Balco Group AB

Hello and welcome to today's presentation with Mako Group. With us presenting today, we have the CEO Camille Ekdahl and CFO Mikael Grünborn. We'll do a Q&A after the presentation and if you're calling in and would like to ask a question, please press star 9 to raise your hand and then star 6 to turn on your microphone. You can also use the form that I still get to write if you would like to type in your questions. And with that said, please go ahead with your presentation.

Hello, welcome all to our presentation. First of all, for all new listeners, just a very short snapshot of Balko Group. Balko Group was founded in 1987 and consists of several balcony and facade companies. We have the head office in Växjö. We are working in two main segments, renovation and new build, and our core expertise is to supply glazed balconies and balcony solutions, primarily for the renovation market and to tenant associations. We are the market leader in the balcony business in the Nordics, but we also have a strong challenger position on other European markets. And over to the highlights for quarter three, we actually more than doubled our order intake. The order intake increased by 111% to 285 million SEK versus 135 previous year. And here actually the organic order intake was 49% higher than previous year. The net sales increased by 31% to 331 million SEK versus 253. Here, the increase comes from the acquisitions we made earlier this year. In January, we acquired the Finnish glazing company Ricky Group, and they have earlier been focusing on the new building segment, and they also have had subsidiaries in Finland, Sweden, and Norway. As we announced and presented in our press release previous week, we will now make some structural changes just for developing the business and also for some smaller cost savings by closing down their subsidiaries. and this means that we in finland will integrate their subsidiary quality which have been working more mainly with the renovation projects we'll integrate that to rico and start a new business area called renovation area and there we will develop the renovation segment even more of course also rico will continue to work with new building segments In Sweden, the subsidiary Rik i Sverige will be integrated to Erko Teknik. Erko Teknik has been part of Balco Group since 2021. And Erko has both historical and also now very good partnership with builders, especially in the renovation segment. Now when we add RICO closer together with Erko Teknik, Erko can broaden the offer to the builders for renovation projects, but we will also together have a very good combination and a very good strength on the offer to the new building segment for the building here in Sweden. In Norway, they had a subsidiary called Glassy, and that is now sold to the minority owners. And then we come to this with that we have also a new innovative solution. As I have said to you several times before, all glazings are giving energy savings. And doing a glazing with Balco, you can get up to 30% energy savings. And these have been a trigger all the time for us to integrate energy saving solutions, more energy saving solutions in our projects. And about one year ago, we implemented a solution where you could integrate air-to-air heat pumps with the tubing of them in our glazing. And we have had very good market response for it. We have received a couple of big, good projects for it. And therefore now we have also developed further our solution with the air-to-air heat pumps and have applied for new patent in this area. So we continue to be a turnkey supplier within the green transformation. Yes, going to the market update. We are noticing an increase in the activities, but we should of course remember that it is from a low level. But this is especially for our balcony companies working with the renovation. Here we can see that during the quarter, Barco AB received a major turnkey project in Borås with a value of about 60 million SEK, where we will... supply glazed balconies together with facade works drainage and we will also upgrade the green areas around. We can however see that some of our companies are exposed for greater price pressure. This is especially valid for our facade companies in Sweden and we have also seen tendency on the balcony companies in our balcony company in Denmark. And also in Denmark, we see that the trend of the longer process time for decision-making is also remaining. I'm very glad to say that our newly acquired Finnish company, Suomen Odla VSNS, has received several major projects during the quarter and the first week after. And they are choosing as a turnkey supplier for three big projects with a total value of about 8 million euro. 1.9 million of these are included in the 43 order intake figures. And the entire group continues, of course, to have a strong focus on the ordering tape, because that is what we need to get and continue to get. But we will be cautious about entering the price pressure projects that we can see, especially on the facade companies that is now up for discussions.

so michael going over to the financial figures yeah and some financial update and start with the quarterly result for the group the net sales increased by 31 percent up to 331 million uh here acquired group was 43 percent uh currency effect was minus four percent in the quarter and organic growth was minus eight percent uh our adjusted operating profit amounted to 16 million compared to 15 million last year, and it corresponds to an adjusted operating margin of 5.0%. Our order intake increased by 111%, up to 285 million. Here, acquired order intake was 62%, and our organic order intake increased by 49%. Our order backlog has increased by 25% up to just about 1.3 billion SEK. Earnings per share amounted to minus 0.03 SEK and our operating cash flow in the quarter was minus 1 million SEK. If we go over to our two segments and start with the renovation segment, here net sales in the quarter increased by 10%, up to 247 million, and it corresponds to 75% of the total net sales in the quarter. Order intake for renovation segment more than tripled, up to 250 million, and it corresponds to 88% of the total order intake. Adjusted operating profit for the renovation segment amounted to 15 million and corresponds to an adjusted operating volume of 6.0%. Order backlog has increased by 15% to just about 1 billion and it corresponds to 78% of total order backlog. And go over to our smaller segment, the new build segment. Here net sales in the quarter almost tripled up to 84 million and it corresponds to 25% of the total net sales and all increased mortgages coming from the acquisitions we have made mostly from the weekly group. Order intake in the quarter amounted to 35 million. Here it's down from 53 million last year. The reason behind this is that we last year received a big order in Ireland in this quarter and this year. The organic order intake for new business has been minus 8%, so the increase. Otherwise, we have a risk coming from the acquisition of Rickel. Adjusted operating profit amounted to 3 million and it corresponds to an adjusted operating value of 3.8%. And the order backlog has increased by 75% up to 294 million. So it's 22% of our total order backlog. And to have a look at our financial position here at the end of the quarter, the group's equity amounted to 799 million. with an equity ratio of 49 percent. Our interest-bearing net debt excluding leasing debt in relation to adjusted EBITDA pro forma amounted to 2.8 and it's up from 1.1 last year. And we have a banking agreement for another two years with Danske Bank until revolving credit facility of 510 million with an overdraft facility of 75 million and back to you