellulose derivatives, sugars, amino acids and seaweed-derived materials. Many of these technologies target specific application niches and faces limitations related to performance, scalability, economics or also competition with food resources. In many applications, customers do not choose a single technology. Instead, they combine multiple ingredients and optimize formulations to achieve the desired performance at the lowest cost in use. As a result, competitive success increasingly depends not only on the performance of the individual component, but also on the formulation synergies, compatibility and application-specific optimization. Borregaard's competitive advantage extends beyond the product itself. Our technical experts recruited from the end-user industries in combination with our R&D organization have in-depth knowledge of the customers' applications. We operate dedicated application-specific test laboratories, including, for example, plant nutrition and seed formulation facilities. This application expertise enable us to evaluate products and formulations in the end applications to find the best solution for the customer. Our customers do not buy chemistry. They buy performance. And Borregaard wins by understanding the application and the customer pain points better than the competition and translating that into value. Let's continue with innovation. Our innovation strategy is focused on turning strong market positions and deep technology expertise into profitable growth. Our innovation portfolio is prioritized according to 3 selection criteria. We focus on projects within core champions and emerging stars, meaning application areas with a high margin and where we either have or we see the potential to develop a strong market foothold, referring also what you heard from Knut-Harald. This means we prioritize projects with high-value potential, enabling us to move up the value ladder. And third, innovation must be driven by a clear market pull and customer needs. And this matrix, as you see here, illustrates our innovation portfolio. In the down left corner, we have projects focusing upon new products into new markets, whilst in the upper right corner, we have product line extensions into existing markets. So down left, higher risk, upper right, lower risk. As you can see, the portfolio is weighted towards the top right corner, the core champions, meaning with product line extensions and towards existing markets where we have a strong foothold. Here, you find projects such as biostimulants and gypsum board and crop protection, where we have significant application knowledge and current market access. And you will hear more about these from my colleagues in the coming presentations. If we go down the right, we have product line extensions into new markets such as biocontrol and Fertiliser coating, where our existing products and technology platform create differentiated solutions in new end markets. If you go down left corner, we have more exploratory opportunities with new products into new markets, including home care and emerging feed applications. These are longer-term, higher-risk projects. And finally, we have new products going into existing applications. And in the coming slides, I will tell you a bit more as to our project upon granulated lignin. The takeaway is that we have a strong innovation pipeline with clear priorities. The portfolio consists of core champions and emerging stars, building on our strength to improve likelihood of commercial success. And differentiation is central to how we create value and protect our product position. And we are the first lignosulfonate producer globally to offer lignin products in granulated form. Our demonstration plant has been operational since the first half of 2026 with a capacity of 1,000 tonnes, and we can deliver product in granulated form to selected end markets. Importantly, this innovation is driven by market pull. Customers are looking for products that are safer, easier and more efficient to handle. Granulation provides clear benefits across the customer value chain. The granulated products improve environment, health and safety with minimal dusting, supporting a cleaner working environment and improved handling. It also enables higher productivity at the customer site, reducing time for processing. And finally, it improves logistics, including transport and storage. The technology will be applied to a selected range of our products for key markets. For our customers, this means operational savings as well as overall better user experience. For Borregaard, it strengthens differentiation in the lignin market and creates an opportunity to capture more value from our product portfolio. And we will now show a video demonstrating the difference between handling a standard lignosulfonate product in powder form versus handling a lignin product in granulated form. And the standard powder product is to the right and the granulated lignin is to the left. And as you can see, the granulated product flows much more easily and creates far less dust. And if you can imagine this at industrial scale, the impact becomes even more significant. So this is an example of how we combine technology with understanding of customer needs to move up the value ladder. Thank you for your attention. Now I'll give the word to, Eduardo Pereira.

