Good morning and good afternoon, everyone, and a warm welcome to Bufab's Q2 report. My name is Erik Lundén, President and CEO of the Bufab Group, and together with me here today, I have Marcus Söderberg, Group CFO.

By attending this meeting, you accept that this meeting will be recorded. I will start this presentation to go through our highlights in the quarter, and then leave the word over to Marcus for some financial details.

After that, I will sum up our performance in each region, some group news, and then at the end, sum up the quarter and also time for Q&A. If we then start with the highlights in the quarter, I'm overall pleased with our performance.

We delivered strong organic growth and clear improvements in both gross margin and operating margins. We continue to execute very well on our strategy with clear focus on value creation for customers through tailor-made C-Solutions with C-parts and special components.

Regard growth, growth came in at strong 5.3%, in line with our growth target, and with a positive development in all regions. The growth was mainly driven by increasing market shares, with positive contribution from our previously communicated larger projects.

Underlying demand remained cautious during the quarter. We saw good demand in sectors such as energy, digital infrastructure, and defense, while demand in construction, kitchen and bathroom, and automotive industry remained weak.

Both gross margin and operating margin reached high levels in the quarter. The gross margin improved by 2.1 percentage points and reached high 33.2%.

All the 12 last quarters, we delivered improved gross margin compared to the comparable quarter, and we expect this trend to continue throughout 2026. The adjusted operating margin amounts to strong 14.7%, which means that we now have consistently improved our profitability compared with the previous year over the past seven quarters.

All regions and almost all our sister companies improved their results compared to last year. At the beginning of July, we announced the acquisition of DC Iron, one of UK's leading distributors of ironwork parts.

This acquisition is in line with our strategy of acquiring profitable companies in attractive niches within C-parts and technical components. I will come back with more details on this acquisition later in this call.

I will now leave the word over to Marcus for some financial highlights.

Thank you, Erik. We start by having a look at the development in terms of growth.

Total growth in the quarter amounted to strong 11.7%. We continue to see a gradual improvement of the organic growth throughout the quarter.

It's now, with this quarter, the fourth consecutive quarter where we see organic growth. The growth was mainly driven by increased market shares, like Erik said, and also the previously communicated larger projects.

What's really nice to see in this particular quarter is that it's actually organic growth in all our segments. The acquisition of Nova Group that developed in accordance with plan within the quarter contributed with 7.2% that contributed to the overall growth in the quarter, while the strength of the Swedish krona had a slight negative impact in the quarter.

The during 2025 communicated divestment within Component Solutions Group within segment Americas had a minor negative effect on growth with 0.3 percentage points. Order intake, deserves to be mentioned, was in line with net sales in the quarter.

If we look at gross margin and opex development, we are very satisfied with the gross margin development in the quarter, which increased compared to the comparative quarter and reached strong levels of 33.2% compared to 31.1% in previous year, an increase of 2.1 percentage points. All regions and most companies increased their gross margin in the quarter, which is really nice to see.

The increased gross margin is a result of a focused work to continue to improve both our customer and product mix, as well as landed purchase savings in the quarter, some positive currency effects compared to the comparable quarter as well, as well as certain price adjustments made. Over the past 12 quarters now, we have seen strong momentum in the gross margin development, a development that we expect to continue throughout the rest of 2026.

Operating expenses, in comparison net sales, amounted to 18.5%, which slightly higher than previous year. We still have quite a big focus on strong cost control, but at the same time, we continue to invest in certain growth opportunities and initiatives in selected companies.

All in all, a growing top line in combination with a continued strong gross margin development, paired with good cost control, led to a clear improvement in both absolute adjusted operating profit and margin in the quarter. The adjusted operating profit increased with 65 million SEK, or 24.2% versus the comparative quarter, and landed in on 333 million SEK.

The adjusted operating margin increased with 1.6 percentage points to 14.7 percentage points compared to 13.1% last year. What's really nice to see is that all segments increased both their adjusted operating profit in absolute figures, as well as their adjusted operating margin quarter-to-quarter.

