Thank you. Good morning, everybody.

Welcome to this quarter 1 call. It's me, Staffan Dahlström, CEO, and Joakim Nideborn, calling you from a crispy and sunny spring day in Halmstad.

I think also this report is quite crispy and sunny, and we're very pleased to present three sections: business update, I'll do that, and then Joakim dive into the numbers, and we end up with a Q&A. If we look on the quarter 1 here, we are very pleased to see a fairly good momentum.

We have good organic growth on sales, up 15%, a little bit of headwind on the weak Swedish currency at the moment. Joakim will talk more about that.

Also order intake is organically growing double-digit. This combination of double-digit growth on both net sales and order intake is we're really pleased to see that.

We feel that the market is fairly strong, and it's a broad, good market, we feel. We're also happy to see that we are improving our profits on EBITDA level that we follow from year from this year.

EBITDA margin 27.2, better than we expected. I think we're seeing a stable development on gross margin.

We have kept OPEX on a flat level. Of course, this gives a good EBITDA margin when we have good net sales growth.

Cash flow continue to be strong, and this gives us adjusted EPS, earnings per share, at 3.78. If you look on the last 12-month, I think it's only one thing I would like to highlight, and that is the cash flow from operations where we almost make a billion Swedish in a year.

We're very happy to have this, and Joakim will talk more about our debt and how we see the covenants and things like this. As I said, market is fairly strong.

North America, after a dip end of last year, we said that was temporary. It was strong development.

We also see that China, that's a smaller market for us, but growing well. In China, we also saw some boost effect where we felt that some Chinese customers there were concerned about lead times.

Otherwise, we see a balance between order intake and invoicing to a large extent. Also Europe, that's been quite slow, and Japan continue to slowly improve, positive signs.

It's broad and positive. 1 billion Swedish in order intake make us proud.

Of course, we're worried about the situation in Middle East. For us, this have not a direct impact to a large extent.

It's mainly our business in building automation where we have a fairly decent business in Middle East and Saudi and Dubai. There's a lot of real estate products there.

There we've seen a drop in order intake in March, but all in all, I think Middle East is less than 2% of our revenue. Of course, we are worried, and we follow this.

It seems like our industrial customers and industrial markets are almost getting used to this kind of turbulence and changes, and they keep on investing, and we see a fairly stable market. We continue to invest in product development, part of our new strategy in all our divisions.

We see this on a little bit higher R&D expenses. We also work a lot with different pilot projects and use more AI, but we are not implementing AI on full scale in our operation yet.

We are more in the exploration and test phase where we test and try with our engineers. The ambition here is to be able to do more with the current resource we're having.

We're also very happy to see that the asset acquisition we did from Molex industrial communication from 1st of January got a very good start. We integrate this business with their two development centers in Canada and France very well.

We also integrate the supply chain. The customers have welcomed this, been very positive.

Some customers also placed orders for the entire 2026, this is also a little bit boost on the order intake. This was not a big acquisition, but it's very positive to see the smooth integration and how positive this has been.

Just as a reminder, on the next slide, this was a fairly small acquisition. We got this from Molex, and from their point of view, this was too small and too strange for their large sales organization, and we did not pay a big amount for this.

We said that we hope this will add more than $10 million US dollar annual revenue. Quarter 1, I think the order intake was 140 million Swedish, yeah, we are It's true.

It is more than $10 million US annually. I think this is better than we expected.

All in all, this is a good addition to our INT division where we feel that their product complements our technologies in our products, and it's very positive with a positive customer feedback that we have a lot of common customers, and they feel that, okay, now when HMS takes over, we are ready to invest in this technology and commit to it. All in all, a very positive asset acquisition.

With that, Joakim, some numbers.

Yes, some numbers, and I'm going to start with the order intake, as we normally do, which you saw was very pleasing. We did just about 1.1 billion Swedish crowns in order intake, a 19% growth, or 10% organic growth.

You see we also have 10% organic growth for the last 12 months. Staffan touched upon it already.