Thank you, Guro. Good morning. Today, I will explain why we are confident agriculture will continue to be a major contributor for Borregaard future growth and value creation. Agriculture accounts for 45% of BioSolutions revenues and around 25% of Borregaard total revenues. It has delivered strong growth over the last years, and we believe the best opportunities are still ahead of us. But before talking about Borregaard, let's start with the challenge farmers are facing today. Agriculture uses around half of the world's arable land, and around 75% of that is used for livestock production. It accounts for roughly 70% of the freshwater withdrawals, and it has a significant contribution of the global greenhouse gas emission. At the same time, farmers are dealing with soil degradation, nutrient losses and declining soil quality in many regions. These challenges are real, and they are not going away. Food and animal protein demand continues to grow. Climate conditions are becoming less predictable. Natural resources are under pressure. Regulatory and consumer trends require more sustainable farming practices. These challenges are driving demand for solutions that improve productivity, reduces losses and support more sustainable agriculture. Agriculture is changing and moving from input intensity to input intelligence. The focus is no longer on using more inputs. It's on getting more value from every input used. We see these trends in 4 important areas. Smart fertilizers programs where farmers are increasingly looking for ways to improve nutrient use efficiency. This includes crop-specific nutrient programs, micronutrients and digital agronomy tools. The goal is better performance, lower losses and higher crop quality. Biostimulants are becoming a normal part of crop nutrition programs. They help improve nutrient uptake, plant resilience and crop quality. This is one of the fastest-growing segments in agriculture. Farmers and regulatories increasingly expect the same or better performance with a lower environmental impact that requires smart formulations, better delivery systems and improved efficiency. Advanced dispersant, adjuvants and biological formulations help achieve these goals. The same trend is also visible in animal production. Livestock producers are looking for higher feed efficiency, better nutrient utilization and lower environmental impact. Solutions such as feed binders, bypass proteins help improve animal performance while reducing waste and emissions. Just like all agricultural sectors, animal nutrition is becoming more precise and more data-driven. So the next question is, how is Borregaard positioned to benefit from this shift in agriculture. We have an extensive and diversified agriculture offering, split in 3 main segments: plant nutrition, crop protection and animal feed. Plant Nutrition is our fastest-growing area. It includes biostimulants, micronutrients, fertilizers and seed coating and granulated fertilizers. These applications help improve nutrient efficiency, crop performance and productivity. Crop Protection remains our largest and most established platform. Here, we support traditional crop protection, biocontrol solutions and adjuvant systems. Our technologies improve stability, compatibility and overall performance in the field. The third area is animal feed. Here, our solutions improve pellet quality, feed efficiency and protein utilization. What is important is that all 3 segments benefit from the same long-term trends we discussed on the previous slide, helping farmers and food producers get more value from every input. At the bottom, you can see the estimated annual growth rate in the different end markets. Plant nutrition is the fastest-growing area, and we expect that our business to grow faster than the end markets due to performance and sustainability. Crop Protection remains a large and resilient market, where we also expect to exceed market expectations due to some of our most advanced products in multi-active formulations. Animal feed provides a stable growth with growth of 3% to 5%. Together, this business gives us both solid growth and resilience. But let's be more specific. Plant Nutrition is our main growth engine. It has delivered strong growth over the last several years and will continue to deliver strong growth going forward. I'd like to highlight 3 growth areas. First, biostimulants. We already have commercial products in the market, including EU CE-marked products. It indicates that our product complies with EU health, safety and environmental protection standards. Second, micronutrients. We offer ready-to-use solutions that simplify implementation for customers. Third, fertilizer coating. These technologies improve nutrient efficiency and support high crop yields. The winning formula is a combination of innovation, performance and scale up. First, innovation. Our field trials help customers demonstrate performance and support product claims, saving customers time and accelerating their product introduction. Second, performance. We generated validated nutrient use efficiency results across multiple crops and applications. Third, scale up. Many of these solutions can be scaled up across regions, customers and formulations. This creates opportunities to grow faster than the underlying market. The chart on the right illustrates this journey. Over time, plant nutrition has become a significant contributor to our crop performance revenues, consistently growing faster than crop protection. But while Plant Nutrition is our fastest-growing segment, animal feed is another attractive market with a different growth profile. Our business is built around 3 main application areas: pelleted feed, feed emulsions and bypass proteins. These solutions help improve feed efficiency, pellet quality and nutrient utilization. What makes this business attractive is our ability to combine innovation with application expertise. Again, the winning formula is the combination of innovation, performance and scale up. The first pillar is innovation. New products create opportunities, both with existing customers and in new markets. The second pillar is performance. Changing regulations create opportunities for approved solutions. And the third pillar, it's scale up. We still see significant growth opportunities, especially in pelleted feed application. The chart on the right shows the strong growth achieved in animal feed over time. This growth demonstrates our ability to create value even in a mature market. In summary, our agriculture portfolio combines leading positions across plant nutrition, crop protection and animal feed, all supported by strong long-term trends in productivity, sustainability and resource efficiency. What differentiates Borregaard is not only our high-performing products with strong market positions, but also our deep application expertise. Our dedicated agriculture team with more than 50 professionals brings together agronomists, veterinarians, formulation specialists, application experts, laboratory and R&D capabilities, many with extensive experience from the agriculture industry. Our sustainability credentials and our ability to help customers meet increasing demanding in regulatory requirements position us well to scale proven winners, accelerate growth and create increasing value in the years ahead. Thank you. Now I will leave you with Anders. Anders, the floor is yours.

