Alimak Group AB (publ)

Thank you and welcome to this quarter two 2025 call for Alemak Group then. And as always, I have Sylvain with me here. So turning page and a short recap of the group. Global industrial company focusing on vertical access and working at height solutions. Around 3000 employees, truly global business. We are supported by some fundamental global trends for our business, urbanization, more happening at height to land these gears health and safety it's of course a very important factor but also i would highlight automation robotization as our machinery makes are movable and makes you know a possibility for for these new technologies to operate from our systems We do have a leading market position in our niches, which gives us a strong position. We have existed for a long time, so our global footprint and a large installed base, which is also a fundamental piece for our service business. And overall, a solid balance sheet, good cash conversion and financial position to invest. Turning page, new heights strategy, something we launched then back in 2020. It's a simple but also powerful strategy that has served us very well with a decentralized divisional structure where all the result and the business is happening with simple and to the point strategy and strategic drivers. and that program was now first part was up to 25 and we are now working on the next step up to 2030 and we are then planning to have a capital market day on november 25th where we will talk more about that route to 2030. Turning page and our financial and sustainability targets, as you have seen with us, and we are en route to deliver on these. Turning page into Q2. And yeah, after a strong Q1, we are again delivering strong performance and continued margin improvements in Q2. So we are off, I would say, to a very good start of the year, the first half. order intake was down four percent in reported figures but still an increase of four percent in constant currencies and the revenue were down one percent but an increase of seven percent at constant currencies so here we have a eight percent negative currency impact We continue to see increased earnings and margins. So we reached an EBITDA, adjusted EBITDA margin of 18% in the quarter up from 17. And also here we saw a huge currency impact of 7% in the quarter. And if you look year to date, order intake is now 10% organic. And we report a 17.7% EBITDA adjusted margin for the first half year. So a strong start to the year. We signed after the end of the quarter, July 8, an agreement to acquire Century Elevators, permanent industrial elevator business in the US. It's a business with a turnover close to 100 million SEK and the margins in the vicinity of the group margins. and this is something that will strengthen and be part of our industrial division in in the group and they have a position then and business in us and canada we also delivered cash flow improvements in the quarter and we are now a leverage ratio of 174 down from the 229 a year back Turning page a little bit more details in the quarter order intake was 1,720,000,000 SEC down 4% and 4% up in constant currency. We saw strong performance in industrial and facade excess while we had a decrease in construction, wind and HSPS divisions. Revenue was 1,791,000,000 SEK in the quarter, down 1% or up 7% in constant currencies. And we saw positive contribution from industrial and facade excess. And also here, if you take the currency into account, it's a negative impact of 134,000,000 SEK. So it would have been 1.925 if currencies of last year. EBITDA at 322 million SEK up from the 307, giving a margin then of 18% up from the 17. And important to note also, this is the first time ever that the group is touching the 18% mark, which of course we are happy with. And it's supported by improved margins in industrial wind and facade access. And also here with the currency impact, that's 23 million SEK in the quarter, so else it would have been 345 Turning page, service, the order intake was down in the quarter 10% or 2% at constant currencies and 661 million SEC versus 733 last year. And it's industrial and construction division that's reporting a little bit lower order intake, but nothing more to take into that, that it's timing effects. And it's, of course, something that we continue to drive and focus on equally as before. Revenue was up 5% and 12% at constant rates to 694 million SEK up from 660. And especially strong performance in the wind division. Turning page into facade access. Order intake was 451 million SEK in the quarter, up 24% or 35% at constant currency. So good order intake, but also towards a little bit lower comparable. We saw strong North America order intake, especially on the infrastructure side, nuclear energy, we took orders, and also on the service side with refurbishment, retrofit and replacements, giving us nice orders while the main BMU market, building maintenance unit market, is still soft in North America. Europe also contributed positively in the quarter. Revenue was 500 million SEK, up 1% or up 9% at concentrates, and we saw organic growth in all regions. EBITDA at 56 million SEC up from 50 giving a margin then of 11.2 versus 10 and the expansion is due to what we have been doing for a long time pricing project execution but also still then negatively impacted by a low factory utilization due to again the soft BMU market, but also soft margins because of losses on some legacy projects that are in the final stage. And as we have said, these are expected to be finished more or less by the end of the year. Turning page and a little bit more on the business update. We are having an organizational change. So Philip Gautinot, who has been then head of Facade Access Division, he has decided to leave the group. And first of all, I would like to