Good morning, everyone, and welcome to the presentation here of our financial report for the first quarter, fiscal year 2026/2027. I'm Magnus Söderlind, and I have also Peter Schön here on the side.

Hi, everyone. Yeah.

Just to give you some highlights from the quarter. On the underlying market, the key things are two, I would say.

We see some effect of the Iran conflict in rising raw material costs and energy prices, and also in freight cost. That is something that we had had great focus to manage during the quarter.

I would say all the companies that are affected of these kind of increases have proactively worked with price adjustments. On a group level, I would say we have been successful in doing so.

We don't currently see that we should have any negative effect of this, at least on the short-term perspective. If we look at the market, we are 40% exposed to the construction industry, and then mainly in the Nordic and UK, and then 60% of our revenue is to the industry segments.

Both of them are currently, I would say, still, we feel, are cautious. We don't see they are declining, but they're not increasing in a big term anyway.

We had some positive signs in end last calendar year, but our kind of hypothesis is that the Iran conflict has partly put some damp on the recovery of the industries. There are some good signs in the construction area, but we don't see those kind of investment increases yet in the business we are running, but hopefully we should see that in the coming quarters.

Still, we are able to increase earnings, increase margins, and returns, and also earnings per share. If we look at the turnover, we had 1% organic growth.

This is the third consecutive quarters with some organic growth, even if there are small numbers. That, I think, is a good kind of sign that we have reached the kind of bottom of the kind of underlying market development.

We hope then to see a continued growth going forward, but still in low numbers. We increased the EBITA with 9%, and we now had 26 consecutive quarters with improved profits.

Also we continue to improve the EBITA margin, it's now 10.7, above 10%, and that is an improvement with 0.8% units compared with last fiscal year same period. We also continue to work on improving the returns, measured as profit to working capital, as one key KPI, and we continue to increase that and we reached 37% this quarter.

This is a rolling 12 number, if we look at the 3-month figure, it's even higher than that. We have a positive momentum in the profit to working capital ratio, and I expect that to continue going forward.

We had an earnings per share rolling 12 improvement from 8.2 to 8.5. All kind of our key parameters is moving in the right direction, and that's, I think, is very positive, despite that the market is still quite cautious.

If we look at acquisitions, this is the rolling 12 situation. We acquired one company in the Q1 quarter, All Coating.

It's a Swedish company. As you see, we have been quite active in the UK during the last 12 month.

This was the first acquisition in Sweden from some time. This is actually an add-on acquisition to Uweco, one of our platforms, working then in the coating segments.

If we look at overall the acquisition situation, we still have the ambitions to acquire in the range of 50 to 80 million EBIT per annum. That is something we aim for doing this year as well, even if this acquisition was quite small.

It's a 25 million, but the profit is very, very good. Still, of course, we need to do additional acquisitions going forward to keep up that path.

That is still in the target to do so. I showed this before, and this gave kind of the historical perspective.

As you can see, we had this positive EBITA growth, and we also have this positive trend in the EBITA margin. As said earlier, we are aiming to continue improving both the profit and the profit margin over time, even if some specific quarters may not have an increase.

Over time, we should see a continued development like we see on this picture in both margins and profit in absolute terms. The net sales, as said earlier, we had 1% organic turnover growth.

We didn't have any currency effect in this quarter. You who has been following us for some time know that we made some divestments.

The biggest one was the Schou Company operations, but we also divested Luna Balticum. We also earlier than that divested the Fast development in Asia, even if that is not a part of this comparable period.

It's here you see the Schou and the Luna Baltic effect, that then the combined acquisition and divestment had a negative effect of 1%. On the total, it was a zero quarter compared with previous year.

The gross margin, we had a steady positive development, as you can see on the slide, over time in the gross margin. As I said it before, it's mainly organic driven.

Even if we only acquire highly profitable companies, it's not per definition that they have a gross margin above 50%. This improvement that you see is mainly organic driven.

That's also the case in the last quarter here. We now have three consecutive quarters with a margin around 50%.

As I said it before, this is also positively effect of the divestment we done. It's not per definition that new acquisition will enhance this development over time.

Still, we are not happy, really, with this level, I expect some improvement over time, even also it's not kind of big numbers. You should see that as a development over time more than as in a specific quarters.

The divestment and also the acquisition, as you can see on the right part of this, has brought us to 82% of our own product companies, compared with 72% some years ago here, two years ago. We had had a positive development also in the mix that is partly then the explanation for the gross margin trend.