Thank you, Eduardo. Up until now, we talked about the platform, the portfolio and how we prioritize opportunities. Now I would like to bring this down to 2 very concrete examples. Both illustrate the same principle, but are somewhat different. The first is replacement of synthetics in gypsum boards, and the second is geographical expansion. At the first glance, they look very different. One is a new application opportunity. The second one is a new market opportunity. But in reality, they're driven by exactly the same logic. We start with existing products, existing capabilities and proven customer values and then we scale. No major technology leap, no new production platform, proven customer value, and that is what we scale. It's just disciplined commercial execution built on strengths we already possess, and that's why we call it new customers, new markets, same winning formula. Let me start with gypsum board. This is one of our most exciting examples right now, a small opportunity becoming a real growth platform. Historically, the industry has relied on synthetic additives such as polynaphthalene sulfonate and polycarboxylate ethers. For many years, manufacturers had little or no reason to change. But the market has changed. CO2 targets, regulations, rising additive costs, supply chain uncertainty suddenly the discussion is different. That creates an opportunity for us. We have a sustainable solution that replaces synthetics on a one-to-one basis. What's particularly encouraging with this is that it's no longer a laboratory story with more than 200 R&D tests, successful plant trials and commercial use already during 2026. Here is a key reflection. Sustainability starts the discussion, performance decides the outcome. We are invited by our customers to the table because we are sustainable, but they buy from us because the product performs. So the job ahead is no longer proving the concept, it's scaling it. Every new plant adds additional volume. And with a 10% to 20% global replacement, this will allow us to have a 4% to 8% growth rate within Borregaard's Construction segment in the years to come. So plant by plant, customer by customer, geography, that's how we build our core champions. If gypsum shows how we win in new applications, geographical expansion shows how we win in new markets. The most important part about this slide is not what we're saying. It's actually what we are not saying. We are not building a new business, not developing fundamentally new products and not making large speculative investment. Instead, we ask a simple question, where do we already have solutions that work and where are they underrepresented? There are many markets where Borregaard has limited penetration despite highly relevant products and proven customer value. The map on the right side is not a sales forecast. It highlights untapped potential. The darker countries represents areas where the market has developed faster than Borregaard's footprint. The economics are appealing, modest investment, low technology capability risk, limited assets needed. So this is built on existing strength, a second growth engine for BioSolutions. The playbook itself is simple. We start with proven platforms, then choose markets carefully. Not every opportunity deserves an investment. And today, that points us towards selected parts of Asia, Oceania and Latin America. Then comes local reach. This is the part where I feel strongest about. One lesson I've learned throughout my career is that customers buy from people. Despite all the AI and digitalization we have around us, local presence and local engagement is the vital part for success. Without that, you can have the world's best product, but progress will be slow. Finally, once we have proof, we replicate and scale it. It's a little bit like franchising a good restaurant. You don't reinvent the menu every time you open a new restaurant. You simply find a new good location and you scale it. That is exactly what we're trying to do here. We will repeat it with discipline. This final slide brings it all together. And the secret is there is really no secret. The winning formula is straightforward. We take our market leadership positions with global leading positions across multiple segments, a unique product portfolio that solves real customer problems, application expertise built over decades, high barriers to entry. These positions are hard to attack. That is the foundation of BioSolutions. Focused innovation, a high-value pipeline with every project market pull driven. We do not invent and then go looking for a customer. The customer asks first and we solve the real problems. That is how we transform expertise into new opportunities and reach the market faster. Geographical expansion is where we scale proven winners, no experiment. We take what already works and move it into untapped geographic growth markets like Asia, Latin America and Oceania. The model is replicable, so every new market is faster than the last. And the 3, they reinforce each other. Leadership gives us customer insight, innovation turns insight into new opportunities and geographical expansion moves those winners into new areas. That is how we win. It's not growth built on hope and dreams. It's growth built on evidence, proven products, proven customer value and economics. So new customer, new markets, same winning formula.

Thank you very much, Anders. So that concludes the presentations in part 1 of today's CMD, and we will now move on to the Q&A session. We'll be joined on the stage here by Knut-Harald Bakke, and we will take questions from the audience and from those joining us via the webcast. Following the Q&A, we will take a short break, resuming with part 2 at 11:00. Elliott and Ole-Petter, please take it from here and moderate our first Q&A session.

And also in the audience and a microphone will make its way to you. But I guess I can start with the first question here on the BioSolutions side. So a key part of the specialization strategy has always been and will still continue to be shifting to the higher-value products. You highlighted an impressive chart at the beginning showing the growth of this. But the question is essentially, is there a theoretical ceiling as to what percentage of BioSolutions can be specialized? And if so, what level?

Yes. So if you start with what we have in place. So we have a unique raw material. We have the technology or at least we know what to do technically. So the bottleneck, if you like, is market and product development, which is really encouraging because we have the faith in our own hands. So the potential is it is significant. What we have explained here today is that our focus is on scaling what already works. Our focus is on the core champions in particular, because there, we are coming from a position of strength, and we see from today and going forward that there is a great value potential. So I will not give you any numbers. But for sure, the potential is significant.

I guess I could have a question related to that. Just sort of how do you sort of assess that investment opportunities in increasing your total capacity, sort of introducing Borregaard technology into this mix or increasing further capacity versus investing more into further specialization. How do you consider these 2 offensives against each other?

Our main focus is value growth. So moving up that value ladder. From our perspective, from a risk return perspective, that is the smart thing to do. But of course, if we, at some point, need or want more volume, we have the options and the toolbox to do that. And we are already doing that with the debottlenecking in Sarpsborg, we will get more also of lignin-based biopolymers. We will actually get more of everything, specialty cellulose and bioethanol. So that's a starting point in the short term. And as you point out, we have in the midterm options in the U.S. to expand by another 50,000 tonnes. And in the longer term, I think we can consider that a strategic insurance if we, at some point, wanted to build a greenfield plant, with the technology. But for the time being, our focus is on climbing that value ladder. And first of all, the volumes we will get from the debottlenecking in Sarpsborg.

Yes. And I also think it's worth remembering that a 5% to 10% capacity increase in Sarpsborg in big markets, I mean, we have 1.4 million tonnes of specialty cellulose, 890,000 tonnes of lignosulfonate. So these are highly valuable volumes when gradually phased in by Borregaard. But in these big markets, it's also a cautious approach to growing in that market.

I think we have a question.

Marcus Gavelli, Pareto. So you mentioned the geographical expansion, which will certainly be a big part of the growth strategy going forward. Could you just try to elaborate on how we should think about, call it, the sales and marketing expansion -- because certainly, you have a global base, which you can utilize. But coming into these markets, I would assume also will require some increased investments, I think modest investments was mentioned in sales and marketing. And just how we should think about the financial incremental steps in that journey?

