Rights issue oversubscribed, sequentially higher EBITDA

NET TURNOVER increased by 2 percent to 726 (711) MSEK. The increase was thanks to higher sales volumes while prices were lower.

THE NET PRICE of NBSK in SEK was 18 percent lower compared with the second quarter of 2024, while the price of CTMP was 23 percent lower. Compared with the first quarter of 2025, prices in SEK were around 10 percent lower.

VOLUME PRODUCED amounted to 90,300 (91,100) tonnes. Production of sulphate pulp was 7 percent higher than during the second quarter of 2024, while CTMP production was held back by weak market conditions.

SOLD VOLUME totalled 91,100 (88,600) tonnes. Demand for sulphate pulp has been robust, with sales up 17 percent. At the same time, CTMP sales fell by 20 percent.

EBITDA was -15 (65) MSEK, higher deliveries were offset by lower sales prices and higher raw material costs.

NET INCOME for the quarter amounted to -158 (22) MSEK, affected by impairment of non-current assets of 140 MSEK.

BALANCE SHEET: The equity/assets ratio was 53 (64) percent and available liquidity amounted to 200 (298) MSEK. Net debt totalled 549 (112) MSEK. The rights issue does not affect the key performance indicators as of 30 June 2025.

CASH FLOW from operating activities for the first half of the year amounted to -88 (66) MSEK. Investments amounted to 67 (206) MSEK.

UPDATED LOAN AGREEMENT which includes a liquidity covenant and a profitability target temporarily replacing the debt covenant.

EXTRAORDINARY GENERAL MEETING AND RIGHTS ISSUE: An extraordinary general meeting was held on 12 June 2025 to approve a rights issue of approximately 300 MSEK. On 8 July 2025, Rottneros announced that the issue was oversubscribed.

Comments by the CEO:
Successful Rights Issue and cost focus strengthen our financial resilience

The second quarter was marked by a continued weak earnings performance. The combination of higher prices for pulp wood, the negative market development for CTMP, and a weaker dollar weighed heavily. The demand for chemical softwood pulp in our niches remains stable. We consistently deliver at a high level with respect to the factors we can influence ourselves. However, the weak market development within CTMP has resulted in an impairment of non-current assets by 140 MSEK. The Rights Issue successfully carried out in July strengthens the balance sheet and thereby our financial resilience.

We are implementing cost adjustments and efficiency improvements to mitigate the negative and challenging external environment. As previously, we expect to reduce the Group's cost base by 35-40 MSEK on an annual basis, with full effect during the autumn.

Successful rights issue

Rottneros finances should be characterised by a robust equity/assets ratio and liquidity that provides good resilience in difficult times. To ensure a long-term strong and sustainable financing solution and level of indebtedness, the Board of Directors decided in May to carry out a rights issue of approximately 300 MSEK. ­
It was approved at an extraordinary general meeting in June and successfully completed in July. The equity/assets ratio after the issue is estimated to be 64 percent, which is above the long-term target of at least 50 percent. Our available liquidity increases by just over 200 MSEK to 342 MSEK after amortisation of long-term loans and transaction costs. I would like to express my sincere thanks to our owners for their support and trust.

We continue to maintain a sharp focus on the factors we can influence ourselves and consistently deliver at a good level with respect to them. Production at Vallvik increased by 7 percent compared with the same quarter last year. At Rottneros Mill, the volume continues to be affected by the production adjustments that are necessary in the weak market conditions prevailing in mechanical pulp. As a result, production decreased by 14 percent at Rottneros Mill. The capacity investment is delivering on the established targets, and the mill performs exceptionally well when permitted to operate at full capacity.

Fewer redundancies than anticipated

At the end of May, it was confirmed that the workforce would be reduced by 26 individuals, which represented significantly fewer redundancies compared with the number that was initially announced. The majority concerns Rottneros Mill, as the weak market for CTMP in Asia weighs on both volume and profitability. To address this situation, we are prioritising deliveries to the more profitable markets. The strategic investments we have made in Rottneros Mill over the past two years also demonstrate our long-term confidence in the future of CTMP. However, the prevailing weak market conditions, and thus a continued lower production level, have resulted in an impairment of non-current assets by 140 MSEK.

Demand remains stable within our niches in chemical pulp

After a modest increase at the beginning of the year, the market for chemical pulp deteriorated during the quarter, primarily weighed down by rising producer inventories. Meanwhile, demand within our niches remains steady, and many customers are still increasing their volumes. The net price of NBSK increased by 1 percent in USD between the first and second quarters. However, when converted to SEK, the price decreased by 9 percent due to the weaker dollar. The net price of CTMP decreased by 2 percent in USD compared with the previous quarter, and when converted to SEK, it fell by 12 percent.

Improved market balance for pulp wood

Although wood prices remain at a very high level and are thus one of the main reasons for our weak earnings performance, we see clear signs that the market balance is starting to shift in our favour. Supply has increased, while demand has weakened slightly. An increasing number of suppliers are announcing price reductions, and we have been able to lower our purchase prices.

Safety efforts continue to yield results

The safety of our employees is always our top priority. Therefore, it is extremely encouraging that our systematic efforts are yielding results. During the first half of the year, we had no incidents resulting in sick leave. As a result, the rolling 12-month outcome improved further from an already low level.

Packaging project in Poland ready for large-scale production

Our project for large-scale production of molded fiber trays in Poland, in collaboration with Arctic Paper, has commenced production as planned. After the summer, we will begin production at full commercial scale.

In closing, I would like to thank all employees for your strong commitment to Rottneros during these challenging times. I would also like to express my gratitude to our owners, the Board of Directors, our customers, and suppliers for their outstanding collaboration.

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 12 August 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 Q2 2025

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

Rottneros - Q2 Presentation 2025 - Finwire

Questions can be asked via the link in advance or during the presentation.
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