If we look at the group level, we set the target to reach profit to working capital of 45%, and EBIT of 500 million, and EBIT margin of 10%. We continue to improve and work towards those target.

As said before, we had hoped already to be, at least on the EBIT and EBIT margin, on those levels. Then we had expected the underlying market to kind of be more stronger than that it has been during the last quarters.

We expect have a positive effect when the underlying market starts to pick up, because we have now a higher gross margin on a group level. Also, we have lowered costs organically, cost that we don't see we need to rebuilt when the market picks up.

We should have good leverage with the good and higher gross margin levels in combination with a more cost-effective operations. The top line then will be very good contribution to the margins and to the EBIT in absolute terms, and also then, of course, to the profit to working capital measurements.

We are still having those target at sight, and we continue to work on that, but we need to get some help of the underlying market to get there in the coming quarters. I will then hand over to Peter to talk about the earnings per share development and some other topics.

Thank you, Magnus. Earnings per share continues to improve.

Rolling 12, it's increased from 8.45 to 8.50. There is a slight reduction in the quarterly EPS, and that's mainly caused by slightly higher interest costs and currency revaluation.

Still, we're on a EPS growth path going forward. If we look at the inventory levels, we do have a lower organic reduction, as we said for a few quarters now.

We had a quite high organic reduction rate going back a few quarters, but now it's a bit slower. The organic inventory decrease is 18 million in the quarter, and it's effected partly that some of our companies have decided to increase their safety stock.

Just as Magnus said before, it's a bit turbulent in the wake of the Iran crisis, they have decided to increase their safety stock somewhat. That, of course, also makes the reduction rate a bit slower as well.

That also reflects on the ITO. It's relatively flat, and it's negatively impacted also from the divestments that were made.

Both divestments and the increased safety stock has influenced that one, so. The work still continues.

We do have some stock to reduce going forward, but we'll see how it plays out with the safety stock. It's not on the level that we had in COVID or so, it's just a slightly bump-up in the safety stock.

The cash flow was more or less according to plan. It's normally quite a strong quarter, it was this quarter as well.

Not much to say. As I normally say, it's the Q4 we have quite a bad cash flow, and it's based mainly due to ESSVE spring order that they get paid now in this quarter and the coming quarter.

This is a normal seasonality pattern. As we acquire more and more companies, of course, this seasonality pattern will be more spread out, I think, so.

According to plan. We decreased the net debt, mainly due, of course, to the good cash flow, we decreased the net debt by 100 million in the quarter.

The net debt/EBITDA is back on the same level as it was a year ago, 2.5. From that point 1 year ago, we'd made acquisitions of 550 million and divestments of 280 million.

As Magnus said, we just made a smaller acquisition in this quarter, but the acquisition target remains intact and we have a good pipeline as well, we will continue on that path going forward. I think back to you, Magnus.

Yeah.

Let's, get into the different divisions' performance. The Core Solutions continued to have a very strong development.

They had a revenue increase of 11% in the quarter, and and half of that were organically driven and and half of that was due to acquisitions. This is the division with the biggest exposure, I would say, on aggregate level to this construction sector, with ESSVE being, a company with the turnover roughly 1 billion SEK.

They they faced quite a flat quarter, but but there are companies in in this division exposed to the public property sector as well as infrastructure, and they they faced a good demand, actually, in in the in this quarter. The EBITA increased by 30%, and the EBITA margin is now 14.7%.

You can see on the slides here on the lower end that we have had a good EBITA development rolling 12 as well as the EBITA margin here rolling 12. Partly due to increased revenues, but also strengthening the the margins and the profit levels organically as well.

I'm I'm happy with this division, and they also have a profit to working capital well above the 45%. It's a good cash conversion in this division.

The next division is Safety Technology. Here the revenue increased 27%, and actually had some growth across the majority of all companies.

This is partly facing, the industry segment as well as the construction segments. They also had a very positive EBITA increase by 29% in the quarter.

That is also combination of organic development as well as successful acquisitions. The latest acquisition in this division was A1S, this fire curtain companies based in the UK, and they have come in in in a very good way in the group and and performed even a little bit better than than expected in in the first month here.

Overall, we had a strong contribution in the in the fire segment, safety segment, as well as safety signage and safety equipments. Also here, the the margin increased to 16.8%, and that there was previously on 16.4%, but still a very good development.

Also you can see on on the on the lower end here a strong revenue development, mainly for acquisition, but also some organic growth. We also have some improvement in the EBITA margin, despite they are already on on a good level.

