AQ Group AB (publ)

Welcome to the AQ Group presentation for quarter one. Nice to see you all. It's already one minute past nine. So let's start. We will go to the first point here. Normally I have this slide. It is why you should invest in AQ Group. We have an earnings per share CAGR of 14% over the past 10 years. We have made profit every quarter since the foundation 1994. We are exposed to industrial market segment with underlying growth, electrification, including data centers, defense and medtech. We have a long history of acquisitions. Normally we buy two to four factories and we have a very strong balance sheet with 1 billion of net cash position, excluding leasing. Some quick facts about AQ, we're 8,000 employees, 9 billion in turnover for the last year. We have seven business areas, 15 plus market segments with manufacturing in 17 countries with 4,000 customers globally. And then we made profit as I said, every quarter for the 31 years. And we have over the past 10 years had a 14% earnings per share CAGR. We make acquisitions every year, we try, and we are part of UN Global Compact since 2012, which is our sustainability initiative. So for the first quarter. Net sales increased by 3% to 2.3 billion SEK. It is a little bit better than last year. Median operating profit increased with 5%. compared to the last year and also profit after financial items increased with 9% to 223 million. Profit margin before tax was 9.4% which is better than last year and profit after tax was also better than last year at 179 million. Cash flow from operating activities was 339 million which is much better than the year before. And also earnings per share was up to 1.95 SEK per share.

Some highlights from the quarter.

We are growing in data centers and defense. It is a strong growth in both of those segments. A little bit different depending on geographic market. In data centers the main growth is coming from our inductive components business area. and on the right you can see some different products that we deliver into different data center applications so the top one is for electrification of data centers so I think we will deliver of those components you see there we will deliver more than 3 000 pieces over the course of 2026 and it is made in one of our factories in China and the bottom part there is for heat or ventilation of data center cooling you can say so it is to one of our American customers it is a water cooled inductor and we will deliver we will increase the demand is increasing and we will increase our output with 100 percent in 26 versus 2025 we believe also that 27 will be even better So in the quarter, we have doubled the output of these big transformers that I've talked to previously, not the ones on the picture, from our sites in Hungary and Czech Republic in quarter one, compared with the previous quarter, which was quarter four last year. We continue to ramp up and we'll increase output in quarter two and quarter three as well. Then we will also do finished products of those ones also from our factory in Finland. We have doubled the net sales for defense from our three sites in the UK compared with the same quarter last year. It is a dramatic increase and we are growing with customers in UK predominantly but also in Norway and our factory there does wire harnesses and electromechanical components for different aircrafts, a lot in the air. We also see a strong growth from our defense sites in Northern Europe and that is predominantly in Sweden. We also see strong growth from the marine sector, naval sector in the US. As I said, we have 30% growth in inductive components for HVAC from our factory in Shanghai. We also have increased demand for parts for gas turbines that we do. We do very small cooling holes in gas turbine blades for the major gas turbine manufacturers in Europe and the US from our site in Hungary. We see a strong increase in demand also from from this and it is driven by data center demand. We have in our US transformer factory in Virginia, we have an extremely strong order intake in quarter one with $20 million in new orders, which is a record for us. And as a comparison, this factory had a turnover last year of like $35 million. And this is not driven by data center because they are not so much into the data center. It is however driven by data center as well because data centers are sucking out all the capacity in US. So we are delivering to other segments but the capacity is not there. So we are basically winning everything we quote. Operating cash flow is very good in the quarter. It is driven by high profit and also increase in accounts payables. We are ordering quite a lot of material and we normally don't order a lot of material unless we see something to deliver going forward. We are also very proud in the quarter that we have promoted several internal leaders for its different factories. We will have a new managing director in Italy, Lucia. We have a new managing director in AQ Magnitra, a transformer factory in Bulgaria, which is internally recruited. We have a new MD in our transformer factory in Enköping. Valdemar is promoted there. And we have two new MDs also in Bulgaria, Anna Hristová and Ivan Kusarov. So a lot of new leaders we are promoting internally that know our core values, know how to grow the business. And we also have some people retiring then, of course. So it is fun with new leaders and this is super important for you as an investor, more important than you think. When we have good leaders in our factories, we make profit, we grow and we have fun. Some low lights in the quarter. We see some weaker demand in the systems business for Medtech and food packaging. For Medtech, it's not plummeting at all, but it's not growing as it used to. It's quite kind of flat, even though we have won some new orders in Germany for Medtech customers, which we are very happy about.