Turbulent world, stable production

NET TURNOVER dropped by 5 percent to 652 (688) MSEK. Higher selling prices for NBSK pulp were offset by lower sales volumes.

NET PRICE for NBSK in SEK was 6 percent higher compared with the first quarter of 2024. The price of CTMP fell by 9 percent for the same period. Compared with the fourth quarter of 2024 the price of NBSK rose by 2 percent, while the price of CTMP fell by 1 percent.

PRODUCED VOLUME amounted to 85,800 (84,300) tonnes, an increase of 2 percent. Production of sulphate pulp was at a high level and was 16 percent higher than the first quarter of 2024, which was marked by production disruptions.

SOLD VOLUME totalled 82,600 (89,800) tonnes. Demand at the beginning of the quarter was weak.

EBIT (operating profit) was -62 (5) MSEK. Exchange rate losses negatively affected the result. Wood costs continued to rise. Also fixed costs and depreciation were higher than in the same quarter of 2024.

NET INCOME for the quarter totalled -56 (-2) MSEK. Earnings per share were -0.37 (-0.02) SEK.

BALANCE SHEET: The equity/assets ratio was 56 (65) percent and available liquidity amounted to 208 (385) MSEK. Net debt totalled 558 (-12) MSEK.

CASH FLOW from operating activities after investments amounted to -165 MSEK. At the same time, financing activities contributed 184 MSEK.

THE ANNUAL GENERAL MEETING was held on 10 April 2025 and resolved in accordance with the Board's proposal that no dividend be paid for 2024

Comments by the CEO
Focus on cost adjustments and a stable balance sheet

The first quarter was marked by weak results due to continued rising prices for pulp wood, the challenging market trend for CTMP pulp and the weaker USD. We are now working intensively on cost adjustments and further efficiency measures. Meanwhile, the chemical softwood pulp market is stable and many of our niche customers still wish to increase their volumes.

We are now rapidly implementing cost adjustments and efficiency measures on all fronts in response to worsening external conditions. We are therefore doing what is necessary, even if it is painful. At the end of March, 47 employees were given notice, mainly at Rottneros Mill where we produce mechanical CTMP pulp. Overall, we expect to reduce the Group's cost base by 35-40 MSEK on an annual basis, with full effect during the
second half of 2025.

Profitability is primarily being squeezed in CTMP pulp due to the tough market situation. At present, several external factors are forcing us to scale back our production and limit deliveries to fewer markets. Prices are currently below our variable costs, particularly in the Asian market.

At the same time, we have made significant investments in Rottneros Mill over the past two years that demonstrate our long-term confidence in the future of CTMP pulp. As recently as early April an inauguration was held for a solar park which will enhance the mill's self-sufficiency in eco-friendly electricity.

We continue to deliver at a high level with respect to the factors we can influence ourselves. Production at Vallvik increased by 16 percent compared with the same quarter last year. Although last year's production disruptions had an impact on the comparison, the outcome was strong. Volume in Rottneros Mill was affected by the production adjustments we had to make in response to the current weak market conditions. As a result, it decreased by just over 20 percent, while we see that the capacity investment is delivering on set targets.

Chemical pulp market remains stable

The chemical pulp market remains stable within our niches. The net price of NBSK rose by 7 percent denominated in USD between December and March. However, the increase was only 1 percent when converted to SEK, due to a weaker USD.

At the same time, the CTMP market remains under pressure, primarily due to weak performance in China. The net price for CTMP remained unchanged in USD between December and March, but decreased by 7 percent when converted to SEK.

Ongoing decline in pulp wood prices - but clear bright spots ahead

Wood prices continue to have a negative impact on our earnings. Our own supply of wood and wood chips remains strong, largely due to our long-term efforts to foster close relationships with our suppliers. We also see clear indications that the overall market balance is starting to shift in our favour as buyers. Supply has increased, while demand has weakened slightly. As a result, we have been able to lower our purchase prices from the second quarter onwards.

Our systematic safety work is yielding results

Employee safety remains our highest priority and is consistently at the top of our agenda. It is therefore highly rewarding to see that our systematic efforts are yielding results. No incidents resulting in sick leave occurred during the first quarter. The rolling 12-month result thus improved further from an already low level.

Production started at the Packaging project in Poland

During the quarter production began at our large-scale molded fiber tray manufacturing project in Poland, undertaken in partnership with Arctic Paper. This will enable us to verify our premium product quality within the framework of a scalable and competitive production process operating at full industrial scale. Interest in our fossil-free and climate-friendly packaging solutions remains strong.

We safeguard a strong balance sheet
The Group's financial position should be characterized by a strong equity ratio that provides good resilience in difficult times. Therefore, a constructive and positive dialogue is currently underway with our lenders regarding measures to ensure a long-term sustainable financing solution and leverage.

The equity/assets ratio at the end of the quarter was a reassuring 56 percent and available liquidity totalled 208 MSEK.

In closing, I would like to express my gratitude to all my colleagues for their excellent work and strong dedication to Rottneros in these challenging times. I would also like to thank our customers, suppliers, owners and the Board of Directors for their valuable and rewarding cooperation.

Lennart Eberleh

President and CEO

(For full report, see attached pdf)

This information is such information that Rottneros AB is required to disclose in accordance with the EU Market Abuse Regulation and the Securities Market Act. The information was submitted for publication on 15 May 2025 at 07.30 by the contact person below. This report has been prepared in both a Swedish and an English version. In the event of deviations between the two, the Swedish version shall prevail.

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Reminder:

Invitation to Rottneros' presentation of interim report Q1 2025

All participants can follow the live webcast presentation at 12:00 on 15 May 2025 via the link:

Rottneros - Q1 Presentation 2025 - Finwire

Questions can be asked via the link in advance or during the presentation.
You can also watch the presentation afterwards via Rottneros'  Youtube channel and website.

The presentation will be held in English. Questions can be asked in English or Swedish.

For further information please contact:
Lennart Eberleh, President and CEO, Rottneros AB,
+46 (0)270 622 65, lennart.eberleh@rottneros.com

Monica Pasanen, CFO, Rottneros AB,
+46 (0)270 622 70, monica.pasanen@rottneros.com