The foremost, we have a strong development here in the EBITA in absolute terms, I'm I'm very satisfied with this division as well. The Machinery & Equipment was a disappointment in this quarter.

This is a division and a cluster of companies that has performed on a on a much higher level historically. They have been on on, as you can see here, on the EBITA margin well above 10%.

They are actually now at at, in this quarter, only at 4.2% compared with 11.6% last last fiscal year. Also we had a decline in EBITA here, and that is mainly due to the a less favorable business mix and also that we have some one-off costs here.

We also have a flat revenue here in in the group. I think if we look at the revenue development, it's one of the reason is that this is more of investment products.

Machinery is typically investments taking over the customers' investment budgets. We feel there are some, hesitations due to the uncertainties, partly due to the Iran conflict and and maybe some other uncertainties.

They have kind of prolonged the order time for some machineries, some that the companies expected to come in this quarter, but they they are needed by the customers, but maybe we will see them in in the quarter we are currently or the quarter after that. There are there are some needs out in the customers that they need to fulfill, and and we hope and expect them to come here in the coming quarters.

I I assume and expect this to be kind of a temporary dip, and I expect them to be back on a much more healthier level in this Q2 quarter. This was also the quarter the the Sorry, this was division, Uweco, they made the add-on acquisition All Coating, and they have come in in a very good way as well, even if they only been here since April 1.

I would say they are also a little bit above the expectation we had in in terms of performance, so that is is promising for for the for the future. Once again, a big disappointment, but my expectation is that this will bounce back already in in this this current quarter.

Then we have the PPE & Medical divisions, and this is, I would say, more of the the traditional old Bergman & Beving products, and the Luna Group, who is the big wholesalers in this group. If you look here, the revenue totally 360 million compared with 485 million last fiscal year.

If you adjust for the divestments, it's more or less a flat revenue development in this division. That is also the case for the profit.

The EBITA is 9 million compared with 19 million, but if you would kind of make the adjustments for the divestments, the EBITA level is on the same level as as last fiscal year. Here we still have some some work to be done, and we are continuously working to improve and and improve the efficiency and and the margins, and and also look into other if we need to make some other, activities to to get this division on on a better level.

This is something this is not a quick fix. You shouldn't expect this division to bounce up back on a higher level in in the next quarter and and the next coming quarters.

This is more kind of a a long-term task to to to improve the the performance of this division. There are good improvement opportunities, and there are a lot of good activities going on, I expect also that we should see some improvements here.

As said, it's it will be a much slower improvement path in this division compared with Machinery & Equipment division. What are our priorities going forward?

The underlying market is still a little bit uncertain and difficult to predict. We have this emerging cost increases that I said in the beginning that we have, addressed, and I think we is under control and shouldn't affect our gross margin here in in near term, at least.

I think that is under control. I don't expect a big kind of underlying market growth in this current quarter, and but hopefully we will see that in the end of this calendar year, but that that is still uncertain, I would say.

As there are, an increased conflict again in the in the Iran area, and and we don't really it's very difficult to predict what type of effect that will have on on the global economy and and and ultimately on on our companies. We will continue to do what we always been doing: to to focus on profit expansion over revenue growth, even if we hope and expect to get some support from the underlying market going forward.

We continue to allocate capital in line with the focus model, and we continue to support our companies with the the BBB toolbox. Here is a very hot topic: AI.

We had really encourage our companies and supporting them to to approach AI and really look into how that could support their businesses. We have some good traction, I would say, across many companies currently, the companies that are have been able to leverage AI, increased their kind of service level, in increased their cost efficiency, and also enhance their their their sales performance.

We see some positive effect already now, and I expect to see some positive effect on on that going forward as well. If you are interested, we have a separate section in our annual report we released some weeks ago about some case examples and some more in in-depth details of what we are doing within the group and our companies in the AI space.

Then last but not least, acquisition is part of our DNA. As Peter was saying and I earlier also mentioned, we we continue to work on acquisitions, and and we expect to deliver on the on the acquisition target that we have set during this fiscal year as well.

We have some group theme. Peter showed the ITO, and also mentioned that we some companies are now building some extra safety stock.

It is not on the magnitude that we had during the corona, and I don't hope and expect we should be need to go there. This is, of course, monitored on a daily basis based on what's happening with the logistics flows and so forth.

Inventory turnover is a key KPI we we measure and follow up on all our companies, and that is a focus that all our companies are working on. We had some good development in this, and we are close to be back on the pre-corona level, and we expect to to have our companies to continue to work on that going forward.

