Beijer Ref AB (publ)

Christoffer Norby here sitting together with Joel Davidson. We'll take you through the PowerPoint slide and of course finish off with some Q&A later on. So we'll move straight away to the update we always do with a rolling 12 where we continue to to grow our sales, adding employees, and of course also continue to grow with our branch and customer network. And we'll come back a little bit on the U.S. that we just acquired a critical piece in our strategy in the U.S. with Young Supply yesterday. So moving on to the next slide. There you get a little bit of summary of the start of the year, but also a little bit of our historic number to put it in perspective. We continue. uh our past a last couple quarters to face out on organic side versus very high comps which we are coming to them here in march so as we move forward we have those problems organic comps behind us despite that with acquisition uh we continue to go four percent organic was minus four uh as it's been the last couple of quarters uh fx is uh is neutral. You can see on the margin side, nine and a half percent of the very strong margins and it's across the board. If you look at our APAC business, if you look at our May on the US and product groups continue to have very good traction on our gross margin and cost to the business. So the margin is stable at a high level and we expect this to continue going forward. Of course, proud of the strong cash flow in the quarter. We've been saying that, I would say, all along as we started the cash or the inventory alignment in Q3 last year. And you can see that on the chart here, continuing to in Q1 as we continue to balance our inventory, even as we've gone into high season. Here we continue a good traction on and we expect this to continue throughout the year as we've been stating before Earnings per share a down a little bit related to Cost and also a number of shares, but you'll come back to that And then also proud of saying that we closed a critical acquisition for us yesterday in young supply a leading wholesaler that fits extremely well into our network, very strong in the commercial refrigeration. So it's a platform for us that we can expand, but also good on the HVAC side and a market leading position. So extremely happy about managing all those things here, do Q1 in April. Moving on to the next slide, you can see on the highlights there, of course, HVAC has been the highest comps we had over the last a year related to the energy situation we had in Europe, as I said before. That ended for us in March. Now we've come across more normal comps. But I would say still pretty good. The minus seven versus plus 17, so it continues to be a good market. The OEM side continues to grow, even though we had compared with plus 24%. So it continues to do very well on the OEM as we focus on the green transition in Europe, but also starting in APEC region and one day we'll have it in the US as well, but not yet. Commercial Industrial Federation is slightly down, mostly related to trading days. That type of business is 100% the daily business from all our branches. So all in all, we're pretty happy with a stable quarter on this side and mostly affected by negative trading days and comms, which we, you know, as we move into Q2, those things would disappear. So then going into our different region, you have our largest region, EMEA, who continue to deliver well. Of course, they've been growing the most, as you can see here, compared to almost 28% last year, and a lot related to the the energy situation we had in Europe and on the HVAC side. But I would say it's still a good performance. The OEM is growing 16%, commercial industrial refrigeration, also related to trading days. Stable margins in the business. And of course, as a man, I moved into Q2 and high season. pretty positive on the future moving here, but I would say stable and good development on both the margin side and also on the cash flow side for EMEA. Moving into APEC, APEC did very well, and I'll continue to see if you see the trends there of good margin development, I would say stable business on both HVAC and commercial industrial refrigeration, then OEM, We see pretty good activity in the pipeline on projects, but that's going to come in more in the second half of the year for APAC. We did a smaller acquisition, QAE, very nicely fit into our geographical footprint on HVAC. But in general, I would say HVAC had a very solid quarter. And of course, HVAC, very heavy in Australia and New Zealand, and they're just wrapping up their their summer season. So there's good traction during the high season in the APAC region. And finally, moving into, of course, our newest division, North America. Good development in the market. I would say pretty stable on the trading day to day, which is good. Good margin discipline, good gross margin development. We do have The comparison is hard because this year we had the first 20 trading days that we didn't have last year, which is usually, it's about 1% hit on the margins because of those first 20 days of January. It's high cost, low sales. So if you adjust to that, a good development in the platform, also in the US, of course, we're working with the integration of Amstron Web Supply. And then recently, yesterday, we just signed the Young Supply, who has a nice geographical connection to the rest of our branches. They have a very good, almost 50% is commercial refrigeration. And so it gives us the platform that we've been looking forward to, to expand commercial refrigeration, expand CO2, and other types of initiatives. But then also a very good HVAC business that fits into the rest of Heritage. Very happy and also very much look forward to working with the team in the heritage platform. Then worth mentioning, we continue the journey on the strategic in the US with our own private label in HVAC. We are expanding our federation portfolio and we will accelerate that as we now have Young Supply under our wings as well. Opening a new branch in Tennessee here in May. and a couple of more in the pipeline for the year. Of course, second half of the year, we'll start transitioning into the A2L new equipment that will be the driver for the future in the U.S. And we'll continue to have a nice discussion and pipeline as we continue our journey in the U.S. on the consolidation front. So, as I said, all in all, a very good quarter in the U.S. as well for us. So summarizing a little bit, total sales growth 4%, organic minus 4, slightly growth in EBITDA, and then the EPS change slightly negative. We'll come back to all these numbers as we move through the presentation. This is just looking at how the quarter played out when you look at the organic and the M&A. So continue to have a nice M&A growth, which will, of course, now with young supply, continue here through Q2. And also, as I said before, better comps and not as much affected by less training days to move forward. Here's the longer trend, as you see, comparing with the very, very high comps here that we are coming at the end of here in the comps that we had in Q1 last year of almost 15% growth. on there, but continue to be positive and we expect that to continue here as we move into Q2 and the rest of the year of the business. Here you have the organic side on HVAC, which has been the biggest driver of these comps in EMEA and you can see, of course, still growing at 26, 29, 17%. So I would say the development is tracking pretty well on HVAC and we still see the market has been pretty good out there on the HVAC side so we're moving into high season now especially in EMEA and North America on the HVAC side EVTA four percent up despite lower sales on the organic side and then you can see very stable margins despite lower sales so a good execution on managing the gross margin and the cost in the business as we expect to do. Here you can see the margin development continue to be very good. You can also see the seasonality in our business where you see the development in Q2 and Q3, which is mainly related to, or I mean, 100% related to that we have much higher volumes in Q2 and Q3 as it gets warmer and warmer.