Given the strong first half of the year, we now are well on track to reach our long-term margin targets for the full year of 2026. Cash flow-wise, cash flow increased versus the comparative quarter, a direct result of the improved underlying result.

Cash flow was also somewhat supported by reduction in net working capital. The buildup of accounts receivables, fueled by the strong organic growth in the quarter, was more than offset by inventory reductions and somewhat higher accounts payable.

Deserves to be mentioned is the increased non-cash item figuring the cash flow statement versus the comparable quarter. It's mainly driven by an accrual buildup related to CBAM cost.

CBAM, as some of you might know that much about, is EU's new Carbon Border Adjustment Mechanism, which affects our European companies from January 1st, 2026. Since the cost that we carry due to this new regulation has not yet been paid out, they have been increasing the non-cash item in the cash flow compared to previous year.

According to current regulations, the accumulated CBAM provision is expected to be settled during the first three quarters of 2027. Net debt and net debt versus EBITDA-wise, we remained at a solid 2.4 multiple despite dividend payment and currency effects.

As we made some dividend payment in late April, and that together with some unfavorable foreign exchange effects on our acquisition loans in the quarter led to a slightly increased debt, which was in fully, basically, offset by the increased EBITDA strong development in the quarter, meaning that we stay on the leverage of 2.4. The stable leverage level was supported, as said, by the strong underlying EBITDA growth, demonstrating the strength of the group's earnings development and cash generation in the quarter.

With that, I leave the word over to you, Erik.

Thanks, Marcus, and I will continue then with some highlights from each of the regions, and I will start with region Europe North and East. Total growth in the region was 3.8%, of which organic growth was 3.8%.

Market conditions continued to vary across countries and customer segments in the region. We saw positive development in Norway, Poland, and in Benelux due to increased market share.

The furniture and kitchen sector for HT Bendix continued to face low demand, whereas demand in defense, digital infrastructure, and electrification were strong in the quarter. The gross margin was very strong, reaching 35.1%, an improvement by 3.9 percentage points, driven by a better customer product mix and consolidation of purchasing volumes and currency effects.

Operating expenses increased quarter-to-quarter, mainly as a result of currency losses and higher personnel costs in the region. Overall, this resulted in improved and strong adjusted operating margin of 16.4% compared to 14.0% last year.

If we then continue with region Europe West, the total growth in the quarter for the region was 35.8%, a very strong number. The growth was largely driven by acquisition of Nova Group last year, which contributed by 26.6%, while organic growth came in at a strong 10.1%.

The organic growth was driven by a strong development at Floss in the Netherlands, Bufab Spain, and Bufab Czech, supported by increasing market shares in several markets, including positive contribution from our big project to the semiconductor player in the Netherlands, and also better product mix in the regions. The demand was particularly strong in sectors such as mechatronics, aerospace, and defense in the region.

The gross margin improved by 1.3 percentage points, driven by improved product mix and higher added value in new projects. The cost level was lower than last year.

As a result of the strong growth, improved gross margin, and low cost base, the adjusted operating margin improved to 13.8% compared to 11.8% last year. The newly acquired Nova Group performed according to plan during the quarter.

Continuing then with region Americas, the total growth was -3.2%, which organic growth was positive 2.6%. The organic growth was mainly driven by price increases driven by CST.

The demand in the RV and trailer market, which is an important segment for ABS, remained stable, but on a low level. We saw longer than usual plant closures during American holidays in the quarter, and low demand continuing in automotive industry, which particular impacted CST.

The gross margin improved by 1.6 percentage points. The improvement was mainly driven by general price adjustments and a successful turnaround within our sister company CST.

The cost level was lower compared with last year, mainly due to divestment of CST production facility, combined with continued good cost control in the region. Overall, this resulted a strong improvement in the adjusted operating margin, which increased to 21.1% compared with 19.3% in the comparative quarter.

We continue then with region UK/Ireland. The total growth in the region was -2.3% with organic growth of positive 0.3%.