One very big contributing factor to the strong order intake was the Molex acquisition and the fact that we got many of these full-year orders. We we're very pleased with the underlying business as well, and in that number of 1.1 billion, we do think we have around 130 million where customers have been placing orders that they normally would maybe do throughout the year, but now placing everything in Q1.

Underlying, we can see it's really all divisions and all geographic markets that are doing doing well. We see a broad-based, strong demand.

With everything happening in the world, we we're quite quite happy to see that the the customers still investing and placing orders. Maybe what sticks out the most for us is the INT division.

I'll come back to that with a organic growth of 25%. We've been talking about this for maybe some 12, 18 months that we thought we would see this pick up, and and now we're maybe a bit later than what we believed, and now we're seeing that business coming back on a really broad base also now in Q1.

If we move over to the sales side, we we're also continuing the growth, and you see on the graph there, it's a nice continued development. A 971 million, and a 9% growth, which is actually organically 15%.

Now is the second quarter where we have double-digit organic growth. If you've been following us, you've been seeing that we had a more challenging situation through throughout 2024 and first half of '25, and now we feel that we're back on the right track with all the inventory levels have been normalizing out in the in the supply chains.

Also very good to note that we we do have a book-to-bill of 1.16. We've been saying that we we believe we should have more than 1 this year to to continue the growth journey and to to to place the the foundation for future growth.

That's 1.16 is a very good number, especially when we we show this six this 15% organic growth on sales. What's behind, also here it's it's quite broad-based.

We see our four largest markets are among the ones that are performing the best. In in order of size, we have the US, the biggest market, Germany, Japan, and China, all of them are contributing very well to to this development.

Then going into the divisions, we're starting with Industrial Data Solutions, the largest one, and now 40% of the group group profits. Here you see on the on the order intake that we report a -3% in development, actually organically that's +5 due to the massive currency effects from Q1 2025 until now.

As you might remember, after Q1, I think it was in in April, the especially the US dollar took a big hit versus the Swedish crown, and that is is a big impact on the bridge, of course, when you compare quarter to quarter. Net sales, a good number.

The the Q4 number for 2025 was exceptionally strong, the 481, now 418 as we do in the quarter for us is is not bad, a 13% organic growth, and I think this also comes down to to good margins of 25.4%. We've been able to build this the margin in this division quite well from around 20% to 25% if you take a 18-month period.

Here the the North America is the biggest market. That's also what is performing the best.

It's a little bit slower for us in in IDS in Europe and APAC, still okay. To mention one big driver, we we've been seeing the the data center vertical performing very well, winning new business in in various applications for for the data center business.

Just to mention also, in we are meeting on the order side a very tough comp in in Q1 2025. Both in Q4 '24 and Q5 21 Sorry, Q1 '25, we had some big project orders that we did not really have now in in the beginning of of 2026.

We see a strong underlying development. Then over to Industrial Network Technology, a a fantastic quarter with a a 25% organic growth in orders and 23% growth on on net sales.

Here you also see on the green bar in the left-hand left-hand side graph, the that Molex business coming in with 140 million. The reported growth is now 73%, a very strong add-on to the business.

Of course, this order intake pace is not sustainable. I think Staffan said it, that is basically our customers placing orders for the full year.

I think what you can expect is maybe more the pace that you see on the sales around the 40 million on a quarterly quarterly level. As Staffan also mentioned, this has been turning out a bit better than we expected.

We didn't know exactly what to expect given that it was some older products and some customers that had been announced with end of life, and it seems like the business is still going very strong here. Integration is going well, and we see difficult to pick a lot of markets that are performing good or bad.

We see that very key markets in in Central Europe and Japan is is driving, that is those are really big markets for INT, so that's that's very good to see that we are back to see good growth in those key markets. Then finally, new industries, also solid quarter for new industries.

We have a 7% organic growth on orders and 8% on on net sales, pretty much in line with our financial long-term targets, and also good profitabili- profitability with over 27% EBITDA margin. Here we saw a good development in the vehicle communication business, both in Europe and North America.