Then handing over to Joel. All right, thank you, Christopher, and good afternoon, everyone. As we covered most of the P&L, I will jump straight to our report, the EBIT of 684 million, which is up 3% compared to last year. So our net financial expenses in the quarter amounted to 141 million, and it is a level which I think is representative of where we are at the current leverage level. Tax expenses in the quarter of 135 million, which representing an effective tax rate of 25%, resulting in a net profit excluding items affecting comparability of 408 million, which is then 12% lower compared to last year. And this decrease in net profit, excluding items comparability, is, as you can see, driven by higher financial costs compared to last year, which is a combination of FX, higher debt levels, and also higher interest rates. On the EPS side, reported EPS down 4% in the quarter, but if we are adjusting them for items affecting comparability, which is all related to the bridge financing last year, and applying the same number of shares, EPS is down 13% in the quarter. Moving over to cash flow, as already mentioned, very strong cash flow in Q1, 582 million driven by a controlled inventory build-up, which has limited the additional working capital tied up in the quarter to 115 million. Just as a side note here, reported inventory in the month is up approximately 150 million, but if you adjust for the acquisitions, we have done the underlying like-for-like inventory is down approximately 450 million compared to last year. If we go to the next slide, the operating cash flow then again is an improvement of almost 790 million compared to last year, and that is primarily driven by networking capital and more specifically inventory. Look at our report last year, inventory buildup was 1.2 billion in the quarter compared to 400 million this year, and that is the main driver of the improved cash flow. Then we move over to the final slide here, which is the net debt development, which has been very stable here in the quarter, improving from 1.7 at the end of the year to 1.6 here at the end of the quarter. With that, I hand back over to Christopher.

To try and summarize this, the heading for our report, I would say a solid start to the year, good profitability, and also on the cash flow, as we explained. So I'll say a very good start to the year. The sales, slightly negative, mostly related to trading days and very high comps. and that will now reverse as we move into the rest of the year. Good margins, solid margin, despite a little bit lower organic sales. We've been working hard to manage the margins. We will expect to continue throughout the year. Cash flow, almost plus 600 million, which is strong being in the first quarter for us. And as you all know, we're also reducing inventory compared to last year as part of the plan and as part of what we communicated for the last 18 months. At the end of the quarter, we signed an agreement to acquire Young Supply, sales of 1.4 billion. You know, very nice, strong market position, fits straight into our geographical footprint, fits very well with our other assets in the US, and also a company where DNA is coming from commercial refrigeration, so we see a lot of opportunity how we scale the U.S. now with this type of platform and also how we support it from Bayer Ref. Also in long term, the CO2 journey we were going to do in the U.S. will be part of this company going forward. And then, you know, the long term hasn't changed. This is similar, so I won't spend a lot of time. It continues to drive our business long term. We have the F gases that will continue to be phased out, just started journey in the U.S. The A2L transition will start happening in the second half of the year and of course be a good driver for 2025 and going forward. We talked a little about the U.S. platform, it continues to develop well and of course also now adding Young Supply will make us even better in the U.S. and a lot of activities ongoing that's supporting the business from private label branches and also agreements that we're working with our suppliers. I will continue to work with our acquisition pipeline. It's an active one. It's always active for us. And you can see, of course, one of the results of that is Young Supply that we just signed off here yesterday. So with that, we would like to open up to questions from the people on the call. So thank you very much for listening. And we're ready to answer your questions.