thank Philip. He has been instrumental in, he was the CEO of Traktelen and he has been instrumental in in integrating Tractel into the group and starting off a very good solid strategy and execution into FacadeXS. So that's why we see these great improvements. And I wish him all the best for his new role that he's picking up. And we have then Hervé Ross, which is currently head of Facade Access Division in North America, that will then take on the role as the new EVP for Facade Access. And of course, I'm very, very happy that we have internal candidates and Hervé is not only an internal candidate, a very strong and perfect person for this role. We are also focusing on, of course, the margin uplift. The division is still not delivering the margins that we are sure should be there. uh and due to that also the bmu market is remaining to be soft we have decided to take out some more fixed costs so we are launching a restructuring program focusing on europe and and where we also will see planned or we plan to do capacity reduction in our factory in spain and the restructuring cost is 60 million sec with an expected annual saving of 30 million sec as of next year And this one, of course, will be recognized in the second half of 2025. I also would like to highlight that if we look into a little bit more the geographies of this business in North America, where both Alimak and Tractel had a very strong base from before, we see a very successful development. You know, we are driving new initiatives and the business is developing extremely well. And we also have margins into that business, which is well above group average. While in Europe and Asia, Pacific, Middle East, Africa, it's still where we have way too low margins and where we now put extra effort, of course, to ensure we can lift. But this also means that we have comfort in that we will lift the margins to levels which is respectful for this group. Turning page and into construction order intake was 327 million SEC down 28% or 21% at constant rates. And it's basically affected by volatility in demand between quarters and regions, but also the fact of course, that the construction market still remains soft globally. So it's a fight day by day to win orders and be close to customers and make things happen. But overall, I think we are doing well. We saw weaker order intake on the rental side in Germany, Benelux and Australia, and also on the used business somewhat in US, but driven by also high comparables. Order intake for mass climbing work platforms was good, and that's also where we have a very strong commercial focus and will have a lot of expectancy for the future. Revenue was 407 million SEK, down 4% or up 3% in constant rates. And we saw stronger revenues for mass-climbing work platforms in Australia and Europe, but somewhat lower revenues in hoist and rental in North America due to some project delays. EBITA, 68 million SEK, down from 71, giving a margin of 16.7, up from 16.6. uh yeah and it's driven by the revenue but also happy to see that we deliver a small margin uptick and a decent margin level in these difficult times for the construction business Turning page. So we continue to invest in people, product development and operational efficiency. And I think this is important to note. We are employed, even though this market is challenging, you know, we employ more people from and we have employed salespeople, we employ business development people. So we continue to drive very aggressively. We invest in product development and in our product range. And we also drive operational efficiency everywhere, taking out costs where that could be done. And this is all the things that contribute to us holding up this business in challenging times we launched a new scan climber mass climbing work platform in the quarter a small very neat machine that can take two and a half tons very cost-effective design and something that can go for the global market and we have also invested significantly in france we have upgraded our rental facility in in france north of Paris and of course taking into all sustainability standards of today we have developed a new training center there for our customers and our own people and it is because you know we believe in France we have a strong presence in France and we want to continue to grow there Turning page, HSPS, a bit softer quarter, but again, due to challenging market conditions, order intake was 316 million SEK in the quarter, down 10% or 4% at constant rates. But also important to note, we are still 4% up year to date, first half. Lower order intake was due to some slow construction sector, but also primarily in Central and Southern Europe. but also offset by good things you know we continue to focus very heavily on our elevator segment it's a very important segment for us and we are close to our customers and we take market share in that in that business revenue was 321 million sec down nine percent or down three percent at constant rates and following the same trend and as as order intake due to the closeness of book to bill EBITDA at 55 million SEC down from 69, giving a margin of 17.2 versus 19.5, and this is then driven by the somewhat lower revenue, but still also relatively resilient, I would say. turning page business update so here we also focus on investing and driving things forward you know we have new management in in this division so we are we are focusing even more now on on product development driving of operational and organizational efficiency and and changing somewhat, but also we continue to drive our specific focus into verticals, customer segments. So, and I will, as I was alluding to on the previous page, elevator segment, it's important to us and we take share. We focus on all parts of the world now. And we also drive really our focus on