Balco Group AB

Hello, and welcome to today's presentation with Balco Group. With us presenting, we have the CEO, Camille Ekdal, and CFO, Mikael Grindborg. 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 nine to raise your hand and then star six to mute yourself. You can also type in your questions using the form to the right. And with that said, please go ahead with your presentation.

Thank you. Welcome to Barco Group quarter four presentation. First of all, for some maybe new listeners, a very short snapshot about Barco Group. Barco Group was founded in 1987 and consists of several balcony and facade companies. Barco operates in two main segments, renovation and new build, and our core expertise is to supply glazed balcony solutions on the renovation market to tenant-owned associations. Barker Group is a market leader in the Nordics with key markets, Sweden, Denmark, Norway and Finland. And we also have a strong challenging position on other northern European markets. And if you have a look on the chart where we show the revenue per market there, maybe then for old listeners, you can see that if we see the revenue per market on 2024 versus 2023, we have an increase there on the part belonging to other Nordics countries. where we go from 25% to 45%, and then it's a decrease for the Swedish market, and the rest of Europe is on the same level, 13%, compared to 2023. So let's go over to our fourth quarter. We had a very strong cash flow, both in the quarter and also for the full year, where the operating cash flow amounted to 58 million SEK for the quarter and 139 million SEK for the full year. The order intake increased by 22% to 360 million SEK in the quarter and by 41% for the full year to 1,377 million SEK. Here I can say that the organic order intake was unchanged for the full year, but we had an increase in the second half of the year by 6%. And that shows that our impression is that the market has actually bottomed out now. The net sales increased by 33% to 386 million SEK. And here the increase comes from the acquisition we made previous year. Organic increase for the quarter was 1%. We have had a very good development in Norway, both in the quarter and for the full year. And during the fourth quarter, Balko AB received a major project in Norway with an order value of about 50 million NOK. And we can see here that our solution to integrate air-to-air heat pumps into our Balko projects have been successful in the Norwegian market. During the quarter, we also finalized the integration of the Riku subsidiaries into the other companies in Barco Group. And the cost for this has been taken in the fourth quarter. Here we received very positive feedback both from our internal organization and also from the customer side on these integrations. I'm also very happy to say that our sustainability KPIs have developed good in the positive direction for the full year. We have shown lower sickness rate, lower employee turnover and also lower carbon dioxide emission for the full year. And we also have here that the board of directors proposed that the annual general meeting resolve that no dividend shall be paid out for the financial year. If we go over a little bit more to the market, I would say that the market situation has more or less been unchanged since previous quarter. We have said before that we have seen an increase in activities and we continue to see that increase. And especially if we talk about the renovation segment for the balcony companies in Sweden and Norway, here we have a positive direction for sure. And as I said, the order intake and sales have developed well in Norway during the full year and here both regarding the major turnkey contracts that we can do with the air-to-air heat pumps and also single balcony projects. However, we see that it continues to be a strained competitive situation for our Swedish facade companies. And we also have a strained competitive situation for our balcony company in Denmark. In Denmark, our main product is city balconies. And a city balcony is more or less what you see on the picture there. It's a smaller open balcony, and we are putting them on to older houses. And if you look, so to say, on the renovation market, where they already have a balcony, that is developing accordingly as in the other countries, also in Denmark. But quite a large amount of our sales in Denmark is connected to that. We put new balconies on existing old houses. And here we can see that the markets are more cautious and the decision time continues, as we said before, to take longer time. If we look at the Finnish market, we can see that the new build market has bottomed out, but we can't see any rapid return for new construction of multifamily buildings in any Nordic countries yet. But in Finland, there is a support system for the construction and renovation of multifamily housing. So that can be a positive impact during the year. And they're especially promoting that they should have an early start. So the longer you have come into the project, the more it's easier for you to get the support. So we hope that that could have a positive effect on the new building business in Finland. However, the renewable segment in the UK and Germany continues to develop well, as well as the Finnish renovation market. So, if you go a little bit over to more of the figures, Michael.

Yeah, and have a look at the quarterly figures and also the full year figures. Net sales in the quarter increased by 33% to 386 million. Here, a quiet group was 34%. We had a negative Currency effect of 2% and organic growth was 1%. For the full year, net sales increased by 17% to 1,418,000,000. Adjusted operating profit, the DITA, amounted to 18 million in the quarter, corresponding to an adjusted operating margin of 4.7%. For the full year, adjusted operating profit was 70 million with an adjusted operating margin of 4.9%. Water intake increased by 22% in the quarter to 360 million, and for the full year it decreased by 41% to 1,377,000,000. Our water backlog has increased by 22% to 1,309,000,000. For the earnings per share, it was negative in the quarter, and if we look at the full year, earnings per share was 0.05 SEC, and adjusted earnings per share for the full year was 0.89 SEC. We had a very strong operating cash flow that amounted to 58 million in the quarter, and for the full year, 139 million. Have a look at the two segments and start with the renovation segment. Here, net sales in the quarter increased by 16% to 281 million, which corresponds to 73% of the total net sales. And for the full year, net sales per renovation segment was exactly 1 billion. Order intake in the quarter increased by 6% to 285 million, which corresponds to 79% of the total order intake. And for the full year, order intake has increased by 28% to 1,074,000,000. Adjusted operating profit in the quarter amounted to 20,000,000, corresponding to an adjusted operating margin of 7.0%. For the full year, the operating profit was 56,000,000 with an operating margin of 5.6%. Order backlog has increased by 13% to 1,044,000,000. And it corresponds to 80% of the total order backlog. And our new build segment, the smaller segment, which has increased during the year, with our acquisition of Riku and also strong development in UK. Here net sales in the quarter increased to 106,000,000. And for the full year, it has increased to 418,000,000. Order intake in the quarter increased to 75 million, and for the full year, the order intake was 303 million. Adjusted operating profit in the quarter amounted to 3 million, with an adjusted operating margin of 2.8%. While for the full year, operating profit was 19 million, with an adjusted operating margin of 4.5%. Or the backlog for the new build segment has increased by 79% to 265 million. And our financial position at year end, we had equity of 801 million SEK. And our equity to asset ratio was 49%. Our interest bearing net debt, excluding leasing debt, in relation to adjusted EBITDA pro forma amounted to 2.7, and it was a small decrease since quarter three when it was 2.8. And some update on the sustainability side. And now we have full year figures. Our risk rating according to Sustainalytics was lowered or improved to 17.2. And it means that we are among the 6% with the lowest risk rating in our industry, which is building products. And if we look at all companies, we are among the 20% with the lowest risk rating. Sickness absence in 2004 decreased to 3.6% from 3.7%. Employee turnover decreased also to 7.9%. If we look at the accident frequency and for ruling three years, it continued to decrease. But for the actual year 2024, it increased to 11.4. And here the increase comes from the acquired companies, which have a little bit different way they report it. So here we have also started a training program to increase safety on construction sites and also reduce number of accidents. Our carbon dioxide emissions, according to scoop one, and we measure it per work hour, it decreased to 957 gram per work hour compared to 1,200 last year. And for Scoop 2, it decreased to 460 gram per work hour, compared to 509 the year before. Also, recycled waste increased to 80% compared to 76% last year.