<a id="bm-comp-d8cca726-a1d3-4049-8a21-006f0afd559f" name="bm-comp-d8cca726-a1d3-4049-8a21-006f0afd559f" class="BMCustomAnchor"></a><table><tr><td bm-component-id="d8cca726-a1d3-4049-8a21-006f0afd559f" style="vertical-align: top; width:100.000000%;"><ul><li>CEO highlighted importance of product innovation</li><li>New Bangladesh factory remains core part of strategy</li><li>Reiterates target of &gt;10% EBIT margin</li></ul></td></tr></table><a id="bm-comp-d9dd7e3f-5eba-4e4b-8e61-6c7b9d247c3a" name="bm-comp-d9dd7e3f-5eba-4e4b-8e61-6c7b9d247c3a" class="BMCustomAnchor"></a><table><tr><td bm-component-id="d9dd7e3f-5eba-4e4b-8e61-6c7b9d247c3a" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Nil&#246;rn 3.0: an innovative and efficient player</h3><p>We hosted Nil&#246;rn's CEO Krister Magnusson at ABGSC's Investor Days. Mr. Magnusson spoke about Nil&#246;rn's journey from a label manufacturing company to an innovative player focused on sustainability, digital transformation and global expansion. He also spoke about &#8220;Nil&#246;rn 3.0&#8221;, which is part of the company's strategy. The strategy involves focusing on products, production/supply, specialists, marketing and markets for small and medium-sized clients. This has ensured exceptional customer loyalty over time, as the lock-in effects for clients are higher the more Nil&#246;rn sells to clients.</p><h3 class="bm-h3">To triple capacity in Bangladesh factory</h3><p>Another important part of Nil&#246;rn's strategy is production and supply. As previously announced, Nil&#246;rn is investing in its production in Bangladesh, where it has the highest profitability. Nil&#246;rn used to focus on production, but later shifted its business model to supply and is now starting to focus on production in selected regions, such as Bangladesh. The new factory in Bangladesh will triple the capacity in Bangladesh. Many retailers have production facilities in Bangladesh and by increasing its supply there, Nil&#246;rn will be closer to both existing and new customers.</p><h3 class="bm-h3">Margin expansion to be expected</h3><p>The presentation later focused on Nil&#246;rn's gross margin development (45% in Q1'25 vs. 43% in Q1'24) and he commented that while the increased focus on packaging has a negative impact on margins as packaging has higher production costs than e.g. labels, increased internal production and successful sourcing efforts have offset the negative product mix. Nil&#246;rn reaffirms its targets of &gt;7% growth and &gt;10% EBIT margin. Following Mr. Magnusson's presentation, we got the impression that the company's recent gross margin beats are due to sustained changes in the company's sourcing organisation. This increases the likelihood of margin expansion once Nil&#246;rn gets to scale on the new production-related costs.</p></td></tr></table>