Good morning, everyone, and welcome to the presentation of ASSA ABLOY's Q2 report in 2026. My name is Björn Tibell.

I am Head of Investor Relations, and joining me here in the studio are ASSA ABLOY CEO Nico Delvaux and our CFO, Erik Pieder. We have set aside about one hour for this call, and we will now start with a summary of the results before we open up for your questions.

With that, I would like to hand over to you, Nico.

Thanks, Björn, and also good morning from my side. Q2 result for us, we can report strong numbers for Q2, where we have seen an accelerated organic sales growth, an organic growth of 4%, with strong sales growth in EMEA, good sales growth in Americas, Global Technologies and Entrance Systems, and a decline in APAC related to market conditions in Greater China.

Also good complementary growth through acquisitions of net +2%. And then a very strong operational execution with a record high EBIT and a record high EBIT margin of 17%, with an excellent operating leverage of 51%.

Also, good balance sheet management with a very strong cash flow improvement, cash flow 16% up, and a cash conversion of 106% in the quarter. And then we continue our transition from mechanical to electromechanical.

Our Electromechanical products had an organic sales growth of 8% in the regional divisions. Then we completed five acquisitions in the quarter.

If you look into the numbers, sales of almost SEK 39.5 billion, 3% up. As I mentioned, 4% organic growth, 2% net growth through acquisitions, and then a -3% negative currency effect.

A very strong record EBITDA margin of 18.1%, 90 basis points up. The EBIT margin of 17%, we had some one-time items in the quarter.

Erik will come back on the details. If you correct for that, the EBIT margin was 16.5%, so still a record for Q2.

And then the EBIT at SEK 6.7 billion, 9% up. And EPS at SEK 3.98, 12% up, also a record.

If you look a little bit into the different regions, starting with North America, a +4% for us, where market conditions have remained very similar to previous quarters, where everyone is not residential, if you talk about Opening Solutions. Americas has been strong market conditions.

And then in residential, we see continued more challenging conditions, especially on new build side, where the new build market continues to show a negative trend, where the R&R side is perhaps flat, perhaps slightly up. Also, the logistic vertical is important in North America for Entrance Systems.

There we have seen also a more flat development of the market. If you go to LATAM, good market conditions, I would say, despite some challenging political situations in some of the markets.

A +2% for us, where we have seen for the Opening Solutions Americas division, a positive growth in all the different countries in LATAM. Again, then go to Europe, a strong +4% for us, where we have seen very similar market conditions as in previous quarters and very similar, I would say, to North America.

Everything that is non-residential, very strong. Residential also in Europe still more challenging.

Perhaps a little bit better than in North America, but definitely on the new build side, also still no improvement, but perhaps a little bit better on the R&R side. In Europe, the logistics vertical, very important for Entrance Systems, where we have continued to see a negative market development.

Africa, -12%. You see Africa is a very small part of our business.

It's all project-related, and it's timing around those projects for HID, so nothing significant. If you go down to Oceania, a strong +5%, where we have seen very strong development in our core markets as well in Australia as in New Zealand.

In Asia, -2%. I think we should make a distinction between Greater China and South Korea on one side and all the rest.

All the rest has shown very good result with good market conditions and also strong positive development for us. Whereas on the negative side, South Korea has been more challenging.

To give you an idea, on the residential side, housing completion in mainland South Korea was down 50% compared to a year ago. Very tough market conditions.

Greater China continues to be also very challenging with the market double-digit down, and also our results strongly double-digit down. Some highlights from around the world.

Very excited about our new product launch of padlocks for the North America market under the Weiser brand for Canada and the Kwikset brand for the U.S. Very nice, comprehensive, full new range of padlocks.

A new partnership for Yale, that partnership with Lodgify to integrate smart locks across Europe with this leading vacation rental platform. As a soccer fan, also a very nice application.

We provided access solutions for several stadiums for the World Cup in the U.S. and in Canada.

If you look at the numbers, you see an acceleration of our organic growth, like I said, complemented with good growth through acquisitions. Our sales, 49% up if you compare with 2021.

Our operating margin now on a 12 month moving trend, in the middle of the band which we aim for, and moving further up in that bandwidth. At 16.5% 12 month moving trend, EBITDA at 17.6% on a very high level.

Better top line and better margin, therefore, also acceleration of our operating income to a record level, and 76% up compared to 2021. The acquisitions, we remain very active on the acquisition side.

