Beijer Alma AB (publ)

to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to the speakers, Acting President and CEO Johnny Alverson and CFO Peter Forslund. Please go ahead.

Hello, welcome everybody. My voice is a bit different today. It's not because it's dark time, it's because I have got a cold. And for those who don't know me, I can tell you, I have followed this company since the early nineties. I've been doing quite other businesses, but last year I was in here for a number of months as CEO. And we can start with the presentation. Together with me, there is Peter Forslund also, who has been in the company for about a year. Yeah. Good morning, everybody. And we will go through five different subjects. It's the highlights from Q4, financial performance, acquisitions, where we're going in the future, and Q&A. If we then go to the highlights for... But this is just in the beginning of a story that we lost for many, many years. Go to the highlights of the quarter. It's been a tough period, depending on the market circumstances around the world. Also, for us specifically, some cases. But in general, if you look at the markets, In the United States, it's been no change, more or less. It's a slow market, but it's no change, neither upwards or downwards. In Asia, for us, it's actually been a positive trend. We have good opportunities there. We have new customers coming in. And in Europe, it's also okay in in the nordic is more slow business when we talk about liquor force but in the niche businesses in bay tech it's it varies between different companies so there we see positive trends and as you see we had a growth of uh three percent organic to be between 24 and 25 in the quarter but the currency hit us hard And it probably will continue because we had still the dollar is on a very low level compared to one year ago. Then we can go to Lykkefors. And Lykkefors, as I said, is the same as Lykkefors, are the only business we have in the United States. They are on the slow side. The positive side is that we in Asia have new opportunities with new customers. And just as a small example, you might have heard of that the new chips for AI are supposed to be cooled by water. And we actually have no customer. They are supplying a small spring to the connectors to this cooling water to AI. And with the volumes there is in that area, it will be nice business for us as a nice example for new areas. On the other hand, in the United States, we have had very nice business in medical, but as we expected, that is going down now this year, and we're looking for new opportunities in the United States. In Europe, it's... It's rather same level, but for those who know us that the springs for door springs business has been reduced and our export to United States has more or less stopped. So that affects our volume, but all other businesses going about on the same level. And very nice is that our aftermarket business, the springs for aftermarket for cars, that accounts for about 20% of turnover is doing very well. And we are now back on levels before we stopped the business in Russia and before the pandemic also. So we had had a very nice development in that area. If we then go to Biotech, we did a couple of or actually two acquisitions during the quarter, one in Finland, Evona, and one in Sweden, Intercat. But there we also have niche businesses that has developed very well. And we invested in expanding factories last year, and they have now paid off. So we can see that in our invoicing and the results from those businesses where we did the investments. So it's been a very good development for Bayer Tech during last year. And with that, I give the word to Peter to talk about the financials. And you're welcome back with more questions later on.

