Welcome and good morning, everyone. Welcome to Lagercrantz interim report, our Q2 release here this morning.

Together with me here is Karin as well, our CFO. We will try to go over the presentation as we normally do, with a short introduction, and then after that we will go right into the numbers and present the report.

Then we will also have some highlights at the end and round off with Q&A and questions from you guys. Welcome everyone, and let's get started.

We start with page number 2, just to give you the newcomers a bit of an overview to the group. Lagercrantz is growing gradually.

As you can see, we are a Nordic group or Northern European group with currently some 87, I think it adds up to now, profit centers, growing little by little every quarter, and you can see that we are developing along the way. We have more and more companies in the UK lately.

We have also been growing in Central Europe in terms of the Netherlands, and also in Poland a little bit here lately. You can see where we have our needles over to the right there.

We have in the last year or so surpassed 10 billion in sales and currently at 11.6, we're growing quite in a high pace, and we are currently some 4,000 employees within the group. We are firm believers in the decentralized way of working, with accountability of freedom and running each of these separate units and profit centers and try to keep them as autonomous as possible in their areas and under their own brand name, in their own location, and addressing their specific customers and markets in each of the specific units.

Acquisitions is of course a central part of being a serial acquirer, and we are currently running at 8 to 12 acquisitions per year or so, and it's good to see that we posted some 8 acquisitions here in the first six months, which is, yeah, a little bit higher than, yeah, what we're aiming for and a bit before target. We now are also celebrating here, and did during the quarter as well, celebrating 25 years as a separate company on the Stockholm Stock Exchange.

We were part of the Bergman & Beving group up until August of 2001 and are currently now running on our 25th year, or 26th year really, as a separate company. We have changed the content of the group over many years now, going from more of value-adding distribution and sort of import-related businesses, selling to many of the multinational companies that are buying our components and selling them all over the world, but the customers have been used to be quite of the big ones and do more domestic sales.

Now we are aiming more for proprietary products where they have their own products selling out in the world, and then we're changing the model from being more import-related to being more export-related. You can see where we have our footholds in other parts of the world down to the right here, where we are both operating in North America, but also in China and in India and a couple of other places there you can see.

That's a bit of an overview in the group. We announced our figures here this morning, and it's glad to see that we posted a really good growth for the quarter, and that also translated into good growth in terms of earnings.

We kept our trend here. You can see the trend peaking upwards there, and we're aiming for the 2 billion here, and this was another quarter in that direction, where we're, yeah, aiming for that here within, yeah, we started out some 3.5 or so 4, yeah, 2.5, 3 years maybe ago with the 2 billion, and we're aiming to be there within a year or two from where we are today.

Another strong quarter, and you can see that the trajectory, and we have had many quarters now in a row where we have grown both profits and revenues over time. It's another strong quarter, I think, we posted here today.

Karin, maybe you can elaborate on the numbers a bit here then. First we should go over the business conditions, yeah, that's right.

The business conditions, well, we think that the trends that we've seen earlier on remained during and remained positive during Q2. It is a summer quarter, and in July and August, it was slower, and due to seasonality, but also a bit slower than it used to be.

It picked up again in September, which I think was good to see. We saw that the businesses exposed to electrification, infrastructure, security, and defense, the things we've highlighted before, has to continue to deliver particularly strong growth, while demand in the construction sector, which we have been waiting for to pick up, but it's still a bit slow and a bit sluggish here along the way within that sector.

Of course, the geopolitical situation in the world is of course adding to the uncertainty, we are sort of hesitant, I think, in many areas. We see customers being hesitant to where things are going as things evolve in different parts of the world, with effect in freight prices, effect in raw material prices, but also affecting sort of the willingness to invest among customers.

We've seen some strong growth in some areas, it is picking up from along the way here. As I highlighted, we saw a bit of a softening during the July and August, but it strengthened again towards the end of the period, September then, or yeah, along the fall here.