We have five acquisitions completed in the quarter, eight acquisitions year-to-date. They represent an annualized sales of around SEK 2.5 billion.

We also completed our 400th acquisition in Q2. That was the acquisition of Rollerdoor, a sectional door manufacturer in Portugal, strengthening our position in South Europe for sectional doors.

They had sales of around SEK 640 million last year. Another highlight of an acquisition, Sentinel Dock & Door.

Very excited about this acquisition. It's a commercial dock and door service company based in Canada, strengthening our direct channel presence, including our service business in Canada.

They had sales of close to SEK 1 billion last year. If we zoom in into the different divisions, starting with EMEIA, we see a very strong performance of EMEIA with an organic growth of +5%, with very strong sales growth in Central Europe and in the Middle East, India, and Africa, a strong sales growth in the Nordics, small growth in South Europe, and a stable development in U.K.

and Ireland. Excellent operating leverage, 270 basis points, giving us an EBIT margin of 16.5%.

You can see the effect of FX and M&A. Overall, we continue to see the positive trend in EMEIA.

It's now three, four quarters in a row that we see an acceleration of that organic growth, and therefore, also very strong margin improvement. Also, Americas continues their successful journey.

They had an organic sales growth of 4%, with strong sales growth in North America non-residential segment and in Latin America, a small sales growth in the North America residential segment, I would say despite very tough market conditions. A good EBIT margin at 18.7%, with an excellent operating leverage.

Here also you can see the FX and M&A effects. We go to Opening Solutions APAC, an organic sales decline of 4%, with good sales growth in the Pacific and Northeast Asia subdivision and a significant sales decline in the Greater China, Southeast Asia subdivision.

Like I mentioned earlier, that's because of Greater China, where we have seen higher double-digit negative growth. Where on the other hand, in Southeast Asia, we have seen very good double-digit positive growth.

An EBIT margin of 9.2% with a stable operating leverage despite the negative organic sales growth, so good cost management. Also here we have the effects of FX and M&A.

If we go to the Global Technologies division, starting with Global Technologies and organic sales growth of +4%, with strong sales growth in Global Solutions and a good sales growth in HID, a strong EBIT margin of 19.7% with excellent operating leverage. Here, more important dilution of FX 60 basis points.

That's the dollar SEK related, the 20 basis points on M&A. Last but not least, Entrance Systems with, I would say, very good organic sales growth of 4%, despite also tough market conditions here on the logistics vertical.

We had a strong sales growth in Perimeter Security and in pedestrian, a good sales growth in industrial, a small sales growth in doors and automation, also good sales growth in service. Also good EBIT margin of 16.7% also in this division, excellent operating leverage, 60 basis points up.

Dilution from FX and M&A both 20 basis points. With that, I think I give the word to Erik, our CFO, for some more details on the financial numbers.

Thank you, Nico, and a very good morning from my side as well. As mentioned before, the sales in the quarter were up with 3%, of which organic was 4%.

The net from acquisitions was 2%, and then we have a negative currency effect of 3%, but it is much smaller, as you remember from the Q1, where it was -10%. Now, if we look into Q3, we estimate today that it is going to be flat.

However, it is going to be a slight negative dilutive impact on the margin. EBIT at almost SEK 6.7 billion, it is up with 9%.

EBIT is at 17%, 80 basis points up. However, already Nico mentioned that we have a few one-time items.

If you would exclude from this, it would be 16.5%. Let's say an order of magnitude, the three ones that we have, one is earnout reversals, two is the divestment gain within Global Tech, and then we have a little bit of tariff refunds as well.

Income from before tax, net income, and EPS are all up with 12%. As mentioned before, we had a very strong cash flow at SEK 6.3 billion.

It is up 6% versus the same period last year. Return on capital employed improved with 40 basis points, and operational value added increased with 5% and is now for the first time above SEK 11 billion.

If we go to the bridge, if you look on the organic part, if you look on the sales there, roughly 2% of the 4% is price, and consequently about 2% is volume. The organic flow-through is strong at 51%.

However, as mentioned before, the one-time items, if we would exclude the one-time items from the organic column, it would land at 38%. Currency, due to the weaker, let's say U.S.

dollars, it was -3% on the top line, and it has a 30 basis points negative impact on bottom line. Acquisitions there, it was 2% on top line.