On the on the building automation business, we had a good start. The first two months were quite good, and then in March, we saw a massive slowdown in orders from from the Middle East, which has been impacting the numbers a little bit.

Again, for the group, this is not a big impact. It's less than 2% in Middle East of the total sales.

For building automation, it's 20 20% of the of the business, so that is with a big slowdown, that is, of course, visible for for that part of the business. Then going over to the results, and first, I just want to make you aware that we are now reporting a new main profitability metric, EBITDA, which was 264 million and a 27% margin.

This is our long-term operating targets for profitability, and this is where we have the 25% target to to reach 25% of EBITDA. The difference compared to before when we showed adjusted EBIT is actually a bit more difficult for us as a company to live up to.

It's the same in the fact that we are taking away the excess values, the amortization of the excess values, but we're not making any other adjustments, all the integration costs, M&A costs, and this is actually burdening the the EBITDA results. Also, amortization of of activated R&D cost is impacting the the number.

I hope that that was was clear, how that works. Otherwise, you have to ask.

What we can see then, 264 million, 27% margin, very strong start of the year for us, and and good to see that we are above the the financial target. It's really strong top line and cost controlling that is behind the the number, nothing strange.

Looking at the gross margin, we were slightly down compared to to last year, a big negative effect from currency, and also I would say it's it's a good good product mix with in the divisions, but the fact that INT is growing a lot and taking a bigger share of the whole is reducing the the group margin a little bit. I think we've been talking about this before that when if and when INT starts to to come back to good old form, that will put a bit of a pressure on the on the margin.

On the other side, we have been rather successful with the price increases, and also the volume, of course, is good in the quarter, which is mitigating. All in all, with the mix that we have, we're we're quite happy to to be able to present 62.4.

On the OPEX side, we we came in a little bit short of what we believed we would do, and it's we're a little bit behind on some of the plans. We are investing in some certain areas of the business, both in in R&D, also adding a team in in artificial intelligence to drive that development within the in the group, and it's a little bit behind the schedule, but we will be there and and recoup.

Then we also have salary increases coming in Q2, looking ahead, we will have a little bit of a higher cost level. Just two more things I want to mention here.

One is the the R&D, where we are, as Staffan also said, we're now investing in in both in INT and IDS in the new generation of products, which is increasing the the pace of of investment in R&D and activation of cost. This increased to 27 million from 15 last Q1, and so 12 million more in in activated R&D, which is, of course, you could say, a little bit helping the results.

On the other hand, you see the the FX effect. We had some really good currency hedges in 2025, which has been wearing off towards the end of the year, and now into 2026, we are we're having we still have hedges, but it's at at lower rates than what we used to have before.

We see a pretty big impact on on EBIT or EBITDA of the 31%, that's sorry, 31 million from from the FX rates. If we move on further down in the profit and loss, we come to the adjusted results, adjusted EPS results, and here we have a 3.78 as adjusted EPS, a pretty solid number.

We're happy to see interest costs coming down from 34 million a year ago to 20 now. It's a combination of, of course, reduced debt, but also better terms in the financing agreement, which is keeping that down a little bit.

If you want to see the reported EPS, we're at 3.24, and and here we are just adjusting for the excess values amortization of the acquisitions. We continue to show a good cash conversion, and cash flow is is solid with 250 million.

Behind that, we're reducing inventories a little bit in in Q1. We're tying up quite a bit more in in in our customers.

Good good invoicing in the end of the quarter. March was a very strong month in invoicing, we tie up some 37 million more in working capital in Q1.

For the year, Staffan mentioned already, 940 million, on good track to that billion mark that we would really like to to reach soon. Then if we look at the the net debt situation, continue to move in the right pattern.

We're reducing a bit more since Q4, and we're now down on net debt/EBITDA, if I look at pre-IFRS 16 basis, of 1.87. Of course, that puts us in a good good spot compared to 3.36 a year ago.