Gross margins remain stable, but signs of cost inflation was also something that we saw. We saw that, yeah, was driven by higher raw material prices and freight prices that we've seen.

We are working deliberately now with also compensating through price increases to customers in many of our companies. It's a theme that we're running as we normally do, but maybe more fiercely, intensely at the moment.

You can also see down to the bottom here, we see that we are gradually becoming more and more international. You can see that from the net revenues by geographical market down to the right there.

We are growing in Sweden as well, but as a percentage of the total group, we're growing faster in other markets. Especially one that has really growing faster is the United Kingdom, or UK, currently at some 10%, but also with some additional M&A been done there.

I think that will pick up even further as we move along. I also think that you will see us more and more into Germany and the Netherlands along the way as we grow.

We've also been keen on measuring the proprietary products part of things, and we are aiming for the 85%, which I have maybe on a slide later on, but we are currently at some 80%. I think it was 81%, actually, for the quarter, but on the rolling 12 months, it's 80%.

Those are something that we are aiming for as a strategic aim, because we see better growth and better margins within proprietary products than in the rest of the categories. That's a bit around the business conditions.

Karin, then it's your turn then. Yeah.

Yes. Thank you, Jörgen.

As Jörgen mentioned earlier, we deliver another really strong quarter. As you can see here, our revenue grew by 22%, with an organic growth accelerating to 12%.

You can compare that to last quarter when we ended up with 6%. Acquisitions contributed with 9%, and currency effects only added up to 1.

Our EBITA increased by 21% to 530, and that resulted in an EBITA margin of 17.8%. Our most important earnings, profit after financial items, rose by 24% to 425 million.

Cash flow in the quarter was somewhat weaker than we anticipated, but remained at a healthy level. Net profit for the quarter amounted to 340.

If we sum up the first six months then, our revenue increased by 20%, and then in the first six months, the acquisition contributed with 11%, while the organic growth amounted to 9%. We had no material impact from currency effect.

EBITA increased by 18% to 1 billion 29 million, compared to 872 last year, and that resulted in an EBITA margin of 17.4%. Our EBIT, profit after financial items, increased by 21% to 830, and the operating cash flow ended up at 549 million.

Return on equity improved to 31%, and the equity ratio strengthened to 32. Our internal performance measure, profit over working capital, is in line with previous year the same quarter and remained at 72%, and our earnings per share increased to 6.45 kronor per share.

Then just finally, during the first six months, we completed 8 acquisitions with a combined annual sales of approximately 660 million SEK. Jörgen will describe more about these later on, but these acquisitions were completed across several divisions and countries, and that strengthens our platform for continued growth.

Yeah. Thank you.

Let's dig down into the different dig into the different divisions and what we're what what we see there. The electrification and Electrify here has had a tremendous good development in the last few quarters, and that continued here during this quarter, with some revenues picking up 22%.

We see some acquisitions part is slightly lower than the average of the group, 4%, but organic then up 18%. Here we see some really good growth in many of the in many of the companies.

EBITA also grew by 19%, and the EBITA margin has been now sustainably about 20% here, at 20.7% for the quarter, but if you look at the last few quarters, you can see that it's been about 20%, and that's where we would like to have the full group. Now we have really established Electrify at on that level.

We we see some favorable market conditions in within this area. A lot of the green transition is happening, a lot of investments are being made in electricity grid, we are doing the green transition also in terms of wind turbine deployments and and and there where where we have our customers.

We also see some good growth within the within the infrastructure segment, which is also part of this. We saw some particularly good performance within Elpress, which is the the the really big contributor and and in and size-wise in in in the in the group, and that continued here and strengthened during the quarter as well.

Elpress is doing really well at the moment. El-Fak is is the our Danish operation, and with with also some within the wind turbine segment, doing really well at the moment as well.