On the bottom line there, of course, we have the divestment gain. The divestment gain was roughly SEK 50 million.

If you exclude from that and look on the rest on the acquisition, you can see that obviously the margin is a bit lower, and that is affected then by the integration cost that we have had for the recent acquisitions. Go to the cost breakdown on direct material.

It is 30 basis points better than what it was last year. We have a slight positive mix, that is offset by that we had a reclassification of a cost item, which sort of impacted negatively.

If you take, let's say, the true direct material price versus cost, that impact is 40 basis points for the quarter. Conversion cost remains flat versus last year, so the inflationary pressures has been taken off by efficiency improvements.

As an example, we have MFP savings in the quarter of about SEK 130 million. SG&A is 70 basis points better than the same period last year, and there you can see that our good cost control has managed to make that a positive number.

Operating cash flow, as mentioned before, very strong in the quarter. Cash conversion is at 106%.

This comes from that we have strong earnings as well as we have been able to continue to do very good work when it comes to working capital management. If you go to the gearing, net debt to equity at 61%, net debt to EBITA is at 2.2%.

If you remember Q1, it was 2.1%. During the quarter, despite that we have had a very strong operating cash flow, we have, of course, paid half of the dividend as well as we have been busy on the acquisition front.

If you compare our net debt a year ago versus today, we are down with about SEK 2.5 billion. We can continue to see that our good cash generation also makes it feasible for us to continue our acquisition strategy going forward.

Last but not least, I already mentioned the number before, earnings per share was up with 12%. With that, I hand it back to Nico for some concluding remarks.

Thanks, Erik. A good Q2 for ASSA ABLOY.

With accelerated sales, I would say, despite challenging market conditions. A good organic sales development of +4%, complemented with growth acquisitions of net 2%.

Very strong operational execution with a strong record EBIT and a strong record EBIT margin with excellent operating leverage of 51%. Good working capital management with very strong cash flow improvement, 16% up, and a cash conversion of 106%.

Okay, it's clear that we continue to operate in uncertain and swiftly changing operating environments. We have proven in the past that our decentralized and empowered organization is ready to address those changing market conditions, and that will also be the case going forward.

Whatever market conditions come to us, we are confident that we will be able to continue to deliver good results. With that, I give back the word to Björn for Q&A.

Thank you, Nico. Yes, it means it's time to open up for your questions.

Could I please remind you to limit yourself to one question each and one follow-up, as there are some people in the queue to ask questions, then hopefully, most of you will get the opportunity. Operator, this means we're ready to kick off the Q&A.

Please go ahead.

Hi there, it's Ines Lefranc speaking to Daniela Costa. I just wanted to ask a quick question on whether you could give us some color on the Q3 start so far, and also on any commentary on pricing in 2H that you expect.

Thank you very much.

I didn't get the first.

Q3 start.

Q3. Okay.

Yes.

Exit entry.

Yeah, as we mentioned, Q2 started on a similar level as Q1 for the first couple of weeks. We have seen a drop towards the end of April, and also May was weaker.

We had a very strong June. Okay, June had one and a half working days more, even if we correct for the working days, June was much stronger than the first two months.

Now July, it's a little bit difficult to say where July is because July and August are holiday months and Q3 is normally made in September, not in July and August. You could say that July started on a similar level as June.

Pricing.

Pricing. At the beginning, we said that we should calculate 1.5% or so for the year.

We had then revised that upwards in a previous call to something around 2%, perhaps slightly north of 2%. I think that is still a good number for the full year.

You have seen what we announced as price increases for Q1 and Q2. If it's a strong 2% for the full year, that means that also in the second half, you should expect something around that 2%.

Thank you very much.

Thank you very much, everyone. Good morning.

Hope you can hear me well. My main question is around Entrance zooming in on the Industrial business.

That was slower in the 1st quarter. You've now said that's shown good organic growth.

I was wondering if you might be able to give us more color on how you saw that developing through the quarter by region and so on. Thank you.

Yeah. The Industrial segment is a segment that is most exposed to the logistic vertical.

Like I mentioned, logistic vertical, I think market conditions are still not good. In North America, market conditions I think are flattish, you could say.

Whereas, if you look in Europe and you look at the bigger projects, I think the market is still down. We are not really helped by stronger market conditions.

It was more that we had still some projects in the pipeline that we then invoiced in the quarter. We also had a better service performance in the quarter.

