Polygiene Group AB ($POLYG)

Good morning, everyone, and welcome to our quarter 1 webinar for the result of Polygiene Group. We will take this into 3 sections. The first section will be financial update followed by business update and at the last section, we will take on any questions you may have. So with that, over to you, Niklas, for the financial update.

To start with an overall summary. We can see that sales, it was SEK 31 million versus SEK 41.5 million last year, which is around 20% -- 25% lower, 8.5% of that is driven by FX. I think it's important to remember that in most cases, our first quarter are the lowest quarter during the year. But last year, actually, the first quarter was the highest one. So if we would have used '25 -- 2025 Q1 as a run rate, that was actually 10% above the full year for '25. So it's a quite tough quarter to compare with. If you look come in the gross margin, we had an improvement. We had 69.5% versus 67.4%. It do include plus 2.5% in FX impact. But I think also here, it's important to look on the underlying numbers. And if you look on the segment, we can see the improvement both in Addmaster and in Polygiene versus last year. But the split between Addmaster and Polygiene has changed. So during this year, Addmaster is bigger than Polygiene and as Polygiene has generally higher margin, that has actually have a negative impact on the overall margin, but we see an improvement in the margins year-on-year. Operating cost was below last year with almost -- with SEK 3 million, SEK 19.2 million versus SEK 22.4 million. It's lower development costs, slower travel, lower management costs, legal and IR costs. In 2025, we have a bonus in Q1, we don't hand out to this year and we are also 2 people less during this first quarter. EBITDA is SEK 1.2 million versus SEK 3.1 million. The EBIT was minus SEK 0.1 million versus SEK 1.6 million. And looking at the cash flow this quarter, we had a positive cash flow of SEK 3.7 million versus a negative SEK 4.1 million last year. And the net cash is SEK 43.5 million versus SEK 61.9 million. If we look a little bit more in detail on the sales than we can see overall that Asia was more or less flat. The biggest drop was in global and in Americas for the total. Polygiene then, as we said, was down 42%. So now it's below 50% versus last quarter. Last year, it was above 50% of the total. The reason for the drop in Polygiene is mainly the global distribution is down SEK 4 million and Americas and EMEA. APAC is more or less flat, if you would take out the FX impact. Looking on Addmaster, excluding FX, it's more or less flat versus last year and now it's almost 60% of the total in this quarter versus 46% last year. EMEA and APAC excluding FX is more or less flat while we see the drop in this segment in Americas.