Thank you, Johnny. Yeah, we go to the key ratios slide. So say you see here we have included capital efficiency. That's the first time we disclose numbers on capital efficiency. We will try to the annual report also to give you a breakdown on the different business areas with the divisions with Dershowitz and Bayer Tech. So we will get more depth in the knowledge over time. The board has also proposed a dividend of 4 SEK per share for the annual general meeting to make a decision on later in the spring. News there is that the payment will be divided in two installments, one in the spring and one roughly six months later. We'll come in a little bit on the background when we come to the financial slides and the cash flow slides. Yeah, we'll leave the other key ratios as is. I will give you a little bit more on the results and a little bit more on details when it comes to the development process. So overall, a stable performance in the quarter. When you look at the profitability levels, you will see a positive mix in Le Chasseurs. Chasseurs had a good development. And then we have had a little bit of shrinking business, mainly due to the currency effects within the industrial sector. But that gives a positive mix effect from the Chasseurs side. Top line in the Leche Forge industrial part is affected by the savings program that we launched back in June. So there is businesses where the profitability levels has not been where we expected that we have closed down. We have closed down a factory. We have sort of say stopped the export to US. We have closed the business line in Turkey. All of that gives a top line effect uh that you see in the report that the organic growth uh win within the support industry is a little bit more sluggish so both the market thing but also a decision that we made to stop some non-profitable businesses uh to make sure we we choose and pick what is really profitable and in the quarter if we take the us door business that's around 35 million sec that we lose in top line we expect the same level of drop also in Q1 and Q2. That business stopped in the later end of Q2 last year so the comparisons for the next two quarters will also be affected by those top line effects. We've talked quite a lot about Alcomex and it's an important part of the program that we've been running. Alcomex is Very stable development. I think it's wise to point out there is still work to do before we are where we want to be, profitability levels. The closing of the factory that we did was finalized in the back end of November, meaning there is still work to do on that front before we are happy with the profitability in Alchemix. Baytech, as Jonny mentioned, is performing on a high level. All business areas is chipping in. We saw the effect from the ramp up from the investments. The effect was a little bit stronger in the end of the quarter than we expected. We have especially Botech, which has performed very well when they have increased the capacity, even above our expectations. So it's been strong delivery from a couple of major tech companies. It's also worthwhile pointing out that even if transaction cost is a part of the business, so for comparable reasons in Q4 last year, we didn't have any transaction costs. And when you do transactions in Finland, you have also stamp taxes corrected to that. So a little bit higher transaction costs in the quarter compared to Q4 last year is also sort of say affecting that you don't really see that the improvement in the underlying performance. We also can mention a little bit in the BayTech side that from the fire safety companies that we have had a very strong end to the year. And this is mainly due to a one-time order that we've had in the quarter and delivered in the quarter. So it's a positive effect from that as well. Not something that we see every quarter, but that business in itself is strong. good I jumped one slide too many yeah so talking a little bit about cash flows we get through a fairly positive cash flow in the in the quarter I would say even strong and here you see a little bit of the reasoning on the dividend payment that we discussed earlier that the cash flow in the first quarter of the year generally is weaker due to the set up the chassis spring business when it comes to customer rebates, making the cash flow lower in Q1. And then to get a better flow of the cash over the year, then that's what we have proposed. The board has proposed an annual meeting to decide on splitting the dividend payment, one in the spring and one in October, November, somewhere. We expect the seasonal pattern to repeat in Q1 2026 when it comes to the cash flow. Looking at the capital efficiency, it's been a good improvement over the year. Driven by the growth that we have. You also see a bit of currency when it comes to translation of the item as well. The absolute number increase looks a little bit smaller than it actually is. It's affected also by currency. Coming into the financial position. A good news from the quarter is that we have a new financing in place with the three Nordic banks, putting on a multi-currency revolving credit facility and a number of term loans in relation to that. It's a three-year facility with the possibility to extend. We think that we have good conditions and high flexibility in the financing, making sure that we have the financing we need for the coming years. We are on a net FDBTL level of 1.7, meaning that we have a good amount of cash available to invest in growth and in acquisitions. So we should have the headroom that we need to reach the targets that we have set. Looking a little bit then on the full year, it was close but no cigar on reaching the 5 billion in Leisure Force. We will leave that for... For next year, it's a solid organic growth in electric Porsche over the year, around 3%. You have a currency effect. As Johnny said, we expect currency, if the rates stay at the current level, to be significant also in Q1. Then the longer the year goes on, the easier the currency comparisons will be of sort. But yeah, the dollar at nine, there is still currency effects to pass through. If you look at BayTech, we've had organic growth of around 5%. It's a strong performance from BayTech overall in the year. We've made five acquisitions, adding around 50% in revenue on that side. We've made acquisitions in all business area within BayTech. So we have a good spread on the acquisitions that we have done. Great, Johnny.

Then I'll leave it back to you. Well, I think I guess it's...

more so leave it back to questions if you wish to ask a question please dial pound key five on your telephone keypad to enter the queue if you wish to withdraw your question please dial pound key six on your telephone keypad the next question comes from max bacco from scb please go ahead

Thank you, and good morning to both of you. I have three quite short questions, and the first one you already touched upon during the presentation, but looking at Le Chaux-Forge, very nice profitability improvement once again, also here in Q4, and as you highlighted, mixed effect with Chassez growing. Is there anything more to add to that? Or is it just the mix explaining the uptick in profitability compared to Q4-24?

No, but from my side, we have the savings program that we have, that we have done, that we see a good effect from. We get the effect that we expect from it.