Also the smaller projects and the non-directly big warehouse vertical related projects were better in the quarter. That explains the growth for the Industrial segment.

Thank you. My follow-up is, unless I missed it, I don't believe you commented on how your specification activity developed through the quarter.

I was wondering if you could give us some color around that. Thank you.

Yeah. The specification value was up high single digits on group level.

I would say similar in the different geographical divisions. If you take year-to-date in all three geographical divisions, spec activity is up either high single digit or low double digit for the respective divisions.

That's clear. Thank you very much.

Yes, good morning. Thank you very much for taking my question.

Can I just start with a follow-up on pricing? You implied around +2% for the second half.

Did you implement price increases during Q2?

Yes. Yes, we did.

As one, basic materials at least at the beginning of Q2 continued to go up. We have, of course, still all the tariffs.

We have also important logistic inflation. We did that.

What you should not forget is, of course, is that you should compare with last year. In Q2, we started to see some compensation for the tariffs, and that came in full effect into Q3 last year.

Q3 from that aspect is, you could say the biggest or the most challenging comparison with last year.

Right. That enhance the +2%.

Great. Can I just ask on the Americas or U.S.

residential markets what are the trends you're seeing there? Especially, you mentioned, I think before that there were some signs of life emerging in the R&R where people started to take a view that they won't move anytime soon with the current rates, and hence starting to maybe go ahead with a bit more renovation activity on existing homes.

Is that something that is picking up as a trend, or was that just a blip?

Yeah, we had a small, low single-digit positive growth of our residential business in North America in Q2. I think if you first look at new build for single houses, we don't see an improvement.

As a matter of fact, we see the market further down, we don't expect the market to come back this year. Hopefully, that will be something for next year.

You see some more activity on the multifamily side, the multifamily is obviously a much smaller part of the business than single houses. On the R&R side, if you can believe economists that forecast the future, they believe that R&R could grow a couple of percent in the second half of the year.

If that's true, that would, of course, be good news for us because we are more exposed to R&R than we are to new build. It's clear that interest rates stay very high.

They are at that 6.5% level, we will not be helped by interest rates. It has more to come from people that start to do refurbishments on their house, because at a certain moment, if your house ages, it's time to refurbish.

Perhaps people start to think, "Hey, let's refurbish the house. If I don't have to sell it in a year or in two years, I will have a better resale value for my house."

We don't really see a significant improvement of the market. That's perhaps a little bit different in Europe, where we believe the R&R side is a little bit in better shape than in the U.S.

Very helpful. Thank you very much, Nico.

Hello. Hi, good morning.

Thanks for taking my question. The first one is on organic growth.

It was nice to see volumes coming back, 2% up in the quarter. Perhaps can you talk a little bit in terms of confidence?

What confidence do you have for volumes to continue to grow, perhaps in the second half? Thank you.

We should perhaps comment on the different divisions. If you take the geographical divisions, like I mentioned earlier, we see still very good momentum on the non-residential side, commercial side, where we have had higher single-digit growth in our different divisions, and we are confident that that continues.

We have our spec indicator. There is also some external indicators that we believe that should continue.

Then, like I said, on the residential side, although market conditions remain challenging in the U.S. and remain, to a certain extent, also challenging in Europe, the comparison, of course, becomes easier.

At least on the R&R side in Europe, we are a bit more optimistic. I think also we should see further acceleration of the organic growth on the Global Tech side, where in Q2, we still have seen, like in Q1, that non-critical CapEx-related industrial investments are a little bit being delayed.

People have this wait and see attitude. Of course, you build up a pipeline, and at a certain moment, that pipeline starts to roll, and we are confident that that will happen in the second half of the year.

We also had a bit lower hospitality business in Q2, which is just a timing issue. There also we should see an acceleration now in the second half of the year.

Growth will not come from Greater China. That will continue to be challenging in the second half of the year.

I already commented on the challenging market conditions in the warehouse vertical.

Thank you. My follow-up would be on the 50 basis points on EBIT one-off.

Could you split out the impact from tariffs refund?

Like Erik mentioned, we had three items, and the biggest item was an earn-out—

Reversal.

Reversal, sorry. The second-biggest item was a capital gain on a small divestment we did in Global Tech.

The tariffs was the smallest one of the three. It was in the single-digit million dollar range.