Tico-Flex, Vipp-Metal, and Elkapsling are a couple of other companies that are also doing well very well building not only electricity grid, but also fiber grid and all types of other things as well within that area, within electrification and and infrastructure. It's also good to see that Michael Smith Switchgear, that we acquired here in the beginning of the year, posted a strong first half year as part of the group.

That was the entry of Electrify into the UK market, and and that turned out really well for us or for them. The Control division then, on the second one, here revenues also was up really nicely with 29%, acquisitions part of that was 12%, and organically 16%, also very good organic growth here within the Control division.

The the EBITA was slightly lower, but that also resulted in some due to some non-recurring restructuring costs that we are. We have some construction-related smaller businesses that we are addressing at the moment, and that added some extra costs here during the quarter.

If we take out these extraordinary costs, it would probably would have an EBITA margin at the same level as last year or slightly below there, but most of the difference is actually due to these non-recurring restructuring costs. Here is some really some companies that stood out is the CP Cases, then Enkodan, Radonova, Direktronik, and Stegfab.

Some of them are doing it really well, but they're smaller, they don't add that much to the to the to the division. Especially CP Cases and Enkodan are slightly bigger in this part of the year, and and especially the CP Cases both in the UK, but also in their US operation, it performed really well here during the last year and is also part of the the organic contributing very well to the organic growth that we see here.

We saw some continued headwinds in the construction segment that impacted parts of the division. The that that was also we are addressing that along the way here now.

The two acquisitions completed in August, BF1systems and Scandia- [unclear], I'll come back to those, but that that's also good that they're making new acquisitions. Control is the smallest division that we have, and then it's good for them to add on some more businesses to to sort of, yeah, have have a broader base to work from.

That that that I think is really good for the Control division. The recently acquired Heikkon, that we did here early on this year in in this during the spring time, performed very well in line with with the plan during the quarter.

The TecSec division, revenues there were up 37%, and most of that was coming from organic sort of from acquisitions, but organically it was even is still was 13%, and FX 1%, good good organic growth there as well. The EBITA was up 32% to 90 million, and an EBITA margin of 13.4%.

Here you know that we are struggling get the margins to raise again, and we I think we posted a decent quarter, but we still have more to expect from from the TecSec division. Several of the division's security businesses, especially Idaesco in Finland, but also ISG Nordic, delivered strong performance during the quarter.

PCP, the division's largest business, also reported increased sales and earnings across several markets. I think the margins was slightly down, but but in terms of earnings, it was it was up from last year.

That that that is businesses performing posted a good quarter. The market conditions remained weak for the construction-related business businesses, which is Laurids, Door & Joinery, and Principal Doorsets are examples of those, and there we expect more when we see the market pick up again as we go along here.

The recently acquired medtech businesses, I-Holland and Marston in the UK, have both have a strong started to the to the group or to the division, and especially I-Holland, which is a bit more sizable, have been performed really well here during the their first, yeah, nine months, I think it is now they've been with us. It's good to have them with us, a good business that we acquired there in in in the UK.

We move on to the next one, which is Niche Products, a couple of more to go here. Revenues there were up 19%, and and that was mostly acquisition-driven with 11% through acquisitions, and organically 7%.

That is a good number as well, but even though it's below sort of the average of the group of the 12% that we talked about earlier then. The EBITA rose by 43%, they have really and and posted a stronger EBITA margin.

They are have been performing really well and pushed through some a lot of their price increases now in towards their customers, that that was necessary, and they've also had some US exposure that is also picking up and and doing it better along the way. A strong second quarter with solid growth both organically and through acquisitions, and we saw particularly some companies did really well.

Those are part of the organic side, Asept in in in Lund and in North America did really well. Trido with their folding doors in in in Sweden did really well, and Tormek and Waterproof also did really well here during the during the quarter.

Also the more recently acquired companies, Sittab and Inredningsglas and and especially Stalham, did posted a really strong start within Lagercrantz. Welcome to those companies into the group.