Okay.

Yeah. That's clear. And then looking at the water intake, I mean, minus 1% organically here compared to Q4 last year. Should we read this as any implications for the coming quarter, or is it more a timing effect?

I think it's mainly the co-play. Yeah, exactly. It's the door springs. Okay, okay.

Yeah. Understood.

Yeah. If you look at the BayTech side, I mean, there you see that the order intake is, so to say, on the negative side as well, on the organic. And that is because in Q4 last year, it's one of the installation companies or project-driven companies. They had a very high order intake in the end of the year, but that's project that is delivered over two to three years, meaning that, I mean, there is no sequential effect from that from Q4 into Q1, so to say, so.

They have a lot of project businesses, big projects. That means it's hard to just measure over one quarter and see the trends.

Okay, understood. And then the final question, it's a bit broader question, but given the strategic shift that has been implemented throughout 2025 and then from rotation in terms of group CEO, but also

responsible for for the chef uh how is the how is the organization coping with all these changes would you say well we are in the start of the process but i think uh the the new goals we have now already communicated is is well accepted by the organization for sure

Okay, sounds good. That was all from me. Thank you very much and I wish you a speedy recovery and I hope you get well soon.

Thank you. As I said, we take questions now.

The next question comes from Carl Ragnarstam from Nordia. Please go ahead.

Good morning. It's Carl here from Nordia. A couple of questions on my side as well. Firstly, touching upon chassis springs nice to see growth but on the other hand it is a bit decelerating sequentially obviously we have comps that is one factor but you see any inventory dynamics as we've seen historically when it's sort of a warm start to the winter that could have impacted the sales volumes in chassis or What do you say about that?

I think it's an impossible question. But I can tell you we have actual problems to manufacture enough of spring, so our own stock is on the low side at this moment. But I mean, I think still it is rather fantastic that we are back on levels as before Russia. That was very important for us, very profitable business.

Yeah, I think if you take the sequential story, it's really what we told in Q3 that Q3 last year was, so to say, very weak. So the comp there was easy compared to what we are facing now. Q4 is a much more normal comp.

Okay, so you see nothing in the sell-in, sell-out dynamic then in the distribution part of your chain? Yeah.

No, it's very difficult to have that kind of detailed understanding of where we're moving.

Okay, that's clear. You talked about the production discontinuation of November, December. Were you able to absorb volumes in other units, or what impact did that have in the quarter?

Yeah, exactly. We... we are moving the production to other facilities. But when you do that, there is always a period where you're not performing on top, so to say, to cover all needs. And I think that's fully expected and fully accepted.

We are partly, as you maybe remember, there was a factory that burnt down in Finland last year. And that man is moving to Sweden, but it takes time to order machines and everything. So So that will take probably in one year something, then we will back on the same track as before.

Okay, that is very clear. And you also touched upon the big orders and deliveries in fire safety in Beirut. Is it possible to give any magnitude of that? Thanks.

No, it's difficult to give a magnitude, but it's, I mean, if you look at the organic growth, say that it's less than 1% or so, around that number, that you add an extra percent on the organic growth from that.

And the final one, if I may, I mean, I've seen many AI angles in storage, but I didn't expect it to pay Alma to be honest. So could you talk a bit about that you touched upon, the AI chip spring opportunity. How big is that business now? What do you see in terms of potential when you talk to your potential or already existing customers? Thank you.

Well, I just gave you just an interesting example of what's happening in the market. as this indoor business went away, as we have, let's say the medical business in Asia is doing very well, but at the same time, the medical business in U.S. as planned is going down and suddenly comes this up. So that is just how the market looks like. And suddenly something else that shows up. We will have volumes, but I can't give you any figures about that.

Okay. That is very clear. Thank you.

Thank you, Carl. Yeah. And yes, as we said before, that we will take, so to say, questions on the financials. Then we go into acquisition and give the strategic update. And then we will open for questions if there are any left after the strategic update as well. But it is also good to cover a little bit of questions here on the financial side before we move on. So please, next question.

The next question comes from Carl Korshedden from DNB Carnegie. Please go ahead.