As said, we are very focused on on the gross margin, making sure our companies are focused on the value add, the highly value-add business that they have, and that is the business they are focusing on. Also to make sure that we proactively addressed the price adjustment triggered by that the emerging cost increases that we have seen in in raw material and freight, and also in in production costs.

Last but not least, we are still, as said earlier, we had worked on the gross margin improvements across the group. We have worked on the cost efficiency, taking out some 100 millions in in cost during the last quarters.

We are, I think, we are a much stronger position when the underlying market starts to pick up. Hopefully, we will see that in in the next coming quarter, and then we expect to have a good leverage in in the position that we have.

With that said, I think we're ready to open up for the Q&A.

Thanks, and good morning, Magnus and Peter. Thanks for taking my questions.

Maybe starting off on the rising input cost that you allude to. How much worse has the situation become here sequentially since Q4?

It has been very volatile. For example, some plastic components, they peaked at 50% price increases.

They are now down to 30%. Of course, if this situation in the Ormus Sound will kind of escalate, maybe we will some additional price increases on those plastic components.

In the steel area, for example, we have a 10% year-on-year increases, mainly triggered by the increased energy costs. This is something that we actually monitoring more or less on a daily basis, actually partly support by AI.

Some companies has build agents following in real time the freight and raw material cost development, making them to take tactical decisions on when to order, but also to monitoring and make sure that they can make some compensation for those increases that they are facing. Still, it's very uncertain what kind of an escalation of the conflict will kind of result in in terms of price increases on both freight and energy and raw material cost.

It needs to be monitored very, very closely going forward. I don't know if that was an answer on your question, because [laughter] But it's really kind of

Yep.

measured and follow up on a daily basis currently.

Yeah. Maybe a follow-up on that as well.

You said that you've sort of put some price hikes to mitigate this quite successfully. Looking at the 1% organic growth, how much is volume versus price in that?

That seems fair to assume that volumes is a bit down given the price increases. It

it's very few of our companies that can change the pricing overnight. What you and it's also takes time before the price increases actually effects that the cost of goods sold in our companies, because then you need to consider, the current stock levels and the delivery times and so forth.

You don't really see the effects neither of the cost increases or the price adjustment in this quarter. That that is effect that have some some some delays, and and partly you will see some effects in in this current quarter, the Q2 quarter.

As said, it takes some time before that those two factors actually influence the the the margins and and the costs.

When they come through, then you think you're quite well prepared with price hikes to mitigate this?

Yes.

Yes. Great, understood.

In Core Solutions, obviously very impressive margins here in the quarter. Is there sort of any temporary effects driving this, and how much is sort of organic versus acquired in this sort of margin uplift?

No, I would say this is the result of the work we have been doing organically in combination with good acquisitions. There is no kind of temporary effects in this division that you see.

This is kind of a result of the work that has been done over time. That's also relevant for the Safety Technology division.

Perfect. Understood.

That's all for me for now. I get back in queue.

Thanks a lot.

Thank you.

Good morning, Magnus and Peter. Just two questions from my side.

Obviously, strong development within Safety Technology and Core Solutions, which are currently carrying the group forward, looking at earnings. How are you thinking about the capital allocation between the divisions going forward?

Should we expect acquisitions to be concentrated into these high performers, or are you willing to deploy capital into Machinery & Equipment and PPE & Medical to accelerate their turnaround?

Yes, we have said that we currently have the four divisions, and the PPE & Medical division, you shouldn't expect acquisitions within that division in the coming quarters. This division is focusing on getting improved performance in the current portfolio of companies.

The acquisition activities would then be run across the three remaining divisions, including Machinery & Equipment. If you look at the turnover of that division, it's much significant smaller than both the Core Solutions and Safety Technology division.

With that said, they have some capacity to be active within the acquisition space. You should also expect to have some acquisition within the Machinery & Equipment division going forward.

Understood. Thank you.

Also looking at operational leverage, and obviously, able to improve the gross margin in a very impressive way. I know that the Luna business, which does not have the same margin profile, if that company continues to or will start to turn around and grow again, will you be able to maintain a gross margin around 50%, you think?

If

Luna has quite a broad exposure, including the industrial sector as well as the construction sector. If they would have some underlying market increase, I expect that effect also to take place across the group.

I think that the portion of the Luna business will not increase on a group level. Yes, I expect us to be able to maintain the margin level that we have if Luna starts to grow their business.

Perfect. That sounds promising.