So, like Anders pointed out, this is asset-light. So, it's mainly human capital, if you like, in the designated geographies. So, we are particularly looking into Oceania, Australia, Spanish-speaking part of Latin America, where we are significantly underrepresented today in terms of sales and some other countries, specifically in Southeast Asia. But to answer your question, I think it will vary between the different regions. A natural starting point is to find a small niche distributor that we can work with. We're not ruling out that at some point, we could perhaps buy one of those small distributors, or we can establish a sales office from scratch. So -- but the most of actions will vary across the regions. And certainly, what we're doing here is that we take proven solutions, things that we know work into new geographies, typically things that work in Europe and in North America into these other regions. So, from a risk perspective, of course, there are some commercial risks, but there's no technology risk. And it's, to a large extent, a risk that we can control. So, we can exit at any time if you want.

And also looking back at our Capital Markets Day 2 years ago, we mentioned, for example, Asia was one of the high-growth areas with agri being one of the, I would say, the most interesting area. Since then, we have opened a new office in Mumbai, where we have been and seen. We have recruited highly capable personnel on the commercial side, on the technical side, also have an R&D lab for agri and industrial specialties. And we have recruited people in Indonesia, Vietnam, China. And also, we have office in Brazil, South America, and we have well-established platforms. So this is also scaling what works. We will use those platforms to build on further.

Magnus Rasmussen, SEB. The strategy is sort of shifting a little bit to more towards scaling what works. You're framing this as a big opportunity, of course. But I also want to know, is it a reflection also of a bit of a challenging start to 2026 with more cost pressure. You're sort of taking a more cost cautious approach? And is it also a reflection of sort of a bit of a slowdown in new exciting product development?

No, I wouldn't say so. I think given the position that we have, perhaps one of our biggest risks is actually spreading ourselves too thin. So, what we're doing here is really positioning ourselves where we see we're coming from a position of strength. We have documented proven customer value. We are actually solving some pain points for our customers globally here. And this shift the structural drivers that we're seeing, for instance, in agriculture and gypsum boards, these things are at the nexus of performance, regulatory aspects and sustainability. And these are kind of sweet spots, if you like, where we want to be. So, we're sharpening the priorities a bit here. It does noth mean that innovation is not important anymore because it really is, as Guro explained. But we try to allocate resources behind the opportunities that we think matter most now.

I would also say, Magnus, that in today's environment, it calls for high discipline and a bit more focused approach. So with that comes clearer and sharper priorities. And as you've seen, we have through the year, taken down our exposure in bio-based investments. We have been doing assessments and reviews of our innovation portfolio, where we are focusing more on the near-term, midterm commercial high potential projects. Also, we have announced last quarter, we have a cost project where we will save NOK 150 million and fully realized in 2028. So, definitely, you're also right that we are looking carefully over what we're doing to ensure we have that discipline and our focus in what we're doing.

Another question, if I may. The oil price volatility that we've seen this year, also rising energy costs. Can you share some thoughts about what -- how you think about pricing sort of going into next year and also the opportunities versus oil-based alternatives that you often compete with? I'm assuming they might be struggling a bit.

Do I start?

You can start.

No, for sure. It's a volatile geopolitical situation and energy prices are on the rise. And for us, that means that variable costs are increasing for energy and energy-related costs, logistics costs. So we are in the business of selling specialties and buying commodities. So when these things happen, typically, our margins get a bit under pressure. So we may not, from one quarter to the other, be able to offset that cost increase. But over time, we should be able to do so. We see also that it affects some of the end markets. So some end markets are soft. But from where we're standing, strategically, we ask ourselves the questions, are we solving the most important customer challenges, and we think we are. So it does not -- it affects timing for us this market cycle, but it doesn't change the underlying value proposition of what we do and deliver to the customers.

Yes. I think we see some selective opportunities where it has impact on certain products where you could get more request for our products. I think you can also see that high oil price also means higher energy prices for certain industries and customers where that's the impact. But over time, we believe this is -- it's favoring Borregaard's products and solutions when more and more will look towards the bio-based solutions.

Maybe I can take one more. Just speaking of customer challenges. Farmers in recent times have seen significant -- farmer affordability has been very tough. Just in terms of agriculture, can you provide some color as to when we see a very high fertilizer price, is that typically positive or negative in terms of customer acquisition?

Yes, that's actually an excellent question. So there are several parts of our agriculture portfolio, right? It's crop protection, like Eduardo explained. That's the legacy. That's the foundation. So, it's -- up until today, it is the biggest part. Then you have plant nutrition growing at a very high pace, and we expect that to grow double digit percentage-wise going forward. So, to answer your question, intuitively, when fertilizer prices are on the rise, if you're smart, you buy the plant nutrition products because that enables you to everything else equal, use less fertilizer and have the same yield, for instance. And also in terms of climate change and changing weather patterns, these things makes the plants and the crops more robust, able to withstand so-called abiotic stress, droughts and frosts and so forth. So, these are really the kind of products for the future. But if you look at crop protection, what is happening and when we talk to our customers, because we see that crop protection in the first half of 2026 is significantly lower than last year. What is happening is probably that, as you say, farmer economics are under pressure. And then we see that the distributors, they get more cautious and then the formulators are building down their safety stocks. So, typically, we supply to the latter. So, if we believe what our customers are telling us is the truth, you have a softer end market demand at the customers, which is the farmer, which sort of gets amplified through this value chain back to us. So, who knows what the world looks like next year. But if you just assume that farmer economics stays exactly the same in 2027 as 2026. Everything else equal, we should do a little bit better in Crop Protection because safety stocks cannot be built down forever.