Good morning, Jonny and Peter. If we just look a little bit on BayerTech, I noticed it's 8% organic growth in the quarter, which is obviously strong, but maybe not as much of a drop through on that growth as one might have expected. Is there anything to highlight there? Is this the transaction cost you were talking a little bit about, or is there anything in terms of a mix or similar you should also keep in mind?

No, I think transaction cost is a good one. I mean, in the last quarter, we had a very, very strong from the niche technologies. Now we have a little bit more mixed growth that also, so to say, there is a slightly mixed effect on that, but not much. So in terms of profitability, the comparison, if you add back the transaction cost, you come up a bit and it looks more reasonable.

Hmm. And if we circle back a little bit more to the Leche Forge margins, is it possible to quantify the magnitude of these different components if we, for instance, talk about the cost savings in Alcomex, possible mix effect, I don't know, medical perhaps in Asia driving something to that, and also the winding down of the U.S. operations in Alcomex?

You know, we also have, we reduced the overhead costs rather dramatically in second quarter. That also says combination of a number of different effects, including what you mentioned also. So it adds up to these figures and some of you know what I think is the future goal for that business when we are through. Still, we have some things to clean up after Alcomex during this year as well.

Yeah, understood. And on the topic of Alcomex, is it possible to give any indication where we are currently standing in terms of margins there?

I will not comment on that detail level, but I mean, year to date, the profitability has really moved in the right direction. We're improving from last year. We expect to achieve a more stable 26, but as we said earlier, we are not fully there and there is volatility still to be expected there. I mean, you have to remember in the base of the door spring market, the door spring market is still what we will classify as very weak. coming back and coming up is also connected to getting volumes back. It's one of the markets there where it's darkest, so to say.

Yeah, understood. And just finally from my side, if you just look at the demand situation overall, I think it would be helpful to hear you talk a little bit more about the current sort of market situation, maybe particularly the Lechefort's industrial side of it. It seems like the organic growth in that part came down slightly sequentially here versus Q3, even if we adjust for the Alcomex comparison in the US there. And our intake may be slightly on the weaker side or so. So just hear you talk a little bit about what you're seeing currently and maybe what we can expect in terms of trend for the next one, two quarters.

The Nordic part, Likafors Nordic is a big part of, important part of Likafors. And they have a couple of large customers there and that is truck industry. And as you know, truck industry is down and that we suffer off as well as ABB Robotics. On the other hand, we have Hitachi, which is growing dramatically. But of course, that is not fully compensating for the downturn in truck industry. But I guess the truck industry is on its lowest level now and probably will pick up. And that will have helped the Nordic business. In Asia, we have medical business doing well. And as I mentioned, this springs for the liquid cooling of ships. In the United States, it's... It doesn't happen that much. It's a slow business and we have some large customers since many years and they are on the low side and in the industrial. And who knows about the future? I think probably when truck industry improves, you can see that in our figures. And then we will also, of course, work normally trying to find new products with existing customers and also new customers.

You see a diversification between the different segments in the market, just as Jonny is pointing out, that you have a number of areas that are strong, then you have a number of areas that are clearly weaker. And that makes it difficult to get the full picture. It's really down to the segments. We have energy, we have defense, we have a number of segments that are strong, both in the Nordics and in other places. But you also have segments that are weak. The difference between the weak and the strong ones are fairly high at the moment.

Yeah, that's super helpful. And just maybe one last from my side. If we just look at the management team now, there has been some changes recently. How long do we expect it will take to find a new permanent CEO?

It normally takes between six and eight months, as last year.

Understood. Thank you very much. That was all from me.

Thank you.

The next question comes from Patrick Schwartz from Pareto Securities. Please go ahead.

Hi, good morning. I have a couple of questions here. First, on this move here from Finland to Leche Forge, how should we think about capital expenditures during 2026?

That part is covered by insurance. We have a very good insurance.

Yes. That's great. And then on working capital here, there's been kind of a release here during the last quarter and also this quarter, and you've made some great improvements. How should we think about working capital here in the near term? Of course, over time, you expect to improve profitability to working capital, but yeah, any color here in the near term?