We round off with the last last division, which is the International. Their revenues grow by 5%, and and they have not performed an acquisition here in the last 12 months, therefore they the acquisition part was zero, but organically it was up 5%.

A fairly good number where they should be, but we probably would expect more in this part of the the market at the moment. We also saw the EBITA decline slightly.

Here they were up against some really tough comparables that I'll come back to, but the EBITA margin still at a decent level of 17.3%. We saw some stable overall market conditions in in in most of the businesses, but we also had some that that really stood out, which is the Bull, part of the marine cluster working out of Finland.

The DEEPSYS doing it better and better all the time, performing really well, and also the Unitronic with their new business with with some new supply lines adding to that business in in Germany with the Unitronic business. Those stood out in the positive side.

We also had some some other issues here that we we we have posted some good orders within the the road maintenance segment, but but the deliveries was slightly lower than last year, and last year they did really well for us, they also were up some towards some really tough comparables in that business. I'm not worried going forward.

It looks good. Now it's up to for us to have a a a tough winter, which we like in this business.

Also the maritime company that we have, the the Libra in Norway, also posted they were had really a good performance last year, and did well this year, but didn't live up to last year really. Some some ups and downs, a little bit over different companies here.

A lot of detail there, but to give you some flavor on what what what how we see things. I think we'd round off with the outcome by division here.

Here you can see the numbers quarter by quarter, and it's great to see that we have really five really really strong divisions. We are building, we are building by adding companies in the in new sectors, with the medtech sector, for instance, within the within the TecSec division.

We've added the infrastructure segment within Electrify in the last few years, and that's also paying off. The Electrify also growing into new geographical markets.

We we are growing our divisions in different areas. Also the Control acquisition of BF1 was really important for for that for that division, even though they're still the smallest here, but I think that will pick up here as as as we move forward.

We are still working with operating margin of, yeah, it's roughly 18% or so. We are I'll come back to that shortly, but really some five divisions on a healthy level, even though the Niche Products and Electrify are fully at the 20, where the other ones have a little bit more ways to go before we're fully there.

That was, yeah, let's look at that was the the maybe the quarterly figures. Let's let's have some highlights and what we where we would like to go from here.

We we would like to try to we would like to continue building our group in terms of building this very strong portfolio companies, illustrated with this these arrows here representing one each company each. Very sharp, very lethal, very very sort of, yeah, powerful as separate, but also that we can be a good owner of these companies along the way, and and then produce the annual profit growth of 15%, where we over a long period of time, I think the there's a reasonable expectation that we should have an EBIT growth of 15% to 20%, and and one-third of that should probably come organically, while the rest or two-thirds should then should come through currently some 8 to 12 acquisitions per year.

I think we will gradually need to increase to 8 to 12 as we grow, because it should represent some 10% of our sales every every year then, and as the base grows, of course, the number of acquisitions needs to pick up along the way. Currently we're at we're at 8 to 12, and we posted 8 here the first six months, we are ahead of ahead of that goal at the moment.

Return on equity then should and we should do this in a very profitable way. We have the return on equity at over at least 25%.

We will continue then doing this by building our five divisions: the Electrify, Control, TecSec, Niche Products, and International, and I've been over these already. What we have put together here since five years is really a setup where we think that we are addressing areas which we find interesting in terms of that we can build sustainable, good profitability in these in these areas and and good growth.

We are looking for sectors where we see some underlying structural growth by setting it up like this. That was also what we see in in in, yeah, some years down the road as as we have had this now for some 4, 5 years, whatever it is, yes, something like that.

We also reiterating our financial targets. That we are aiming for the 20%, and even though we had good growth here, I I expect more of us in terms of EBITA margin as we move forward.

The EBITA margin should the target is 20%, and we plan to deliver that within 2 to 3 years, as we've said, and the profit over working capital should then exceed 60%, which is where we are at the moment as when you read the numbers, you can see that we are already there in that in that target. We have some still ways to go with the EBITA margin here.