I have another question of sort of how you -- I mean, the core message from this in is sharp prioritization, right? So, how do you work differently in the company specifically? Like do you work any differently with the customers? Do you implement more systems to sort of see where the best ideas are? Or -- and how do you value sort of growth opportunities versus introducing more technological risk into new products?

So, if you remember that chart that Guro showed you, the axis where the degree of product familiarity, so the degree of technology familiarity to us and the degree of market familiarity. So, it is now weighted towards existing product lines, technology we know, markets we know fairly well. But as you can see, we are also in areas where there are new products into new markets. And as Guro pointed out, higher risk, but also high reward. So, typically, in these areas, qualification cycles are longer, innovation cycles are longer and customer conversion is more gradual. But over time, if they succeed, this would typically be new specialty areas to us. And the positive side of the fact that this takes time is that once you're in that formulation with the customers or once you're in their production process, you're in there for years, if not decades. So, that's what we're trying to do.

That makes sense.

And then just maybe go back to specialization again. You mentioned 60% of the revenues were linked to specialized volumes, but obviously just 28% by volumes are specialized. Can you give some insight into the EBITDA per tonne uplift for a specialized tonne versus a nonspecialized tonne?

Good question. So, the margin in relative terms is not necessarily that different. But in absolute terms, it makes one heck of this difference. So, what we're trying to do numerically is instead of selling a standard lignin product to $1 a kilogram, incurring, let's say, $0.40 a kilogram in variable costs, then you have a contribution margin of 60%. We're trying to use that same raw material in specialized processes and sell it for $10 a kilogram. Specialization also means things are more resource intensive. So, variable costs are up to $4 a kilogram. So the contribution margin is still 60%. But in absolute terms, that's what we're after. That's what we numerically are trying to do with the specialization strategy.

And it's an application or an area with 1,000 customers, 200 products. So it's a wide range here. And some of those products are definitely also helping farmers to get a better economy. And I'm sure that's what we'll see also the plant nutrition part going forward.

There's a question from online here. I think touched on it, but you stopped disclosing your R&D spend. However, as a percent of revenue, it had declined from 5% to 6% in 2016 to 2017 to around 3% in 2023. We also saw the innovation rate print a record low in 2025. Has innovation simply become harder, if that's why you're now talking about client-driven innovation?

Yes, it's right. Innovation was 3% of our spend in 2025. I think it is with innovation that you place bets like you do with start-ups, you place bets. And I think also that's why we have been looking carefully at our portfolio because some of these projects we've been working on, we've been working on for quite some time. And also some of these projects have had a longer time horizon than what we think is the right focus now. So that is also a reason for making sharper priorities. Like I said, we are focusing more on short-term, midterm projects. We do not have a target to take down our resources within innovation. But as a consequence of growth in revenues, that share has come down a bit.

And last question for me. With the example of the Gran products you showed on the video, how should we think about the split share of this value creation between you and your customer? How much -- like do you think when you go into this process and develop a product with the customer, are you trying to keep the 50-50% each of the value uplift you introduce to the product? Or how is this shared -- at least how do you think about this?

The question was on granulation.

I mean, as an example.

Yes. No, customers willing to pay for a product in a granulated form, those are the ones we are addressing. So, bear in mind, this is 1,000 tonnes demonstration plant. So, typically, we will start with niche markets. And in some market, it is a prerequisite to have it in granulated form, such as home care where we want to go in. So -- but this technology, it opens doors to new opportunities, but also to existing ones. It's an ability to differentiate. So, no, I mean, we need to figure out the value in use for our customers from this technology. So, at some point in time, perhaps we will make a bigger investment. But at this point in time, it is the 1,000 tonnes demonstration plant.

We're quite confident when we're starting to send out samples of these products together with others, it will be something many customers will like.

And just a question here on the agriculture subsegments, so plant nutrition, crop protection and seed. Can you provide any color as to the approximate percentages of the agriculture top line, how those 3 right now?

Yes. Yes. Again, Crop Protection is the legacy business. We've been in there since the '70s, and we enable a water-based solution as opposed to a solvent-based solution when the farmers spread the solutions or pesticides out on the field. That was the starting point. And that has grown steadily over the years. What you saw from Eduardo's slide is that from 2012, plant Nutrition was relatively low, a small business, but has grown significantly over the years. And to give you some color, everything else equal, by 2028, we expect plant nutrition to surpass Crop Protection in terms of value creation for Borregaard, everything else equal. And that is also from a strategic point of view, a good thing because, as you know, this crop protection business, there's some kind of cyclicality to it. So the higher plant Nutrition share, the less pronounced that market cyclicality will be in the future. So I will not disclose the split between Feed, Crop Protection and Plant Nutrition.

And animal feed is then not part of specialties, but part of our industrial business. So somewhat lower margins than in the specialties.