I think we're quite happy with that that reduction, and it also means that we we have we can put some more efforts into the M&A agenda again, and we are building that agenda now in the divisions, and it's going quite well in looking at new targets and building that pipeline. Just to summarize before we hand over for questions, takeaways from the first quarter, what what we would like you to remember is order intake, solid, over 1 billion for the first time for us.

Organic growth in sales, 15%, second quarter in a row with double-digit growth on the net sales side. Then we also would like to be clear with this pre-orders of about 130 million that you can not expect to to come back in in coming quarters.

Then INT, we need to lift out INT, a very strong development here with both over 20% organic growth in both orders and sales and a good start to the new acquisition in INT. The macro situation still uncertain.

We we are happy to see that the underlying market seems to be working well enough anyway. Middle East, even if it's a bit of an impact on on the building, not a lot building automation business, not a lot for the whole whole group.

What we also do see, not sure if we talked about this before, we do see lead time for certain semiconductors coming up again, for instance memories, also some prices been coming up a bit. We are not impacted by the worst latest geometries, but still it's it's a bit of a push upwards in in pricing.

We are trying to now place orders for more or less the full year to to make sure that we have the the material we need to to be able to continue deliver. Then finally, profitability and cash flow quite well, both cash flow, cash conversion good, and the underlying profitability slightly better than our long-term targets, and we are continuing to to invest in business now in R&D, in AI, and we are very happy to see that continued development of the year.

With that, I would like to hand over to operator for for questions.

Yes, good morning, Staffan and Joakim, and congrats to a very strong results here. Three questions from me, if I may.

My first one is related to the increased order placements you saw among Chinese customers here given the disruption in supply chains. Sounds like a pre-buying.

Do you expect a similar pattern in H1 or full 2026 as we saw in the pandemic years in terms of boosted orders or how should we view this?

We start with that? What do you say, Joakim?

I think we list here 130 million on order intake as little bit of boosted, but I think we are much more into a balanced situation. We see some concerns in some Chinese customers due to geopolitical things.

The memory is a bit worrying. It's not that we are using the same memories as the AI market, but it's the same factories, the Microns of the world, I think the fact that they have a full schedule also affect this kind of industrial component that we buy.

We don't really see that this is a big trend, it's mainly related to some customers in China. Of course, this with the Molex acquisition is a one-time effect.

We bought this asset without an order book, and some customers were really happy, they committed to larger time orders. What do you say, Joakim?

Do you see this as a big trend?

No, I think we've been discussing that a lot, Jesper, and I think it's been something we've been also challenging the different business owners in the company how they see this. I think we what we say in the report, we believe that about 130 million was maybe placed a bit early, but otherwise, it's it seems to be a quite solid market, and we've also been seeing other peers reporting strong numbers for the first quarter, it's we're happy to see that the investments seem to continue.

Thanks, very clear. A follow-up then on the memory prices here, how do you work to secure your volumes to deliver to the customers and the risk here, and also on inflationary COGS coming up and potential workarounds to not lower the gross margin here?

Very relevant question. What we've been doing is we've been placing orders for the rest of the year.

We haven't taken all the volume yet. We will probably take volume a bit earlier than what we normally would do.

I think you can maybe expect that we build a little bit of working capital for throughout the year. I would maybe have expected that we could reduce before.

If you asked me half a year ago, I'd probably think that we could reduce working capital throughout the year, and now it's that might be challenging. I think that's pretty much what we can do.

On the pricing side, so far, it seems like we've been covering what we need to cover in the yearly increases. If that view changes, we will, of course, act as we always do to protect the margins.

Thanks, very clear. I jump back in line here.

Thanks, Jesper.

Good morning. Cheers on the EBITDA margin potential.

Of course, we know that costs are not fully ramped up yet, but the organic margin potential looks higher than at least what we picked up at the CMD. What we're seeing that maybe, I don't know, 27% as an organic potential by 2030, you're already at that level.