Thank you, Niklas. I will now take you through a short business update for the first quarter of 2026, and you have seen from the numbers it has been a demanding and challenging business environment. That said, I'm pleased with how the team and the business has performed overall. Our focus has been on disciplined execution, which I see as a necessary foundation for the rest of the year. And if you remember, at our Q4 presentation, I outlined 4 key priorities for 2026. First, to manage the impact of rising silver price; second, to drive diversification through innovation and expanding into new segments; third, to restore profitable growth in the Americas; and finally, to reposition Addmaster as a leading technical solution provider. I will now walk you through how we are progressing against each of these priorities. So let me start with silver. During the quarter -- the first quarter, we saw a sharp increase in the silver prices peaking at over EUR 3,270 per kilo at the end of January. The prices have somehow stabilized, but at a relatively high level around [ EUR 2,100 ] per kilo, which is almost twice the level it was during the first half of 2025. However, we have reacted quickly and in a structured way. We implemented price increases across both segments. For Addmaster, the new prices came into effect on the first of March. And for freshness, they will come into effect on the first of June. What's important is that we had sufficient inventory at the previous cost level, and this has allowed us to manage to transition smoothly without disruption to our customers. At the same time, as Niklas mentioned, we have maintained strong cost discipline. So as a result, we have effectively protected our margin despite low volume. Also, we saw some customer bringing orders forward, particularly in Addmaster into Q1 and Q2. So overall, this reflects both the continued demand for our solutions and the strength of our pricing discipline. So having secured our margin, let's now turn to growth. Innovation remains the central driver of our growth strategy. And in Q1, we launched OdorCrunch2.0. This is the next-generation odor-control technology. Its key value proposition is that it's non-biocidal and it contains no heavy metals. This positions us well as regulatory requirements and sustainability expectations continue to increase in the textile industry. And importantly, it supports our strategy to diversify beyond silver-based technology. The market response was very encouraging. As Performance Day in Munich in March, OdorCrunch2.0 was selected as one of the top 10 innovation at more than 90 applicants and more recently, we also saw very strong engagement from both brands and [indiscernible] at Functional Fabric Fair in Portland early in April. And overall, we had really good broad international media coverage of this launch of OdorCrunch2.0. So this strengthens our freshness platform, and it expands our addressable market. However, as with any new technology, it will typically take between 12 and 18 months before we see the full integration into our customer collection. So while the commercial impact from OdorCrunch2.0 will come over time, what we are starting to see is the first commercial orders for StayCool which was launched last year. And as you can see here on the left-hand side picture of this slide, this is an example of a new collection from U.S. brands 3Bird, which now uses both Polygiene StayFresh and StayCool technologies. And more broadly, we continue to build commercial momentum with our existing technology and leading global brand partners. So during Q1, we initiated our first collection with Salomon. We expanded our partnership with HEAD, and we saw new launches, not just with Freeberg but also with French brands, Le Coq Sportif. These developments are important. They demonstrate the continued demand for our solutions and the strength of our relationship with undying global brand partners. So let's now turn to the Americas. The Americas remain a key focus area for the group. And the reason is clear. Sales in the region have declined over recent year. And in 2025, it was not profitable, which is why restoring profitable growth is a key priority for us. And in Q1, we took several concrete steps to support this. We reviewed our agents agreements and brought selected partners back as direct accounts. We also launched a dedicated Addmaster U.S. website, reflecting the strong level of interest we are seeing in the region and allowing us to better serve and convert U.S.-based customers. As you can see on this slide, from lead forensic analytics over the past 12 months, we had more than 25% of the traffic to Addmaster U.K. website that was coming from the U.S. So this is an important step to support those customers. In addition, we started to also increase our focus on pipeline conversion, but there is still more to do in this area. And Q1 was a relatively soft quarter in the region, but the actions are now in place, and we continue to manage costs very carefully and strengthen our commercial execution in the region. So the Americas will remain a key focus for the second quarter of 2026 and across both textile and solid service segment. So finally, let me give you some updates on Addmaster. We are making good progress in repositioning Addmaster. Our direction is now clear. We are moving from nice-to-have application towards must-have solutions going back to the pre-pandemic business drivers and focus. This means focusing on areas where our technologies address critical technical and commercial challenges. And to support this shift, we are increasing our direct engagement with customers, strengthening our technical dialogue to better understand their needs so we can deliver tailored solutions. We're also sharpening our commercial focus on high-value opportunity, and we are increasing focus on cross-selling synergies between Addmaster and Polygiene. And this repositioning is underpinned by very strong long-term structural trends. We see growing demand linked to sustainability, resource efficiency and circularity and our technology enable those trends. We're also seeing increasing regulatory requirements and public health concern, particularly around antimicrobial resistance, and we're working towards publishing a white paper explaining how anti-microbial additives can help in the antimicrobial resistance side. Put together, these trends are driving a clear and growing needs for our solution, and this will allow us to build a high-quality and more resilient revenue over time. So to conclude, we have delivered clear progress against our strategic priorities. We have protected margins through disciplined pricing. We are expanding our growth platform through innovation. America remains a key focus with action underway to restore profitability and Addmaster is strengthening our future growth profile. Overall, we remain well positioned to navigate the complex environment and deliver sustainable growth. But we do recognize that there is still a lot of work to be done, and we continue our journey towards the mountain summit. Thank you for your attention, and we will take some questions now.

We got the question here prior to the meeting about what is the most important action during this year to -- that would have an impact on the share price. And I think we talked about some -- or you talked about some of the actions. But if you would -- if you would pick one that would have digital for the share price.

The biggest impact will be growth, will be sales, increasing sale is what is going to have the biggest impact on our result. Some of it is in our control. So some of the action about retargeting, focusing the right application, the right customers where we will grow with them. That is under our control. But unfortunately, there are also some that is outside our control. How well the brand sell their government into the consumer is slightly outside our control. It is also driven by the general geopolitical situation and over-cautiousness of consumer demand right now in general in the textile industry.

We don't have any more questions.

It would appear we don't have any more questions. So thank you very much, everybody, for your time, and we look forward to speaking with you again in July.