Thank you very much.

Yep. Good morning, gentlemen.

Thanks very much. I wonder if you could talk a little bit about the EMEIA margins.

16.5% is a great number to see after such a long time. You're obviously showing real benefits from MFP.

Operating margins were, what, close to 70%. Again, really encouraging to see.

I wondered if you could just talk a little bit about structurally where we are here. Is this something now we can think about as sustainable, and then as the market recovers, actually recovers, maybe at some point, then those margins can move higher still?

As a follow-up, I wondered if I could just check where those gains fell divisionally and making sure we're not seeing anything in those margins in EMEIA in particular, that might have been supported by the earn-out or the divestment. Thank you.

Yes, it's correct that it was mainly in Global Tech and in EMEIA that we have had the one-time item effects. If you correct for the one-time items effects in EMEIA, our EBIT margin was—

15% flat.

15% flat. We had a volume leverage on the 5% organic growth of—

38%.

38%. I think underlying still a very strong performance and a very strong improvement compared to the same quarter a year ago.

What we have always said is that EMEIA, over time, should come to that 16% EBIT level. We have said that two things had to happen.

We had to have a stronger SEK, because they had a lot of dilution from the SEK over recent years. Obviously, that problem is solved because the SEK became stronger since nine months or so.

We have said they need some kind of organic volume growth to get that volume leverage efficiency. You've seen now since three quarters or so that EMEIA has accelerated and continues to accelerate that organic volume growth.

That was, again, the case in this quarter. You see that you get very good volume leverage and therefore very good margin accretion.

We are confident that that will continue in the coming quarters and that they will continue confidently their EBIT margin trajectory upwards.

Okay, great. Thank you.

Yes. Hi, good morning, everyone.

The first question I have is, and sorry to belabor the point, but just a clarification on the one-offs once again. You said that it should be around SEK 100 million for the EMEIA division for the reversal of the earn-out provision.

I heard SEK 50 million for the divestment gain within Global Tech, which leaves about SEK 50 million for the tariff refunds, right? You talked about a single-digit number there, I'm just trying to reconcile all these numbers.

That's the first question.

In total, it's around SEK 200 million, the one-offs. We also had some earn-out reversal in Global Tech.

That's what you're missing in your calculation.

Perhaps if I go through. Gael, you are absolutely right when it comes to the SEK 100 million then in EMEIA.

You go from, as I said before, 16.5% in EBIT down to 15%. You go from organic leverage from above 50% down to 38%.

The other one where you will have an impact is in Global Tech, you have two impacts. One is the divestment gain of.

First start with the numbers. If you look on their EBIT is, if you look on without anything, the margin is 17.9%, 18% flat.

You already know the 15% at 50%, sorry, that goes into the divestment gain. You have also earn-out reversals within Global Tech.

There, if you look their operating flow through ends up at 32%. Which means that you have, okay, Nico is always rounding a bit.

If you want to have the true number, it is actually SEK 70 million that you should put in there. If you add this all together, you are about SEK 220 million.

That was those effects. Then, as mentioned before, the tariffs is marginal when it comes to this.

Okay, understood. What are the two businesses related to the earn-out reversals?

The companies, you mean?

Yes.

One—

One was in EMEIA in U.K., and the other one was in Global Solutions.

Netherlands.

In the Netherlands.

Okay. All right.

I'll try to find out. The second question I have is around the underlying margin performance.

Obviously, the underlying execution was very strong again, but with different drivers this time, maybe compared to Q1, it was clearly less about direct materials and rather more about SG&A efficiency. Is it the beginning of a new, let's say, margin trend from here?

And especially, do you still expect the price cost to be positive in coming quarters?

I would say that, like Erik mentioned, we had net 40 basis points price cost gain. I think it's still significant.

It's just 10 basis points less than in Q1. We are confident that we will continue to have a good price cost gain also in Q3.

We will see Q4 and Q1 next year, how material prices evolve and what we do with pricing. We should continue to get help from price versus cost.

We should not forget that the 2% price, of course, has a positive effect on all the lines in the income statement. It's definitely also true that if you take the residential segment in North America as an example, that we have further adjust our cost structure to the lower top line reality, and all these day-to-day cost efficiency measures.

Our lean initiatives in our operations. I think also good negotiation with suppliers.