I I think I'd like to highlight then instead that, the revenues here grew by 22% in Q2, and it's the it's actually the highest, and the organic growth then of the 12%, which is the brown bar here, actually is the highest organic growth we've had since 21/22. After the pandemic and and we saw some really a part of really good organic growth there for some while, where it where it picked up, the 21/22 and 22/23 was really high.

Then it came down a little bit that we saw the market and the business conditions and the business climate, especially in the Nordics and Northern Northern Europe, come down a little bit. Now we also had some some quarters there you can see with even negative organic growth, but then it's picked up again, and we've been at 6% here for a couple of quarters, and now we are at 12%.

A really good growth, I think, for the quarter, and and looking back, it's actually one of the best we've had here for a while. A strong strong strong quarter we we closed is is our is our view on it.

Then I think and then we also posted some 13 acquisitions here since since, yeah, the same quarter last year, since so since 1st of July 2025. We're we have also added more than the 10% we're aiming for, that you saw on the previous picture.

It's 1.3 billion here in terms of annual business volume, which some really good companies have that have been doing really well for us. The Poclain Véhicules is is doing really well for us.

The season starts now for for next year and the winter. The I-Holland was a really really important one for the TecSec, also moving into the medtech sector, and that was also then followed up by the Marston acquisition.

I also would like to highlight the BF1systems in the Control division. Let's let's look at that one.

That's on the next slide, I think. The BF1systems is the more most recent one we did here in was it August?

Which is which is a company having sensors for pressure and temperature, force, position, and speed, especially for the motor motorsport industry. There's having good volumes going into different parts of the motorsport segment, which is Formula 1 and other categories, but also other areas with these sensors.

They've been performing really well for some years. You can see down to the right there with some also very good EBITA margins along the way.

A bit of a sizable company, especially for the Control division, this will be an important part for important holding for for for the Control division. That is the BF1systems.

I have the other ones as well here, but I think we'll I've already introduced these, maybe we should just round off. We have the other seven that we made here.

Let's round off and open up for questions. This I round off with a financial overview.

You can see here that our long-term trajectory with with some revenues going from 3 billion to almost 12, we have good growth in terms of revenues over some years. You see the EBITA and the EBITA margin picking up, and we are now pushing to get to the 20.

The EBIT EBIT and EBIT growth should be 15%, and we have been delivering that most years. Some years have been more we've been, yeah, due to different reasons, we we have not been there every year, but most years we've been there.

The return on equity then should be 25% is our goal, we could see that we have over a long period of time delivered on that. Earnings per share has been growing quite nice nicely as well, and currently we have some earnings per share growth of 21% here for the rolling 12 months compared to last year.

It was actually even higher here for the quarter, but I think the 15% to 20% and and pushing that a little bit is is on a really good level. With that, I think we'll round off and open up for questions.

Good day, Jörgen and Karin. Thanks for taking our questions.

Starting off with the organic development, which you highlighted quite strong, while you've also highlighted that there are some delays in Electrify, I think it was Mastsystem, and then you mentioned that there were delays in International, which I assume is the winter road maintenance companies. Is it possible to give some sort of flavor or quantify the impact, and secondly, if the deliveries could be postponed again in these companies?

There needs to be an individual answer to that. I think the Mastsystem have a project-related business that when they have big deliveries, which will happen every other quarter or so, that then it will stand out as a really strong number for them.

What we have tried to highlight here is that for this quarter, it was more of a normal quarter for them. They have things to look forward to, and they're doing a good job in bringing in new orders, but the quarter here was not any huge projects being delivered.

Even though we also highlighted that the outcome was slightly better than last year, still, but it was not the big chunky delivery that we've seen in a couple of other quarters going back. I think the other companies, we have some project-related businesses.

I think the beauty of Lagercrantz is that, we have these in different parts of the group, and they balance out a little bit. We had a couple of bigger ones being delivered within the Niche Products division, while in other divisions, it actually balances out over time.