If possible, is it possible to help us to quantify the leverage that you expect once the volumes are returning? If you were to see 5% organic volume increase, what kind of EBITA margin expansion would you expect to flow through giving the current cost structure?

I don't know, Peter, if you'd like to

No, we don't really divulge figures like that, I think I'll pass on that answer. Of course, we will get some positive effects, for sure, but we don't want to quantify that.

Totally understand, but I could just imagine it should be quite good, then.

It should be, yeah.

Perfect. I think that was all my questions for now, Magnus and Peter.

Thank you very much.

Thank you.

Thank you.

Hi again. Just a couple of follow-ups here.

You mentioned here in the Machinery & Equipment, the business that you see sort of a bounce-back already in Q2. How good visibility do you have here for the coming quarters?

Obviously, quite volatile on a quarterly basis here.

As mentioned in the report, we had some extra costs in this division during this quarter that we don't foresee to have in this current quarter. We also have some projections in terms of revenues and margins in our companies.

Some of the companies, for example, the ATI Solution, is quite project-oriented business. They had a little bit weaker result in the Q1, but we know already now that the Q2 will be much stronger for them.

We also have the Polartherm business, the company doing mobile heaters, that we also have quite a good kind of forecast on where they will land in this current quarter. Yes, we have already now indications on that we will have improvements in this division in this quarter.

Okay. Sounds good.

Sort of on the extra cost, can you sort of quantify that a bit more?

The main reason for the division not to deliver according to expectation in the Q1 is a product mix component, but the majority of the discrepancy is related to increased costs. A lot of that cost is kind of a more temporary characteristic.

Okay. Perfect.

I think that's all for me now. Thanks again.

Thank you.

Thank you.

We have one written question, and it's 'The Machinery & Equipment EBITA trend is clearly negative. Many of these companies are acquired recent years, such as Polartherm, [T-M-A-N-I-O?]

, Machin AB, and LabSens. Have these acquisitions performed worse than expected, and what has gone wrong?'

We are a long-term owner to our companies. If we take some concrete example, Polartherm, we have owned them for, is it 4 years roughly, I think?

Yeah.

They have performed very well during the last 2.5 years.

The first 2.5 year.

The first 2.5 years. Then they were hit by the tariffs, because the US is quite a big market for Polartherm.

That kind of stopped a lot of the sales temporary, and they also deliver quite big volumes to the US Air Force. There was a lot of uncertainties around the tariffs and the ordering also within the defense segment.

That has loosened up partly now, but still. They have some firm orders that they expect to deliver out in near terms, but they haven't materialized yet.

They also were quite exposed to the rental market, because they were selling to renters, Cramo and similar companies, and some companies in the German market. When the kind of construction demand weakened, the renters didn't buy anything for some period.

If we look at the Polartherm order book situation now, it's improving significantly. I'm confident that Polartherm, over time, will deliver according to the expectations, and maybe even better.

I would say the ATI, I said earlier, that's very project-based business. They have volatile invoicing, but they perform better still currently than expected when we acquired the companies.

You get some volatility in some quarters, and this Q1 quarter was affected by that volatility in ATI. Then LabSens, for example, as another example, they are more stable.

On a general level, I would say the company selling machineries and equipment have some negative effect of the underlying market situation. Over time, in a more normal market, I expect all of them to pick up to get to the level they have been before, or even better.

Yes, if you take a very short perspective, some single quarters, if you look at this division and the performance, yes, I agree they haven't performed according to the expectation. Over time, I'm still confident that they will be at least on the level that we expected when acquired.

It's not the situation that the companies has shown to be something different than expected when we made the acquisitions. It's more a reflection of the underlying market situation as such.

Peter, do we have any other written questions?

No, that's all the questions, I think if there's nothing else Okay.

Thank you very much for listening in. As said earlier, we now have a quarter with improved margins, improved returns, improved profit levels.

We have the aim to continue on that path going forward as well. As said before, the Core Solutions division and Safety Technology, they are no extraordinary effects in those divisions, and I expect them to continue to perform on a very good level.

Then I expect the Machinery & Equipment to perform better in the Q1 compared with the sorry, in the Q2 compared with the Q1. Then we will continue the steady work within the PPE and Utility division to steadily, but improve the performance of those companies, even if that performance not will be enhanced by acquisitions.

With that said, thank you very much for listening once again, and have a really, really nice summer when that period [laughter] At least I will start now to slow down a little bit and get some hopefully 2 weeks of some vacation, and if you are getting some vacation now, I really wish you a very nice summer vacation. Thank you.

Thank you, everyone.