Like Erik mentioned, our MFP programs that continue to kick in. All that together gives us the good efficiency gains that you've been able to see on the other lines.

Okay, that's great. Thanks very much.

Yes, good morning. Thanks for taking my questions.

You mentioned some pressure in Europe, in Global Tech on project-related businesses. Can you be a bit more specific and provide some color on how you see this segment evolving for the remainder of the year?

So the project-related business segment.

I think you should make a distinction between projects that are really business critical. Customers have to do the project, or they're out of business, or they don't have a solution.

Then you have other projects where they buy our products to get efficiency gains or to get improvements in the way they run their processes. It's that second part of kind of projects that are not really very urgent and very business critical, where we see that perhaps people sometimes hesitate and say, "Let's wait a quarter.

Let's see how things move or how our results are before we take that decision." There we have seen a buildup of projects in the pipeline where we are waiting for people to take this decision.

Ultimately, people will have to take that decision, of course. We are confident, and we have seen that at the end of Q2, that those projects start to move again, and we are confident that will now continue in the second half of the year.

We have seen that also a bit in Entrance Systems. We have seen that mainly in Global Tech.

Thank you. You highlighted 900 potential targets in your pipeline.

What are the main regions and segments you are focusing on?

Yeah, we targeted it's even close to 1,000 because every time when you do an acquisition, that acquisition then comes also with new ideas to buy other companies. I would say it's very widespread, and we don't really have an opinion in which division or in which geography.

If it's a good project, we do it on first come, first served basis, in the sense that for those acquisitions in that 30 million, 40 million, 50 million EUR range, we are not limited by our balance sheet. If we can do five, we do five.

If we can do 10, we do 10. It's more we are talking to many of them, of course, to conclude, you have to agree on both sides, and when that happens, we will do the acquisitions.

There's only one location where we have said that for the time being, we would not do acquisitions, and that is in Greater China, where we want to see a more stabilization of the market and also stabilization of our business before we do any acquisitions.

Thank you, Nico.

Morning everyone. Nico, Erik, thanks for the time.

Could I ask about the speed of EMAG versus MAG, either globally or by region, with or without GT? Also, if possible, where you are on the innovation ratio and your thinking there, thirdly, where recurring demand speed was in the quarter, software versus service as well, if that's possible.

Like we mentioned, our EMAG growth in the geographical divisions has been 8% in the quarter. When I say that we had high single-digit growth on the commercial side, it is of course in the first place, thanks to that shift from mechanical to electromechanical and digital.

We continue to see that trend moving in the geographical divisions and also in Global Tech. As our install base on electromechanical products continues to increase, we also continue to see more recurring revenue opportunities in the first place, again, in the Global Tech division, but also in the geographical divisions.

Our recurring revenue was also up again double digit this quarter, and today it is more than 6% of total revenue. If you look over the last three or five years, the recurring revenue part, that solution has been the fastest-growing, you could say, product or offering in our portfolio.

The third question was?

Recurring revenue.

Innovation ratio.

Innovation ratio.

Innovation and recurring revenue.

Yeah, if you see today products that we developed over the last three years, how much do they contribute to revenue? That is one of the KPIs we follow.

That is around 25%. One out of four dollars we make or euros we make comes from a product that was developed over the last three years.

Quite happy with that. We obviously want to further improve that.

We have invested a lot, as you know, on R&D. I would say not only on the electromechanical side and the whole move to mobile credentials, we have also reinforced our activities on the mechanical side, also on the more value segment on the mechanical side.

If we take Residential North America as a good example, I think if you take the last six or nine months in HHI, we developed or we launched more products than HHI launched over the last three years before we bought them. That is a very good, clear example of acceleration of R&D activities.

I think we wrote also in the comments, since I started back in 2018, we launched more than 4,000 new products or product families, and we also filed for more than 2,000 patents. I think that shows a little bit our R&D strength, and we see R&D really as a way for us to differentiate us in the market.

Thank you very much.

I have been informed that it's just one left in the queue, so if you have any more follow-up questions, follow the instruction of our operator, and we'll probably have time for them.

Hi. Good morning.

There's two from me, please. Firstly, just on the price increases you've been putting through, have there been any signs of pre-buy anywhere?

The second question is on Global Tech margin. Obviously, the price cost has been very well managed in Q2.

Is there anything to call out in terms of phasing on the cost side or potential headwinds in H2? I'm thinking about memory prices or other inflation topics that you might have exposure to that might require further price increases in H2 in Global Tech, please.