And just to touch on the batteries because in the previous CMD you held in 2024, you mentioned that you had some trials with global lithium-ion battery manufacturers. Have any of those trials progressed to commercial volumes? Or what sort of road map are you looking into there?

Yes. The question is on lithium ion.

We are still in key customer trials with, I would say, the big names, predominantly in China. Again, qualification cycles are long. So -- but when we get in, that will be a good moment for us. We have some small repeating orders. But to answer your question directly, it will not move the needle next year on profitability. We don't think so. But we are also now looking into the more second-tier companies in China that's working with sodium ion and silicon carbide anodes where we see that we have a performance that actually solves some problems for them. So early days, but that perhaps the innovation cycles are a bit faster there, so we can get faster traction. But early days, we are encouraged, but it will not move the needle on profitability next year.

And then maybe just one more for me before the break. I think also in the last CMD, you mentioned that it can be tricky to increase both volumes and specialty at exactly the same time. So given that, when we're thinking about potential new tonnage from debottlenecking coming in, should we expect then the -- initially the margins to be lower and then to kind of catch up in the years after? Or is there a different dynamic there?

Yes. So generally, when we introduce new volumes to the market, typically, we introduce that on the margin. So -- so to answer your question, we will introduce those volumes gradually and based on market demand. Initially, it may be that they will start going into industrial or construction applications. But over time, we will improve that mix. And our EVP manufacturing will get back to that in the next section, how we now plan to invest in new specialty lines that will help that transition.

All right. I see we're running out of time. So I think we'll go to a break and be back here at 11:00. Thank you very much. See you after the break. [Break]

Thank you very much. To introduce our next speaker, Gisle Johansen. Since joining Borregaard in 1991, Gisle has held several leadership positions across the company, spanning the manufacturing site in Sarpsborg, R&D, business development and fine chemicals. Since 2019, he has served as Executive Vice President, Specialty Cellulose and Fine Chemicals. He holds a master's degree in organic chemistry. And drawing on more than 3 decades of experience across Borregaard and his current role leading our Specialty Cellulose business, Gisle is ideally placed to discuss how we will continue to strengthen competitiveness and create value in Specialty Cellulose. Gisle, please.