Yes, what are your thoughts on the organic potential if we would exclude the M&A impact, which we know will probably dilute it?

We don't really We have a target 2030 that includes the M&A impact, and we are talking about most of the M&As we look at will have a dilutive effect on our margins, gross margins and net margins, we look on the combination. Of course, the more organic growth we are able to generate, the better it will be for our margins, I think, because there we have a higher leverage.

Joakim, any comments from you? It's really difficult.

I think we try to be humble. 25% is a pretty good margin in itself, and now we've having three good quarters in a row with slightly higher margins, but we also see that we need to continue to invest to be able to get organic growth.

We think that we don't want to save ourselves to a higher margin and miss out on potential growth. I think it's always a balance, but we think that 25%, maybe some quarters we will be a bit better, but that's pretty much what we're trying to steer against.

Okay. Fair enough.

Also on the gross margin, given your expectations now on the growth in the respective segments with different profiles, balancing this with FX and price hikes, do you see a change in the gross margin profile today versus what you saw at the CMD in September?

Not necessarily. Not a lot, I'd say.

It's been compared to then, I think we've been seeing even weaker US dollar and euro versus the SEK, which is, of course, not great for our margins, but I think maybe that will do a percentage point or so. I think we have some good things going on, we think that we should we don't want to change the long-term target, for sure.

We set a target of 65% to 2030. We will not be there next quarter, but we think that that's still relevant with what we're doing.

Okay. Thank you very much.

Thanks, Victor.

Thank you. First, a question on OPEX.

You talked about ramping costs here and perhaps lagging a bit, but at the same time, it's only up 3% here in Q1 organically, if I understood correctly. Maybe if you could just speak to how steep this increase could be the coming quarters would be helpful.

I think I don't expect it to be super steep, but we're probably going to add a couple of million per quarter. I think you can expect that when we're ramping up.

Normally, Q Q2 and Q4 are a bit more heavy for us in terms of market investments and traveling and different customer events, I think that you can probably expect to add on. It's we will have it's going to be a slowly but safely increasing a few percentage points from where we are today.

That's pretty much what we believe. I think we are in a good place, and we will do some smart investments, but not go crazy.

All right, great. Then on data centers, I think the last time at least that I remember that you mentioned a larger order was in Q4 '24 or something, could you give some more backdrop on how this vertical has developed over the past year?

Because now it seems to have been a good driver.

I think we see this in different projects that we see for INT, they are selling some gateways. We see in building automation, they are connecting the ACs for cooling, and we don't see so much of this switching business for network infrastructure we got for power conversion, Q4 so It's a quite broad mix of automation projects that are related to data center.

As you said before, we are not part of the compute in the centers. It's about incoming power, the cooling and heating, and these kind of things, automation systems around it.

We see broad automation projects with our system integrators in the US that they are involved in this kind of automation projects in data centers.

Okay. Then a final question, if you could just explain more about the improvement you see in Europe.

Is it broad-based or is it specific, any specific driver?

I think we see two different things. On INT, we see a pickup quite broad-based on customers who don't have inventory anymore, and also customers who work towards automotive business and it's not great, but it's not too bad either.

Then we see some verticals where automotive in general is not good, maybe is not getting worse, but other verticals are pretty good, infrastructure and automation in general, electrification. That's starting to see some momentum in Europe, we think.

Okay. Thank you.

That's all for me.

Thanks, Erik.

Hey, guys. Should be ABG, of course.

Congrats again on the strong performance. We have previously been discussing that there have been some discrepancy in recent quarters between the larger and smaller projects, with larger projects being a bit on a pause.

Are you seeing any change on the latter, either in terms of orders now or in terms of customer dialogues? Thanks.

No, I think we're still waiting for some larger orders. I would say we see more of small and mid-sized, broad-based orders, and not too much of these larger projects order that we got end of 2024.

Thank you. Then only one follow-up more, and that is another topic that we spoke about at the CMD, and that was on the potential upgrade cycle for Anybus to meet upcoming security requirements.

Are you seeing that play out?