No, it's difficult. As Johnny said a little bit in the beginning, we are starting to work with capital efficiency, trying to get an understanding out in the organization and trying to get this as one of the important daily tasks in many functions. And so to say, it will take time for the effects for that to come in. Short term, it's very difficult to guide anything on that. I mean, we can look at the history, but... We have no better guidance than that.

And then also on kind of a previous question here on kind of the seasonality. Of course, it's been so far a bit of a colder winter. How should we think about trustee springs here on working capital build?

We are . We have promised a production volume in the end of the year. We didn't have enough, but we have to build a bit more stock now in January in that area. It's dramatic, but some increases. We have a number of different areas, so it's hard to judge what the total value will be for the stock for the whole of Beiranma. But we will come back, we will show a few targets on the future now, so we can talk about also the stock values and capital efficiency.

Maybe there's... Okay, thank you. Yeah, thank you. And then finally, on kind of order intake here, plus 1% in Leche Forge and How was chassis springs here given that I assume a large part of the drag here was related to door springs?

Yeah, exactly. We don't guide on the order intake specific chassis. We only do that on the full level. Okay, thank you very much. That was all for me. Great, then we will continue with a very short part on acquisitions and then go into the strategy part.

Last year, we promised the market to give financial goals beginning of this year. And we issued those yesterday after the decision in the board of Beiralma. And our goal is to have a beta growth of at least 15% a year. where all we expect that 10 to 12% will be acquired growth and three to 5% organic growth. Organic growth, of course, depending on the general market, how it develops. And so what will happen also now is that we will use all the companies we have around the world as a base for acquisitions in other areas and we used to like we used to buy a lot of spring companies but we'll also buy companies with our smaller components around the world is our goal that means also we will have an even more international footprint for the future and we will also improve to try to improve the capital efficiency put focus on that and our goal is to be about 50 percent We are now on the level of 46. So it will take a while, but we will implement measurements in the organization to make a stimuli to really work with the capital efficiency in the group. Okay, we can go to the next slide. And here you can see how we have grown over the years. So if we have this 15% growth, we will double our turnover roughly in five years. And during the last five years, we actually almost been there with 1.8 times between 2020 and 2025. And our acquisition focus will be us, always has been actually business to business. We work industrial tech, we will work with companies we understand, and we are looking for companies at the right price. And if the price is not right, we will not acquire. And so we will also work where we look at each company. If a company has opportunity to grow its market, and keep the margin, we will grow the company. But if there are companies we acquire that has a limited market geographically, we think it's better to let them stay where they are, have a nice margin and use money for acquisitions of other businesses instead of pushing growth at any cost. But we have and we will continue to have growth initiatives in all companies where it's suitable. As you see, we are on many places around the world, but I should say that our focus for acquisitions will be on Europe. At this moment, I personally have experience acquiring companies in the United States, and we have four companies there today. But at this moment, with the market situation and political situation in the United States, we will not focus on that. We will focus on acquisitions in Europe. And we don't think that there are so many acquisitions, interesting targets in Asia. We have done one in India last year. So we have a footprint in India, and there might come more in the future. But others in Asia is not prioritized in this moment. It's Europe we will have as a priority for the future. And we are going to use the local know-how we have by all these people we have in different countries, It's much easier for an Englishman to talk to an Englishman than if it's a Swede comes and talk to an Englishman and want to acquire a company. We are also going to increase our M&A team with more resources. We are lacking resources at this moment, but we have people coming in into the organization.

Great. I think we can leave it open for questions if there are any questions on the strategic part.

The next question comes from Carl Ragnarstam from Nordia. Please go ahead.

Carl, are you there? No call.

The next question comes from Max Baco from SEB. Please go ahead.

Thank you, and hi again. Just a very short question on the capital allocation going ahead. How will you make sure that capital is... I mean, allocate it in the right way when looking at Länsjöfors versus Beijer Tech. Will the capital allocation be decentralized in that way, ensuring that the right segment is prioritized, so to say?

Well, I should say that all investment over a certain level is decided by me or the board. All acquisitions in Beijer Alma is decided by the board.

Okay, that's very clear. That was all I had. Thank you.

The next question comes from Johan Dahl from Danske Bank. Please go ahead.

