Alleima AB (publ)

Hi, everyone, and welcome to the presentation of the first quarter results for Alema. My name is Emily Alm, and I am head of investor relations. I'm joined here in the room today by Göran Björkman, president and CEO, and also by Olof Bengtsson, CFO. Göran and Olof will take you through our results, and we will then have a Q&A session. So you can ask your questions through the conference call, and you can also write them in the field below the webcast. And you can also download the presentation from aleima.com. As always, safety is a top priority for us, and I trust that you are safe now and that you know the safety routines of where you are located. So with that, I would like to hand over to you, Göran.

Thank you, Emily. And also from my side, welcome to this presentation of Aleima Quarter 1. Well, I think we have a solid start of the year, and I'm pleased with our performance. Let me take you through the quarter one highlights. We have an order intake growth of 6% if I exclude major orders, and our backlog continued to grow in the quarter. We have a continued positive oil and gas momentum and demand across the board. Other contributors are chemical and petrochemical, Industrial heating, to name a few. Slightly positive sequential development of the low refined products. This is something we talked about in Q4 that they were down. They are down year over year, but sequentially improved. I think that is important. We see a weakened demand for consumer segment and strip. We'll come back to that. Revenues grew 12% with a positive mix, and again, supported by oil and gas, chemical, petrochemical, industrial heating, and also medical. We also improved our earnings. Adjusted EBIT more than 10.1% versus 9.1% last year. This comes through high revenues and improved product mix. And also this quarter, we have successfully increased our prices to offset the cost inflation. And we had a solid cash flow. Also, to give a few comments on our strategy, where I think we continue to execute on the strategy today, Cantal announced a strategic partnership to expand the heating offering. We also have had several orders to capitalise on the green transition. And now in April, we announced the acquisition of the production facility Söderfors Steel, and that is to support growth in medical and aerospace. Looking at sustainability, and I'll start with the one that I'm not pleased with, and that is the safety development. We see a negative trend, but if I look on a more long-term perspective, I think the problem is that we've been flattish for a number of years, and that is not good enough, and we are not taking actions to improve. uh looking at recycled steel it improved for the 12-month rolling period but declined slightly from last quarter but that is due to product mix where we i mean we had to have a higher share of virgin materials for for the mix we were also continuing to implement buyback programs for uh with the customers Greenhouse gases emissions are, we are in the low range compared to our peers. And despite already one of the lowest emitters in this industry, we can always improve. And you can see we have a nice trend on that. Share of female manager increased if I compare versus quarter one last year, and we're now on 22.4%. It declined slightly compared to previous quarter as a consequence of total number of managers. Sustainability is not only about our own operation. It's not to do with how we act on the market. We continue to contribute to the sustainability of our customers and other stakeholders through our product offering. Kantal is targeting growth in segments where industrial heating solutions are contributing to customers' reduction of CO2 emissions, and that enables the green transition. And we have received several orders for the industrial heating solutions. And that is in applications like solar, lithium-ion battery manufacturing, and also downstream steel. And there's, of course, crucial components for their ability to drive the green transition in their part of the industry. Gerling, that's an acquisition that was made last year. They are targeting the fast developing hydrogen market. And we have secured yet another frame agreement for high pressure tubes that will be used to support the build out of vital infrastructure for hydrogen gas refueling stations in Europe. Surface technology, that business continued its positive development and deliveries for pre-coated strip to be used for stationary power projects ramped up during the quarter. And this is growing in line with the commercialization of that industry. So I mentioned at the beginning a couple of activities to deliver on a strategy. We acquired Söderfors. The acquisition is to support our plans to grow the medical and aerospace business. And for that, we need the capability of making small sized bars. And we have been looking at different alternatives to do that and now come to conclusions uh that the best alternatives device or the force deal and and it is the production capability that made us decide to make this acquisition and today cantal announced that they started up a strategic partnership with the company route And I think we complement each other. Kantal leading in heating and Rath leading in insulation. So together we will bring sort of the broadest range of sustainable industry heating solutions to the market. So let's look at the market development and go through all our segments. I think demand during the quarter, I mean, it noted the sequential improvement in most customer segments. while it declined compared to last year for parts of the business. In total, we are well positioned and long-term trends and underlying tailwinds are offsetting uncertainties in the market environment. And we have a positive mix in our growing backlog. Demand in Europe was positive. North America was flat. And if we exclude major orders while Asia was down, mainly explained by higher comparables, mainly in the energy segments. Quarter one last year was a strong order intake quarter, so overall high comparables. So I think from that sense, a solid performance. Quarter two last year was the best quarter ever in terms of order intake. So looking ahead, we're meeting even higher comparables. Let's start to look at the short cycle low refined products. They were down year on year, but slightly up sequentially for the group. And if we look at the industrial, it is a decrease in Asia and North America, but up sequentially and still positive in Europe. It's Cantal and Tube that is driving the development in this segment. Consumer, negative, especially in white goods and for compressor valve steel, which is hurting than Strip mostly. And we have a sharp decline in Strip. While we can see, for instance, in application wiring, Cantal, that is also in the consumer segment, they were down year on year, but slightly positive quarter of a quarter. Oil and gas, I mean, investments continue to materialize. We had both OCTG and umbilical orders, and we have a continued solid project list. Chemical and petrochemical application tubing is positive in all regions, but mainly driven by Europe and Asia. Industrial heating, we see solid development with strong underlying momentum in end customer segments like Semicon, metal, solar, glass, steel, many sub-segments needing electrification. Transportation, strong aerospace, particularly titanium tubing for hydraulic systems. Medical, we have a strong positive underlying development. However, timing effects in the quarter are somewhat related to the major order we received in quarter four last year. Hydrogen renewables, still a small segment where they have a strong order and take growth in the quarter. positive trend and we are finding new opportunities all the time the positive development was mainly related to hydrogen in the quarter so again we have a diverse customer segment exposure and that is clearly one of our strengths and we have a good momentum and sequentially improvements but remember the high comparables we will meet in the next quarter Let's look into order intake revenue a little bit more in detail. The order intake is strong. We have an order intake growth of 6% if we look at the rolling 12-month period. In the quarter, we had a positive organic order intake of 6% when we exclude major orders. It was 1.3 billion last year related to power generation and oil and gas. And this quarter, we had two major OCTG orders With a total value of about 880 million. And the total order intake was 6.4 billion. Organic revenue grew 12%. Total revenue approximately 5.4 billion. And book to build 119% in quarter one and 115% rolling 12 months. So well above 100 and our backlog remains solid and it's growing. even more in detail than looking at the components of the top line rolling 12 months order intake trend is upwards that's the orange line this means that we are growing our backlog year-on-year bars for order intake are getting smaller but that is of course because we're meeting higher comparables slightly lower volumes compared to the corresponding port period last year but that is supported by pricing alicer charges and also positive product mix we also see tailwind from currency we'll get into more of the details later on but overall organically strong development both for orders and for revenue

So some more details on earnings.