Very good question. We are doing some initiative in security, and there's a lot of new regulations, and we're trying to get our arms around how to monetize on this, and we have a team working on this with some products.

In general, we see a lot of customers who want to talk about cybersecurity and this, but we can't really see that there's a if you look on our revenue, it's not a big part of our revenue, and we're still trying to find our way in this cybersecurity landscape, I can't really see that we have cracked the code there yet. There's a lot of customer interest, but right now it's more interesting in education and consultant services, and not really a product business yet.

We are still working trying to find our ways there.

Very clear. That's all for me.

Thanks.

Thanks.

Thank you. Good morning.

Just two questions from my side. The first one relates to end market momentum in some of your verticals.

You comment a bit on the data center opportunity, and to your point, it's could be any other industrial building, right? It's not necessarily the servers and racks here.

You also comment a bit about semicon manufacturing. To what extent do you see that as a growth driver?

Oil and gas, are you seeing customers in that or more broader energy and markets become more opportunistic amidst where CapEx investments going there?

If I start, and this is a little speculation. We see that we have customers in semiconductor.

They're highly successful. There seem to be a lot of investments, broad-based, not only AI, but most of all the customers we have is more on the machine side in semiconductor doing all this vacuum things and these kind of things.

That seemed to be very strong momentum. On oil and gas, we are speculating that with the challenges we see now in Middle East, wouldn't that drive more investments in other areas of the world to be in where they have oil, that this would be more investment?

We haven't seen it yet, but we're speculating that there might be a good market opportunities in North America, in other parts of Europe, in other parts of Asia, where the you could explore more of the oil and gas resources they have there to complement the Middle East market. We haven't seen it yet.

We're just speculating about it.

Understood. In terms of exposure in the IDS division, the energy footprint is quite sizeable, right?

Yes, it is. Just to comment that, Joachim, we have US is the North America is the big market, the exposure is mainly related to North American oil and gas.

Absolutely, that's clear. We saw here, of course, with the Molex order activity that yet another acquisition for which you paid fairly low price tags are playing out the way that you hoped for.

Now that we see cash flow through Q4 net debt levels to call it acquisition territory, can you just comment a bit about your appetite and call it self-confidence when it comes to pursue more M&A towards the latter part of the year?

I think we have a pretty good confidence, and I think the reason is probably that we are a bit selective. We want to continue to be selective, and we are looking at a couple of things at the moment, we hope that we're going to be able to get something done this year as well.

We will be as active as we can, run as fast as we can. Now we have three divisions that are all looking into building their pipelines and managing those pipelines.

I think we have a pretty good foundation.

Sounds encouraging. Thank you.

Thanks, Joachim.

Yes, hi again. I just have a follow-up on this 130 million in early orders.

Maybe I missed that, but how much of this was translated into sales in this quarter? Thank you.

Nothing has been translated into sales of that 130. Nothing.

The point is that

it will be

Normally, we would have received those in Q2, Q3, and so on. Nothing.

Okay.

Joakim, the larger part of this 130 is related to this Molex pre-orders, and the other part is related to this Chinese customers, so that's the two things we have there.

Some of the panel meters.

You're right. Okay.

Where we have some longer lead times, yeah.

Perfect. Thank you, guys.

Thanks, Jesper.

Thank you.

Thank you, operator, and thanks, everybody, for joining this call. We are just getting ready for our AGM here in Halmstad, and we are very happy to see a strong quarter, solid quarter.

We feel that the market is fairly stable. It's not great, but it's we feel that things are falling into the right places.

We're very happy to see good progress on the acquired unit from Red Lion, Peak System, and now also this Molex business we acquired from 1st of January. Things are moving in the right direction, but it is an uncertain world out there.

As I said, we are impressed by our customers' robustness and their willingness to continue on their plans despite the geopolitical things and trade things. We are fairly optimistic about the coming quarters.

Stay tuned, and look forward to talk to you next quarter.

Have a great Thursday. Thank you and bye.