Yes, good morning, everyone. Just a question on this European acquisition pipeline. This is a strategic shift, obviously, going from industrial springs to pipelines. sort of a wider scope for acquisitions. I was just thinking, can you talk about the current pipeline, the current scouting potential short list that you have if you're targeting Europe? I'm not talking about the Nordics, but in Europe. And secondly, can you also talk about a bit more specifically on the resources you're aiming to add, an incremental cost investment to sort of get this going in Beiralma? Thanks.

At this moment, we have pinpointed four persons in Europe who already are in an organization, has been there for quite a while. And so that course will, then we have one recruitment going on a central level. So that's where we start. So the list today is not that long. So we will start, this will happen during the year. So we are in the startup phase now.

Would you say, Johnny, that, you know, Just looking maybe one or two years ahead, does it seem fair to assume that, you know, BayerTech with its Nordic franchise being much more developed pipeline, I guess, that perhaps more will happen there in the sort of short term compared to in Europe? Do you have any input there?

Yeah, depending on how many opportunities there are in the Nordic. But even BayerTech might look outside Europe. Sorry, outside Nordic. But very short term, I should say, it's more in BayerTech. But in one and a half year, I expect it to be more in the other area.

Okay, thanks.

The next question comes from Carl Ragnarstam from Nordia. Please go ahead.

Hi, it's Carl here. Can you hear me? Yeah, we hear you, Carl. Yes, we hear you. Okay, great. Sorry, I couldn't unmute for some reason. Looking at the EBITDA growth, 15% over the cycle, you said 3% to 5% organic. If you are a top-line company that is typically generating GDP+, You've done that historically. Don't you think it's a bit prudent to be at just 3-5% organic on the EBITDA side?

It's over a business cycle. We always strive to be above, as you say. But can you tell me what the organic growth or the GDP growth will be next year in Europe? I can tell you where we're going. So it's just an indication that we see that the majority of the growth will come from acquisitions. But of course, we will push the organic growth as well. It's just an indication, it's not an exact figure.

Yeah, so it's not an indication of how you see the drop through of the potential volumes coming?

No, no.

Okay, very good. And also on your new financial targets, obviously we know it from the Burma behaving sphere, I guess. We've seen other companies implementing similar targets, some successful, some less. So my question is, how will you work with these financial targets to really get them deep into the organization, the subsidiaries, each and every employee? And will you incentivize every manager or potential branch manager on the exact same metrics? Or how will you work with the financial targets to achieve a profitable working capital where you still have quite some upside to?

Yes, our intention is to have an incentive program for each MD, managing director of the companies, to improve their targets on each company from where they start mean it is depending on some of their high level and or the lower level but the intention is to implement it in every company yes but on an MD level and when will that happen you think during spring okay that is very clear thank you all for me

The next question comes from Carl Korsheden from DNB Carnegie. Please go ahead.

Yeah, hi again. Just a follow-up on the financial targets. When you're talking about this 15% over a business cycle, are you sort of expecting to remain your current dividend policy as well, or do you think you will have to reduce that in order to reach this target? And also, if you could... elaborate or say anything in terms of leverage profile? Do you have an internal target of how high you can go in terms of net depth to EBITDA or how do you see that?

Yeah, dividend policy stays as is. There will be no change to the dividend policy. We will stay where we are. When it comes to the gearing and the depth, I mean, we have been prudent on going above two. I wouldn't call it an internal target, but the company has been prudent in terms of the leverage. So I think it's fair to say that we are striving to be at the levels around two or slightly above. It's not a gearing story where we gear it up to four and use the gearing to fund the growth. It's about generating good cash flows in the business and invest them wisely over time. That's what it's about.

Got it. And just a follow up, maybe, yeah, you sort of mentioned that BayerTech might also be acquiring outside the Nordics eventually, but just when you're speaking about this company, not just in Springs, but other components as well, or are you primarily targeting companies with their own sort of production capabilities or can it also be sort of technical trading companies or do you have any ideal profile for that the answer is yes yes yes okay that's that's helpful thank you very much that was all for me

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time. So I hand the conference back to the speakers for closing comments.

Great, Johnny. Yeah, thank you for the interest you showed in us. And well, unusually many questions. I'm happy for that. And I see you in a quarter. So thank you and goodbye. Bye.