We continue to see a weak demand in the construction industry, impacting Timco in the region. Rising market prices of stainless steel impacted Apex in a positive way, and Bufab UK benefited from increased market share.

The gross margin improved by 2.2 percentage points, mainly driven by rising prices on stainless steel, sourcing savings, and somewhat lower freight costs in the region. The total cost level was higher compared with last year.

This was explained by positive foreign currency translation, and underlying cost development continues to be characterized by good cost control overall. This resulted in improvement in the adjusting operating margin to 12.2% compared with 10.8% in the comparative period.

Finally, region Asia-Pacific, the total growth amounted to 14.6% with strong organic growth of 14.9% for the region. The strong growth was mainly driven by Bufab Shanghai and Bufab India, and impacted by strong growth within energy and industrial automation.

The gross margin improved by strong 3.5 percentage points. The improvement was driven by continued active work with implementation of value-based pricing, improved customer and product mix, as well as purchasing savings.

The cost level was lower compared with last year, primarily as a result of higher volumes, currency effects, but also thanks to continued good cost control in the region. A strong development in all levels led to impressive improvement of the adjusted operating margin, reaching 20.9% compared with 13.7% in the comparative quarter.

I will after that continue with some group news, and I would like to start to talk about acquisition of DC Iron that we signed in beginning of July. DC Iron is a UK-based distributor of ironwork parts.

The company supplies products to fencing, gate systems, iron components, and key clamps systems to fabricators, engineering companies, and contractors across the UK. DC Iron had a turnover of 14.8 million pound last year, with margins significant above Bufab's profitability target of 14% on EBITA level.

The company is based in Newcastle, UK, and has 40 employees. The former owner, MD, Scott Collins, will continue as MD after the acquisition.

Of course, it feels great for me to welcome Scott and his team to Bufab. We acquire 100% of the shares with a 3-year earn-out, and DC Iron will be reported as a niche company within region UK and Ireland.

Why do we acquire DC Iron? We see DC Iron as a strong fit for Bufab.

It is in line with our strategy of acquiring profitable companies in attractive niches within C-parts and technical components. The company operates in an attractive and resilient niche market and are one of the leading players within their niche.

They have a strong product range, low customer concentration, with end customers in segments such as infrastructure, public, indoor, and safety. Looking back, DC Iron have delivered excellent growth and profit, and we see great opportunities in the Bufab family to continue this positive trend.

To conclude, we see a strong culture and commercial fit for Bufab, and acquisition fully in line with our long-term strategy. Finally, on the group news, I'm happy to share that Bufab Shanghai has been awarded as Excellent Cooperative Supplier by Schneider Electric at Schneider Electric Supplier Day 2026.

Bufab have been working closely with Schneider globally for many years, and we have today a strong collaboration with Schneider globally, but also in China. In China, Bufab Shanghai has gradually been growing with Schneider and is today supporting 20 of Schneider's 23 manufacturing sites in China and are today seen as a long-term partner to Schneider.

Bufab Shanghai got the award for the tailor-made end-to-end solutions, including VMI services, R&D support, and strong customer service. For me, this recognition demonstrates our ability to support customers throughout the value chain, from product development to efficient and resilient supply chain solutions.

We will, of course, continue our value creation journey with our customers and ensure that we build long-term partnerships through our services in line with our strategy in the Bufab family. I will then end this call with sum up the quarter and say a few words about our outlook and priorities.

To sum up, I'm overall pleased with our performance in the second quarter. We continue to execute very well on our strategy, and we delivered strong organic growth, clear improvements in both gross and operating margins, and all regions and almost all our sister companies improved their results year-on-year.

Over the past 12 quarters, we've seen strong momentum in our gross margin, a development we expect to continue during 2026. We have, over the last couple of years, to work actively with our value creation for our customers, implement more value-based pricing across organization, gradually improving our custom product mix, and this has clearly started to pay off, and we are well on track to achieving our margin target for the year.

