Boreo

So good morning my name is Tuomas Kahri and I'm the CEO of Borea since beginning of April this year. Welcome and thank you for joining us today. Today we will walk you through Borea's first quarter results of 2026 and we will put the performance into the context of a serial acquirer business model. Q1 marks a strong start for the year, continuing the positive trajectory we've seen over the past six quarters. We delivered strong, solid growth. We improved our profitability. We had a strong cash generation and we strengthened our balance sheet. So with that, maybe it's a good time to introduce the rest of the team. We are three persons from Boreo in this call this morning. I'm joined today by Rafael Osmanov, who is our Head of M&A and Financing, and our VP of Finance Sami Hanerva. Rafael will dive deeper into our financing situation and our M&A activities, and Sami will cover the business areas. Sami also is the man with the historical background on Boreo, so since Rafael and myself still have a fairly short experience of Boreo. But before we jump into the numbers, just a few words about my background and maybe some first observations from Boreo. I have worked for over 30 years in various businesses with the focus on growth, strategy development, M&A and achieving high operational results. During the past 10 years, I've spent time as a CEO, as a partner at McKinsey & Company, and as an operating partner with the Finnish private equity bailout fund called Interra Partners. The first weeks with Boreo have given me a confidence that Boreo's business model is sound. The company is in a very good shape to continue both organic and inorganic growth, and that is enabled by the efficient capital allocation practices that the company has in place. So a very nice place to start the leadership of the company. Then if we go and look at the quarter one, quarter one, 2026 was very strong quarter operationally. Our net sales increased by 16% versus the comparison period in 25. And they amounted to 39.5 million euros. The organic growth was 9%. This was the sixth consecutive quarter of organic growth. Operational EBIT increased by 28% and was 1.7 million euros, which corresponds to 4.3% margin. The EBIT for the quarter was 0.9 million euros, which was a little bit below 25 comparison period. But it is worth mentioning that in the 25 period, we had a positive non-recurring items of 0.6 million euros. Our cash flow was 2.1 million euros, and the cash conversion was very strong at 116%. Also, our balance sheet strengthened further. The net debt to operational EBTA was 2.2x, which compares to 3.1 in the first quarter of 2025. Our return on capital employed was net 9.1% and the return on trade working capital was 28%, which also increased from the previous year. Then maybe finally a little bit more on the order books. The order books still grew compared to quarter one 2025 and to quarter four compared to quarter four last year. The order growth was driven by improving demand that we saw, especially in our industrial and defense related businesses. We still see that the construction business remains quite subdued, but also there we see some cautious improvement happening. Then if we look at how to continue the positive development this year, there are three key focus areas for the management. The first one being accelerating M&A activities, and those will be now focusing 2026 into our existing businesses. We are continuing to strengthen our cluster thinking, meaning that companies operating in a similar industries would be kind of handled a little bit more like a cluster. And then we invest into the operating companies within those clusters that we feel have the best opportunities to meet our financial targets. The second focus area is to review the role and the status of each operating company. And there we really want to make sure that we understand clearly where do we have the largest potential for both organic and inorganic growth. And how do we then drive the capital allocation decisions that we make as a management. And thirdly, We continue to strengthen our balance sheet to make sure that we can support the M&A and growth activities going forward. So a little bit more in a kind of concrete level, we see that in 26, the earnings improvement potential is supported by kind of a systematic development of organic growth, as well as our development of the operating models. In order to accelerate the organic growth, we will drive the cooperation within the kind of the clusters, where the companies operating with a similar industry will be sharing more and more best practices, especially in the customer interface. Also for the operating model, the big item of course is the five ERP system renewal projects we have ongoing. Out of those, the first one is now completed and the four still ongoing projects are progressing according to the plan. These projects will improve our efficiency and reduce fixed costs in the coming years. And the implementation costs for these ongoing ERP projects have been adjusted in our operational EBIT. Then if we look at our performance against the long-term strategic targets or target setting, the Q1 represents again a clear step forward or to the right direction to meet our strategic targets. Operational EBIT growth was 10%, and that was largely driven by the organic growth. So once the M&A activity grows, this should impact also the growth further. Also, capital efficiency is developing well. However, there we still are behind our strategic target. And finally, deleveraging continues with the senior debt reduced roughly by five million euros year on year. And I will let Rafael in a few minutes to talk more about the financing and our balance sheet. So to continue with some of the key KPIs. So the first one being sales growth. The sales grew by 5.5 million euros or 16% compared to Q1 2025. 9% of that came from organic growth reflecting the improved market demand and 7% is the impact of acquisitions completed in 2025. The two acquisitions that were completed were the SpetsElectrody and Elfa Distrelect operations. And together these two contributed roughly 2.5 million euros to our sales. On the business areas, electronics overall level was stable. milkcon that serves defense related related businesses and also in technical trade we had a strong strong growth and that was especially supported by machinery and putschmeister businesses Then if we go forward to the cross margins, the cross margin level remains stable at 29%. And that is a good achievement taking into account that the sales mix changed quite a lot as you saw from the sales. So the lower margins of the heavy equipment sales were offset by other businesses, both in the technical trade as well as in the electronic spaces. Overall, we see that the sales margin development was healthy during the period. Then on cash flow, cash flow generation, of course, is a core pillar of the serial acquirer model. And we will continue to focus very much on the working capital, as well as, of course, on the return to drive the capital efficiency. Our working capital decreased slightly at the end of quarter one, so roughly by 0.1 million euros, and the cash conversion on the roll building base was 103%. On the main measurement on the capital efficiency, so return on trade working capital, it was at 28%, so roughly stable compared to year on year. And again, as said, we will continue to focus on the working capital, but really we see that the big improvement in this KPI will come from the improved profitability going forward. I will now turn it over to Rafael to review our financing status and then over to Sami for the business area updates.

Okay, thank you Tuomas and hello from my part as well. So at the end of Q1 26 the company stood at a solid financial position uh we had a good level of liquidity available to us at 19 million euros which was roughly 5 million more than year before our total financial facilities were roughly 74 million of which we had used 57 million uh breakdown of this is uh terminal facility is is uh is roughly 18, 19 million euros and acquisition loan facility, 12 million euros of which we still have 4 million euros unused. Then we have our hybrid instruments and RCF facility, which is at the moment currently unused. So we have a good capacity for example, small M&A. Going to debt maturity structure, we amortize our senior loan at 5 million euros annually, and we still have 2.5 million euros to amortize during the rest of the year. In 27, we have a reset date for our hybrid bond. And in 28, our senior debt package expires. So keeping that in mind, we have been mapping different financing alternatives with our priority to strengthen the balance sheet in order to support our M&A and organic growth activities. Our criteria for long-term ownership are unchanged. We want to own asset-light industrial businesses with strong cash flow profiles. So currently we're analyzing the current portfolio to identify organic and inorganic growth opportunities to drive our future capital allocation priorities. One of the focus areas for this year is accelerating M&A activities, and we take a highly disciplined approach, currently focusing on target companies that expand our existing businesses. Currently, we see that the M&A market is favorable for us. We have a good deal flow of potential targets, and we see that there are more sellers than buyers. And because of that, the valuation levels are reasonable. Thank you.

Okay and over to Sami then.