Thank you for the introduction, Tom Erik, and good morning to all of you. Today, I would like to focus on how we continue to create and grow value in Specialty Cellulose. Our strategy is not built around becoming the largest producer in the market. It's built around value growth by becoming increasingly more specialized. Over many years, we have moved our portfolio towards applications where quality, consistency and technical support matters and where our softwood sulfide platform is an advantage. It's several years since we exited the textile viscose commodity market. That has strengthened our market positions and improved value creation. The next step is a continuation of the same journey. We see attractive opportunities in premium niches such as regulated applications and high-purity markets. Combined with our Biorefinery platform and the ongoing capacity expansion, this gives us a clear path towards even higher value creation through to 2030. Before discussing markets and growth opportunities, it's worth reminding ourselves what role Specialty Cellulose plays. We start with a renewable raw material, certified spruce softwood from living Scandinavian forests. From that material, we enable products that reach well beyond the cellulose industry itself. Our materials is used in pharmaceuticals, food, building materials and a wide range of other consumer products. And where our cellulose constitute from approximately 60%, up to 100% of approximately 50 direct customers' products. One implication of this is that most customers will seek to maintain at least two qualified suppliers due to the criticality of this raw material. What is particularly interesting is the scale of the full value chain we participate in. A relatively concentrated Specialty Cellulose industry supports thousands of downstream products and ultimately reaches billions of end users globally. Our cellulose represents from less than 1% up to 100% of the final consumer products, spanning from vegetable burgers, toothpaste and concrete to bioplastics and sausage casings. The total downstream value chain is estimated to exceed USD 100 billion. But the key point is that we are not selling into one market. We are part of a supply -- of supplying critical functionality in many different applications, industries and end users all over the world. That diversification creates resilience and provides numerous opportunities to identify and move into attractive niches where we can create additional value over time. The Specialty Cellulose market is approximately 1.4 million tonnes and remains relatively concentrated. The five largest producers account for more than 80% of global supply. However, not all producers are positioned in the same way. Many competitors still have significant exposure to commodity grades. Borregaard is different. Among the major producers, we have a market share just about 10%, but we are the only company that is fully specialized, and we have a sulfide spruce softwood platform, which is a must in some applications. This gives us a great flexibility across applications, grades and customers. The ongoing capacity expansion supports further value creation. When market conditions change like the building industry, we can redirect volume towards more attractive segments. That flexibility becomes increasingly valuable as competitive conditions evolve. We are currently seeing changes across several parts of the market, including the strategic review of the market leader and ongoing trade measures affecting certain regions. At the same time, geopolitical uncertainty is driving higher costs for energy, chemicals and logistics across the industry. This may support selective price increases going ahead towards 2030. When we look at the Specialty Cellulose market, as described in the picture to the right, not all segments are equally attractive. Our strategy is therefore, not to become a Turkish bazaar and grow everywhere. Our strategy is to grow where we have the strongest competitive advantages. In ethers, regulated applications such as food, pharma and personal care and niches within technical applications remain attractive. These segments have high barriers to entry and place greater emphasis on quality, documentation and technical support. They are favored by the capabilities of our plant to produce a full range of viscosities. In acetate, our focus is increasingly on premium niches such as liquid crystal displays, acetate yarn for textiles, specialty coatings and bio-based plastics. These are areas where performance and purity requirements are high and where our softwood-based product characteristics are valued by our customers. Rather than chasing market share broadly, we are selectively increasing exposure to the most attractive parts of the portfolio. Common for both segments in these applications is that customers' qualifications can take years, which creates barriers to entry for new suppliers. This slide is important because it demonstrates execution. Our strategy is not only about future ambitions, it's also about what we have already delivered. Several years ago, we identified and communicated a clear opportunity and ambition to move further into demanding high-purity applications, and we branded it Ice Bear. This required substantial investments in research and development, equipment, customer qualifications and long-term commercial development. Through the Ice Bear qualifications, we have -- we are successfully building positions in applications such as regulated ethers, LCD, acetate yarn, specialty coatings and biodegradable plastics, where our cellulose constitutes approximately 60% of our customers' products. Many of these applications are dependent on softwood raw material, and we have increased our acetate sales to these segments from a low level to an estimate of around 35% of total acetate sales in 2026. It demonstrates that we can identify attractive niches, qualify products, develop existing customer relationships and create value over time. That gives us confidence in the continuation of our portfolio development. Ethers represent another large and attractive area for continued growth. Here, the barriers to entry are significant and softwood and the sulfide process is mostly required to reach the necessary product specifications. Regulations, customer approvals and technical requirements limit the number of viable suppliers. This plays directly into Borregaard's strength. For decades, we have supplied biovanillin and fine chemicals to the most demanding food and pharma customers, which makes us unique in our industry. We have a broad portfolio, deep technical expertise and a leading position in sustainability documentation and certification. Our focus is particularly on pharma, food and personal care, but also selected industrial and high-purity applications where competition is limited. For example, high and ultra-low viscosity grade ethers. These markets fit well with our capability profile, which probably makes us the most advanced player in this segment, and it supports continued value growth. The key point is simple. Growth in ethers is not driven by volume alone. It's driven by growing in the right applications. And to quote a technical auditor from one of our larger customers, "I wish we could buy more from you." When we bring the pieces together, we have a clear road map towards 2030. This figure is an illustration of the direction we are going in. We will continue to improve our product and customer mix, expand capacity through de-bottlenecking and higher plant utilization and further strengthen our position in premium and regulated markets. As we have a very high flexibility in our manufacturing setup, it is fairly straightforward to move volume from lower value segments to increase our contribution margin. Importantly, our ambition is not growth -- our volume growth alone. The objective is higher value growth through a combination of increased facilitation, targeted capacity expansions and stronger product mix, combined with price increases in some segments. To conclude, our strategy can be summarized in three points. First, we continue to increase our exposure to the most attractive markets and applications. Demand for high-performance, sustainable and highly specialized cellulose solutions continues to grow across a range of end markets. We will further optimize our product and customer portfolio towards applications that performance, quality and technical expertise are valued and rewarded. At the same time, we will strengthen our position in high purity and regulated segments where barriers to entry are high and customer relationships are long term. Second, we leverage our unique biorefinery platform to capture these opportunities. Our integrated production model, operational flexibility and application expertise allow us to meet demanding customer requirements for quality, consistency and maybe most important, security of supply. These capabilities enable us to compete in markets where reliability and technical support are critical, creating advantages that are difficult for competitors to replicate. Third, expand capacity to accelerate value growth. Through targeted investments, de-bottlenecking initiatives and improved plant utilization, we are creating additional capacity that can be directed towards the most attractive growth opportunities in our portfolio. We allocate capital where returns are the highest and where the greatest potential to create barriers to entry and long-term value are present. Importantly, our growth strategy is not centered on volume growth alone. It is centered on increasing earnings and value creations through a more favorable product mix. All incremental capacity will be targeted towards higher revenue applications with stronger margins rather than commodity volume. This is not a change in direction. It is the next step in a strategy that has consistently delivered value, increasing our exposure to attractive markets, leveraging our differentiated platform and creating more value from every ton of cellulose produced. Thank you.

Thank you very much, Gisle. Then I'm delighted to introduce our next speaker, who is Ole Gunnar Jakobsen. He is our Executive Vice President for Manufacturing and Technology, including all our international manufacturing units. Ole Gunnar joined Borregaard in 1995 and has been a member of group executive management since 2006. During his career, he has held a variety of manufacturing and operational leadership positions, and he has served as the Plant Director of our Sarpsborg site from 2006 to 2025. He holds a master's degree in process engineering from the University of South-Eastern Norway. With more than three decades of experience from Borregaard operations, Ole Gunnar is uniquely positioned to explain how our manufacturing platform enables growth, competitiveness and long-term value creation. Ole Gunnar, the stage is yours.