Clear, thank you. Regarding Control with the very strong growth, is there anything that needs to be highlighted there in terms of one-off orders or similar?

I don't think it's one-off orders really. I think most of it is actually coming from good growth, good underlying growth, especially within the military sector and especially the CP Cases, that business.

That part of the business is growing very nicely, and we also see some good pickup in Enkodan in Denmark. In Enkodan, it might be a bit project-related, but most of it is actually more of a new level for them.

Mhm. Just very lastly for me, in Control, these restructuring costs that you've taken, do you think you are done with them, or should we expect them ahead as well?

In our ambition to push for the 20%, we're also addressing some of the low-performing companies within the group, and we have a couple in the Control division, we have a couple in the TecSec division, and a couple of other places as well. There are three, four companies that we are pushing quite hard at the moment, and that might lead to some restructuring costs in those areas also in the coming quarters.

We've had that for a couple of quarters now, and I think we will probably have it for another quarter or two before we're fully through that.

Clear. Thanks for taking my questions.

I'll get back in line. Mhm.

Yes, hello. I'd also just like to follow up on the organic and just trying to figure out how replicable the strong figure is in this quarter.

In general, it seems that the growth is fairly broad-based, but is there any division you would flag where growth was perhaps driven largely by one or a few companies, and if that is then sort of replicable going forward?

Now, I think the simple answer is that is fairly broad-based, but in a group of companies like we have, there will always be companies that are standing out a little bit. I think we try to highlight who those were this quarter.

It's not like we have a big one-off that has been delivered this quarter, actually it has been a good market, and the companies have picked up, and the organic growth has been better. Not to say that it's sustainable at that level, we'll see.

It depends on how the market evolves over time here. It's not like we have a big project-related order that really pushes.

You can see that when you look at the organic growth by division, you could see that it's higher than the average in three of them, and that also illustrates a bit that it's more broad-based.

Understood. Then on those project deliveries, I appreciate you won't give any sort of quarter-by-quarter outlook, but if we just take overall situation now compared to perhaps six months ago and 12 months ago, is the backlog clearly stronger now compared to what it was, I guess, six and 12 months ago?

I think it's picked up a bit, and the lumpiness is there, but it's not like it's one company or two companies. It's more like it's five or 10 companies that actually see a better ordering take.

I think we've illustrated that earlier on with that we see the willingness to invest in bigger projects has come back to some extent, but then we also was a bit afraid that people get hesitant again with the geopolitical uncertainty that it's increasing again. September, it illustrates that we are in a better trend in terms of the underlying market.

That makes sense. Then just on a broader note, you mentioned at some point perhaps having to raise the 8 to 12 acquisitions range that you've given.

You're trending above it for this fiscal year already, but I guess is this something you're already having discussions about doing in the fairly near future, or is this further out?

I don't think we will change the goal this year, I don't think. We have gradually improved.

I think we started by 2 to 5 acquisitions per year, and then it was 6 to 8, and then it was 8 to now it's 8 to 12, right? We have gradually increased ambition.

I think what you should expect from us is really that we try to grow at least 10% through M&A of our sales every year. Since we are looking for these smaller transactions, then the number also increases, but it's the 10% that I think you should measuring us on.

Okay. Then a final one, just a housekeeping question.

In Control, you mentioned non-recurring structuring costs. Maybe I missed it, but did you mention a number on that?

No, we didn't. I just illustrated that most of the margin decline is due to the non-recurring.

Yeah. Understood.

Most. In that case, that's all for me, thank you.

Mhm. Thank you.

Yeah. Thank you everyone for listening in, posting another really strong quarter, and good to see the good wording it's been out there in the market around it, and we believe it is a strong quarter.

We are in a good growth path, and we plan to continue going forward. Good that you're listening in.

If you have any additional questions, we're available here to take your call, give us a ring and we will try to answer you any further questions you might have. Thank you everyone for listening in, and have a good day.