As previously communicated, we have not been affected directly by the Iran war and disruption in the Strait of Hormuz, but we continue to see cautious market and a cautious approach among all customers, and somewhat increasing purchasing prices from Asia lately. Our focus going forward remained the same, and that is to focus on things we can control and continue to execute well on our strategy, with clear focus on value creation for our customers.

This includes continue gaining market shares, gradually improving our gross margin, and a good cost control, and, of course, delivering a strong cash flow. If doing a good job here, this will put us in a good position when the market demands returns.

Despite the continued uncertainty in the world, we remain optimistic about the future and believe that we have a strong momentum for the future. That was then my final slide for today.

I will now open up the floor for Q&A, please.

Thank you. Good morning, Erik and Marcus.

Hope you can hear me. I have a couple of questions.

I want to start with the strong organic growth, which is good to see, but I want to break down this a little bit further. Starting in West here, 10% organic growth, a clear pickup here.

Is that a reflection mostly on previously won contract that is now being fully ramped up, or is it even more to come in the near term, or is it sort of other market share gains you're taking here in the quarter? Can you maybe elaborate there?

Sure. Good morning, Jonny.

Yes, it's a combination. We are doing well overall in the region, and we have several sister companies that are performing well and grabbing market share.

On top of that, we also have very good momentum in Netherlands with a big semiconductor player that is ramping up, so that is also contributing positively to the organic growth. It is a mix between overall good performance in many sisters and that we are ramping up the semiconductor partnership that we have in Netherlands with a big semiconductor player.

Understood. Is it still ramping or is it sort of this level?

Yes, we still have a ramping up phase, still is in the ramping up, and hopefully more to come.

Understood. Sounds promising.

Then I want to move to Asia a little bit, also very strong growth. What is happening there?

Is it any sort of project sales impacting positively here in this quarter, or is it pure regular market share gains there as well?

No, it's I think regular market share gains. As I mentioned when I talked about the region's performance, we see really strong momentum in China, and we have seen that for quite many quarters, doing a good job with many of our customers there.

On top of that, we also see very good performance from Bufab India in the quarter, and that combined put us in a very strong performance in the quarter. It's mainly driven by good performance in India and in China.

Understood. Then UK here, also very positive jump.

It's nice to see that it's now positive territory. Do you see sort of a general market stabilization in UK from here, or was it something special impacting UK in this quarter, or is it only, yeah, market share gains there as well?

No, the market remains cautious, I would say, in UK. Timco that operate in construction is facing a tough market condition out there still, no improvements whatsoever.

What we see, some slightly positive effect is the prices on stainless that impacts Apex in a positive way. That gives some impact in a positive way for Apex.

The overall market condition is still tough and quite cautious in the region, no improvements in the quarter.

Understand. The price effect here for organic growth in this quarter, has price effect already started to show, accelerating price effect in this quarter, or is the acceleration in this quarter mainly a reflection of volume, would you say?

Mainly volume.

Okay. Then gross margin, yeah, obviously very strong again and impressive.

It's strong also in all regions, which I understand is a reflection of your, yeah, strategy execution and mix. In Americas specifically, 42.4% gross margin seems very strong here despite tough comparables.

Besides these structural changes, were there any temporary effects impacting the Americas gross margin in this quarter?

No.

That's clear. Then on tariffs, some companies are receiving tariffs refunds from the US now.

Is that something you are expecting as well, or

No, not what we have seen so far. Let's see what will happen, but we have not seen it so far.

Understand. Just one final sort of question, but in segments North and East here, you mentioned some increased personnel costs due to growth initiatives here.

What is that more specifically? Are you having a new contract you are preparing to ramp up, or is that something especially you want to mention?

No, that's mainly linked to bonus accruals, I guess, because of strong development in the quarter.

Anything

else you want to add, Marcus? Yes.

Most of the cost is obviously coming from the people side given that that's the biggest part of the opex in Bufab. It's investments within that area in the last couple of quarters.

Understood. That was all for me.

Thank you very much, and have a great summer.

Thank you.

Thank you.

Thanks everyone for joining this call. I wish you all a nice day and summer, thanks for joining.

Bye-bye.