confined space. Some nice success stories working with our end customers. We have fault protection systems installed on transformers in Germany and Poland. And we also got a nice business with retrofit of height safety systems for high voltage transmission infrastructure in Germany. Turning page, industrial and very happy to see, you know, we continue to develop very, very strongly with this business. Order intake was 481 million sec at 9%, 16% up at constant rates. And actually it's 22% up year to date organic. Very strong. We see strong performance primarily on new equipment orders within oil and gas, but also government and public and multiple heavy industry segments. The aftermarket business was, as I already was alluding to, a little bit down in the quarter, but it's due to lower refurbishment and timing of orders. Revenue was 399 million SEK, up 10% or 17% at constant rates. And yeah, it's driven by higher equipment deliveries, but also good aftermarket performance in the quarter. EBITDA, 105 million SEK, up from 82, giving a very strong margin of 26.3, up from 22.7. Also considering that we are continuing to invest in sales resources and product development and services. So, you know, still on the move forward and upward. Turning Pages, we acquired, as I was saying, you know, the or signed an agreement to acquire the industrial part of Century Elevator on July 8th. turnover of 9.7 million us dollar 100 million sec and they are operating then close to our group margin they will give us a strengthened position in us and canada and it gives us an access to a complementary cost-efficient elevator design because this business there has been exclusive distributor or pega czech brand elevators in the us and canada and this is something that we will continue um in addition they also of course did service around 20 of the business was service so we see a very nice opportunity to of course also grow service with this business and we get along you know with the business a nice set of very high talented and skilled service people so of course we will continue to grow grow that piece and then we see also of course some some overhead cost synergies Another positive thing, we bought this from brand Safeway, which is one of our biggest customers in North America. They are on the rental side, so on the construction side. And we have agreed also that we will work even closer together going forward. So I think also that's something I'm very happy to see. Turning page and wind order intake was 158 million SEC down 22% or down 15% at constant rates, but also here, I think it's important to note timing effects, etc. It's still up 4% year to date. But it was negatively affected by the US tariff uncertainties that we have been seeing. You all have, I'm sure, you know, picked up on what's happening in the US. And so far, this tariff uncertainties in Q1 affected the willingness to decide on new investments. We also had somewhat high comparable year over year with China. Revenue was 179 million SEK, down 8% or down 2% in concentrates. And the service, training, safety offerings partly offset somewhat lower equipment sales than in America and Southern Europe. EBITDA at 38 million SEK, slightly down then from 39, but the record margin for the wind business of 21.4%, up from 19.8. And a good share of the market. and also that we have been able to mitigate the tariff effect. So that's something we are of course very happy with. Turning page, we continue to see growing opportunities in the wind market. We take share and we work very close with the Chinese OEMs and we expand with those. India is becoming a more important market and there we also take very nice orders and we see that this is a market we need to be very close to going forward. And then, of course, continue to invest and drive our aftermarket business. And in the quarter, we were also rewarded for our innovation. So we received this EOLO Innovation Award for a patented service lift concept that we have developed. To say a little bit more about the US and the wind market, we have now also, as you know, gotten this big, beautiful bill. which will take away tax incentives for the renewable energy in the US in the coming years. But it's still valid for all projects that start up this year, it's said, and to be finished by 2030. so what we see is that and when we talk with our customers is that the market looks to be very stable and solid for us at least in the next couple of years 26 27 so we really have no worries about the u.s market neither in the next coming two years and then we are turning page and into the profit and loss summary and then i hand over to sylvia

Thank you, Ole. Good morning, everybody. Once again, we are pleased to see an adjusted EBITDA going by more than revenue. It's almost becoming a habit. It's a 5% growth for adjusted EBITDA versus an almost flat revenue. And this comment applies to both the quarter due to 2025 and the first semester versus same period last year. And we trust this is a testimony to the strength of our business model and the continuous improvements in operational efficiency. And I'll give some more color on that on the next slide. There were no items affecting comparability in the quarter. Below EBITDA, the amortization charge is consistent with Q1 2025 and our expectations. It's coming down versus Q2 2024 as a result of Tractel related intangible assets now being fully amortized. FinanceNet is done as well due to the reduced debt and lower interest rates. That's in line with our expectations, which is around 40 million per quarter this year. Taxation rate in the quarter is up versus Q2 2024. That's really a factor of the evolution in the country mix. But at a level of 25.7%, we are close to the average of 25% we foresee. So higher adjusted EBITDA, no ISE, lower amortization