Thanks.

The first question was again on?

Price increases pre-buy.

It's not that we do all our price increases for the whole group at, whatever, the first of April. They're always phased, it's also not like perhaps prior to COVID that we would do one price increase per year and that's it.

We have now much more regular price increases, they are much more sequenced. Yes, for sure, there's going to be always some pre-buy that when one specific product family we increase the price increase, we will have some pre-buy there.

I think in the bigger picture, it's not really something that moves the needle because we have had so many price increases over time. Also last year we had price increases, also there we had pre-buy.

I don't think it's something that is significant to talk about. When it comes to Global Tech, we have always said that we aim for first, an organic growth higher than the group ambition, more higher single digit.

Two, that we want to do that with an EBIT margin within the 17%-18% bandwidth. I think we are delivering on that ambition, I think that's the numbers that you should have in mind also going forward.

Thank you very much.

Hello. Thanks for taking my follow-up.

It's on cash flow. I see that Americas and Global Tech were the standouts in terms of cash flow, while I noticed the Entrance Systems was a bit weak, mainly due to working capital.

Was it an element, perhaps higher receivable, that boosted the organic growth that we saw in Entrance Systems?

No— Is a fair assumption. On Entrance Systems, it's also so that we bought a building in Monroe, North Carolina, which has a negative impact.

If you would exclude for that, they would also still continue to have a good cash flow. Global Tech and Americas, they have good earnings.

They also have good, let's say, working capital management, and that it's just continuing. It's nothing strange.

As I said, with the exception of Entrance Systems where you have that we acquired a building.

Is the building counted in CapEx or in working capital?

It's CapEx.

Yep.

CapEx, okay. Thank you.

Well, thanks for the follow-up. Nico, I just wanted to dig into Entrance Systems and GT a little bit.

On Entrance Systems, you obviously had some challenges after the great stay-at-home post-COVID logistics market in recent years and growth has slowed. On the industrial side of the business, where do you think we are in the cycle?

Do you think we've found a level? How do you think that can now move, and what do you think that can do to the overall Entrance Systems growth rate in the coming couple of years?

On Global Tech, you mentioned a very strong Global Solutions performance, but a strong performance in HID. Given where we are in technology cycles, do you think that the speed of HID has been hampered in recent times by any internal topics?

Do you see that changing going forward, and where do you think you are in the HID kind of multi-year growth cycle?

If I start perhaps with Global Tech, HID and Global Solutions. When I was talking about the less or the non-critical CapEx investments in Europe that are a bit postponed.

That's really where you see that in HID. I also said that I'm confident that that will improve in the second half, so I think we should see an improvement of that part in HID.

I don't think it's linked to internal issues in HID. As you know, we have divested our passport business, but that was already last year.

I think if you see our main business, they have a stable organization, stable performance. It's more this CapEx or non-critical CapEx related decisions in Europe that have been postponed.

If you take in Global Solutions, they had strong growth despite a weaker hospitality in the quarter. Like I mentioned, the hospitality weaker quarter is just a timing issue.

With hospitality, we have a better view on projects. It's just that some of the projects did not fall in Q2, and they will come later.

I think that is also not an issue going forward. It's more a one-time effect that we have seen in Q2.

Entrance industrial.

Entrance on the industrial side. Our logistics vertical is around 15% of Entrance Systems.

Industrial segment is around 40% of Entrance Systems, and most of the industrial segment is loading, you can calculate, the data a very big exposure to the logistics vertical for the industrial segment. Going forward, it's difficult for me to see where we are in the cycle.

What I can say is that the market development in North America is flat. We don't believe it's going to get worse.

When it's going to get better, we don't really know. What is a fact in Europe is that if you look at the bigger projects of, let's say the Amazon and the type of Walmart or the bigger companies doing those big logistic projects in Europe, that market is still single-digit down today.

I don't think it's going to get worse, but when are we going to see improvement? The honest answer is that we don't know.

Okay, thanks.

I think there are no more questions left, which means that it's time for us to round up this conference. If there are any follow-up questions later on, please feel welcome to reach out to us at Investor Relations.

With that, I guess it only remains for the three of us to wish you a wonderful day and a wonderful summer, and we look forward to speaking to you again after the break. Thank you.

Thank you.

Thank you very much.