Thank you, Tom Erik, and good morning, everyone. Over the next few minutes, I will show you how we turn strategy into results in our plants. One of my key messages is the strength in our continuous improvement culture. This is our single most important competitive advantage, and it's the hardest one for others to copy. Let me start with where we produce. The core of our manufacturing platform is the biorefinery in Sarpsborg. In addition, we have lignin plants in Wisconsin, Florida, Germany, the Czech Republic and the United Kingdom. The roles of the sites are different, and that is deliberate. Sarpsborg is the fully integrated biorefinery where wood is refined into Specialty Cellulose, lignin-based biopolymers, bioethanol and biovanillin. The other plants produce lignin for the local regions. And this is a global manufacturing platform that is very hard to replicate. Our lignin products are produced close to our customers with lignin plants across continents. This provides supply security across all key markets, and we are not dependent on a single site or region. In addition, we have flexibility. Production can be shifted across units and applications, allowing us to respond to changing market conditions. This allows us to produce regional qualities where they belong and scale a proven process across several sites. Then down to Sarpsborg, which is the foundation of the strategy. The sulfide biorefinery is a one of a kind and makes specialization, growth and stable earnings possible over time. This is where the most demanding and valued qualities are produced, and it's our main platform for technology and competence development. The Sarpsborg site accounts for more than 70% of the value creation in the group. Two factors makes it strong. The integrated value chain where processes in energy and competence are shared and the fact that we are highly self-sufficient with our own caustic soda and SO2 plants, water works and wastewater treatment plants. At full utilization of the raw material where every part of the wood becomes a product and then you have a really unique production platform. The message is simple, a one-of-a-kind biorefinery at the core, combined with a global and flexible network is very difficult to copy. I would say, probably impossible. This is what protects our margins and gives us room to grow in specialties. Continuous improvement is the core of the culture at Borregaard and our most important driver for value creation. Borregaard was an early adopter of a lean mindset. Over decades, this mindset has developed internally and in cooperation with external partners into the model we have today. The culture is the enabler and the result is higher output from the asset that we already have and the target is always the same, reduce energy consumption, improve yield, reduce costs and add more capacity to redirect volume to more specialized product with higher value. This gives earnings in the short term and stronger specialization and competitiveness over time. Every initiative is tracked from potential to realized run rate with a strict cost discipline. As an example, in the 2025 portfolio identified a potential of NOK 270 million, and we realized NOK 140 million through more than 50 different initiatives. We have a strong track record, and we still have a pipeline to take out. And the same applies for 2026. In Sarpsborg, we have 3 kilometers with connected plants and around 20 production units. The biorefinery is fully integrated with steam, biogas and energy systems, which gives cost and quality advantages. The biorefinery is also set up with its own caustic soda plant, sulfur dioxide plants, water works and wastewater treatment plants. All of these units are physically and technically connected and make the biorefinery highly self-sufficient. In addition, one improvement, one place, changes conditions for several others, creating an accumulation of returns. Keep this picture in mind for the next two slides as we talk through the expansion and energy. The expansion investment in Sarpsborg is a clear example of continuous improvement translated into value. An expansion that delivers improved mix, flexibility and returns. And those are the key takeaway messages. It builds on the principle of creating more value from the same asset base. The benefits do not come from volume alone, but improved product mix, lower energy and chemical consumption as well as improved yield. The project is progressing according to plan, and the main benefits will materialize gradually from second quarter of 2027. First, the de-bottlenecking itself. It has an expected capacity increase of 5% to 10% from second quarter of 2027. It is at low risk, which is in an asset that we already own and an investment with a well above return requirement of 15%. Secondly, it creates greater flexibility between products, markets and larger share of higher value specialization in the mix. And that is an important strategic point. This is not a volume investment alone. Thirdly, the expected developments towards 2030 is higher earnings from mix and volume and lower costs from improved yield, energy and savings and lower chemical consumption. The figure to remember is the 5% to 10% capacity increase and the return of above 15%. The chart puts number to it. We have averaged about 153,000 tonnes over the past 5 years, and we expect to reach around 165,000 tonnes from 2027 and onwards. 2026 is a transition year, and that's why the line is dashed. And below, you see the specialty projects following the de-bottlenecking. We will increase the specialty capacity in both lignin and cellulose by 15,000 tonnes and 10,000 tonnes, respectively. In short, more volume, better mix and lower unit costs from the asset that we already have. Our Climate investments are about much more than just climate solutions. Our Climate investments have been even more profitable than expected. They have given lower emissions, lower energy costs and higher energy flexibility. The mechanism is quite simple. Electrification and more use of own biomass replaces fossil natural gas. 30,000 tonnes of CO2 are removed to date with around NOK 45 million lower energy costs for 2026. And we have a further potential of 35,000 to 60,000 tonnes of CO2 per year. This comes from specific projects in our existing assets and where our own people continuously look for better ways of operating. The completed projects are already delivering sustainable cost reductions alongside significant emission reductions. And our pipeline follows the same logic, lower emissions, lower cost and higher flexibility. Digitalization and AI is the next step in our continuous improvement work. Not technology for technology's sake, but to capture more value from the asset that we already have. Reliability and data-driven decisions are already a part of how we work. Today, sensors and process data give early warnings of deviations and enable smarter maintenance. AI turn data into decisions that we can act on, gradually into more autonomous process optimization. This means higher up-time, improved yield, lower energy consumption and fewer unplanned disruptions. In specialty business, stable operations directly protects volume, quality and deliveries to customers. To summarize, we have a biorefinery and a global network that are almost impossible to replicate. We have an improvement culture that converts potential into realized run rate and a disciplined investment pipeline in an asset we already own. Everything we have been through points in the same direction. More capacity and a better mix from Sarpsborg, one operating model across our sites, cost and energy disciplines that protects margin and digitalization and AI that raises uptime. In short, manufacturing deliver higher earnings, stronger cash flow and better results. And this completes my presentation.