charge lead to a significantly higher EBIT. It's a 16% growth in the quarter. And combined with the lower finance net, despite the slightly higher taxation rate, we grow the net result by 28% in the quarter. Next, please. So I'm now coming to the key EBITDA drivers, gross margin and operating expenses. This has been a strong quarter from a gross margin point of view, with an improvement in all divisions except Facade Access, where we saw a small degradation. It's interesting to see that we have managed to fully mitigate the adverse foreign exchange rate developments and the new US tariff. This has implied adjustments to our supply chain, some customer price increases whenever this was needed. And we believe those swift actions have been enabled by our agile, decentralized operating model, which is proving its value in those relatively challenging times. Operating expenses as a percentage of revenue are coming down in the quarters at the second driver to the EBITDA growth. uh and the operating expenses uh you know for all divisions except industrial were either flat or down in the quarter despite some cost inflation such as labor or some voluntary cost increases as mentioned by ule typically product development digital And as we have said in the previous quarter, industrial division has expanded its cost base. That's primarily a factor of a growing sales organization, which is being built to support the sales growth. So overall, as a group, we continue to very actively work on our cost efficiency. We reduce the costs we don't need and we spend wherever we need to fuel our profitable growth strategy. Next, please. So, as I said, the result for the period was up 28%, 184 million SEC versus 143 million SEC in Q2 2024. uh excluding ic the net result was the same 184 but versus 154 in q2 last year this is a 19 increase The EPS was up by the same percentage, 28%, so 1.74 versus 1.35 with the same number of shares. Adjusted for ISE and acquisition-related amortization, EPS was 1.98 SEC in the quarter versus 1.78 last year. This is an 11% increase. So moving to operating cash flows, we continue to focus highly on cash generation and that allow us to keep holding 12 months cash flow on a good level, as you can see on the right hand side graph. We have increased cash flow from our operation in the quarter versus Q2 last year. So it's 182 versus 164. Although we have increased working capital in the quarter due to the effects of contract phasing in Facet Access Division, primarily. And we believe those effects will be reversed mostly in the second part of this year. So overall, not a bad quarter. Although we think we can do better and then we'll continue to drive those improvements in the future. So net debt in the quarter was slightly up 2.6 billion SEC versus 2.4 at the end of Q1 2025. The increase is due to the dividend payment around 300 million SEC in the quarter and the revaluation of the euro loan and those negative effects were partially compensated by, of course, the positive operating cash flows. The leverage is 1.74 at the end of the quarter. This is slightly up versus Q1 2025, but still well in line with our financial target of being below 2.5. And our focus on cash generation will contribute to future deleveraging. Our capital allocation priorities remain unchanged. We will continue to invest in organic growth. I mentioned several examples of expenses related to that. As we have said for some time, we have the financial muscle to make acquisitions. We are very pleased we have signed and soon closed the century acquisition and we continue to work actively on future acquisitions. And of course, we are committed to delivering dividends according to the policy, which is 40 to 60% of our net earnings. So of course, it's a board proposal in the end and AGM decision. And finally, regarding Rossi, we are pleased to see another sequential increase. This is an important metric for us. We are not 26.8% excluding goodwill, 11% including goodwill. That consistent increase over time is driven by the improvement in profitability and of course the underlying recurring improvement in performance. On that, I'm pleased to pass the baton again to Ole.

Thank you, Sylvain. And yeah, we turn page to the summary. So a strong quarter, I would say, and a strong start to the year, the first half. We continue to deliver on the new heights program, which serves us well then, as you have seen, with the 4% order intake growth and 7% revenue growth in constant currencies in the quarter. But also, as I was saying, you know, on the year to date base, we have a 10% order intake growth organic and we are at 17.7% adjusted EBITDA after the first half year. We continue to take actions to improve profitability and take out cost or structure we don't need. So that you also see now in FacadeXS we do something more. uh and we also do have this solid financial position that we are uh talking about you know so which allowed us to make this nice acquisition uh which is then due to close end of the month so should be part of the group from first of july sorry from first of august then this also financial position allows to continue to drive this so so uh you know we are uh uh working on our acquisition funnel and and i think we will see a good activity also on this going forward and we continue to invest in all divisions to drive profitable growth i think also what's nice to see when you look into the divisional result and as a group we do very well we continue to lift but you also see that it's a potential in all divisions to also absolutely do do more and we are working also of course on the future as i was saying so on november 25th we are planning to have a capital market day where we will give more details about that so with that i would like to thank you and we move over to q and a