Beijer Ref AB (publ)

Welcome to our Q2, and thanks for calling in. So we will move over to the next slide. So VARF, in brief. I think there's no news here, really. We continue to grow, as you can see. We're now in 45 markets around the globe, which I'll come back to a little bit later on, because it's giving us quite a nice balanced view on the world, being in so many different places going forward. So moving into the next slide, highlights for Q2. I would say a very good quarter there in almost all categories. We're coming back to a nice organic growth after three quarters on the negative side and also related to, as we said, the energy situation in Europe a couple of years ago. So I would say come in as expected. Acquisition continues to drive very good value for us and they continue to develop well. Continue to have a good pipeline there. So very nice development for us. You put that all together and our sales grew 12% in the quarter. which we're very happy with. Then on the side, on the margin side, continues to be strong. Record margins in the quarter and record margins ever for BRF. And you can see the trend there looks very good. And it's stable across both EMEA and the U.S. I'll come back to. And then a very nice trajectory in APAC that we have. work a lot with to develop the margins. Cash flow positive in the quarter as we committed to. We continue to balance our inventory. We are usually not a positive cash flow Q2 as it usually is released in Q3, Q4. But we'll continue to have this trend throughout the year as we normalize our inventory levels. We did close the acquisition of Young Supply in the US. We'll come back a little bit to that. And then we have an acquisition pending on the leading HVAC distributor in Hungary that needs to go through the competition authorities. We'll come back to that a little bit later as well. Next slide. Here you can see the product groups. We turned positive on the HVAC side. It's becoming with more normal comp there. OEM continues to be strong, especially in the MAEA segment. We'll come back to a couple of key orders that we achieved during the quarter that were extremely positive for us. Then the commercial industrial refrigeration is stable in the quarter. Worth mentioning here is that our focus on the the Sinclair Inventor continues to do very well and continue to outpace the rest of the growth. Next slide. To go in a little bit more in detail, so on the MAAT side, a fairly stable development during the quarter with very good growth in our very focused OEM segment where we are transitioning into the green refrigerants that we expect to continue to do very well in the future as well. Mentioning that segment is that we did take two, we would say, key orders. One, we took our first order in the U.S. of CO2 transcritical systems, and there is a lot of things happening in the pipeline for our solutions in the U.S., and it's also a nice collaboration between Our platform in the US and SDM Frigo, they will continue to develop air over the years. So it looks very interesting for us to continue the journey that we've done in EU, Australia, New Zealand, now into the US. So very nice to secure these first orders. And then I think also worth mentioning our company, Fenergy, who does both cooling and heating solution based on natural refrigerant, but more bigger solution. They did win a first breakthrough order the data center where you connect the data center with the district heating. So you do both the cooling and the heating in our system. So very nice reference order for us and looks interesting for the future. So happy with EMEA development. I think the only thing about EMEA is that it's been a fantastic weather in our key countries, France, UK, the Netherlands, and I suppose the market has been a little bit slower. to see if it picks up here in K2. But instead of talking about very good development in Eastern Europe and further down South in Europe as the weather has been very strong. And that's where I come back to a little bit that the breadth of the number of countries we have in our portfolio balances out much more of the business and can still produce a growing business in EMEA despite not having a great start to the summer. Then moving into APAC. APAC continues to grow. Of course, been very active on the acquisition side. Good growth in all of our segments. And I think worth mentioning is the continued improvement of the margins. As you know, in APAC, a lot of acquisition we do at a lower margin, and then we, through our synergies, develop that and we'll continue to do that going forward. happy to see the trajectory there's a lot of activities both on purchasing but also on the private label side of the business i think worth mentioning is that in a country like australia where more and more of the business is banning gas we see more solutions moving over over to the ducted and heat pump solution uh more parts and bigger orders for us so it's the beginning of a of a trend and I expect to see more and more that has moved through the next couple of years. So very happy with the development impact here in the second quarter. Next slide. Moving into the US. Fantastic growth of 34%. I mean part of that journey that we started on with the US about a year and a half ago with a fantastic platform and heritage that continues to developed very well. Plus the opportunity to add on acquisition the latest young supply. Nice strategic fit on the refrigeration side. Already a lot of activities on expanding refrigeration in the rest of the platform. Good activity level in the U.S. Nice, you know, they will have the opposite of the weather in some countries here with good weather in our key states. So very happy with the U.S. continued development, good margin development as well. Opened a branch here in Q2, we'll open a couple more in Q3, also launching our private table. So a lot of activities in the U.S. and the platform is developing very, very well for us. So happy with the development in the U.S. as well. Moving on to the next slide. So in summary, 12% sales growth, organic growth of 2% and UBTA growth of 13% and EPS increased by 2%. You'll come back to more detail on that. Next slide. Here you can see a little bit more of the breakdown on the organic M&A and FX growth. And moving on to the next slide, we see the sales development continue to have nice growth. And here you can see also, of course, that we trended over to organic growth again, as we expected, and good acquisition growth as well. And that position looks good for the rest of the year and into next year as well. So I would say a very good development. And moving over to the next slide. Here you can see the quarter rate development on EBITDA, 13%, and also, of course, the margin that's been very strong and continues to be in a nice trajectory for us, as we said before, near to date. EBITDA growth of 10%, slightly improved in margin. So in total, there is a very stable development. for BRF and in line with our expectations. And then moving over to the next slide where you can see the margin development over the last couple of years, and you can see the trend here. Of course, our Q2 is our strongest margin quarter in general, and you can see that being in line a little bit better than last year, that was a record year as well. So the seasonality plays into the margin as we sell more When it's hot, and of course, moving into the US, they will have the same type of seasonality as we have in Europe as well. So a very good trajectory and a good development on the margin side that we're very, very happy with. So with that slide, I'll turn it over to Joel, and he goes into a little bit more details on the financial.

All right, thank you very much, Christopher, and good morning, everyone. I will jump straight into our reported EBIT, which is just shy of 1.1 billion SEK, up 13% compared to last year. Below EBIT, I'd say it's a pretty clean quarter in line with expectations, with a net financial expenses of 139 million and a tax expense of 230 million, which is representing an effective tax rate of 24%, all in all resulting in a net profit of 728 million, which is up 2% compared to last year. Just coming back to the increase in net financial expenses compared to last year, it's driven by increased debt and higher interest rates, approximately expanding 50-50 each. There were some more positive FX effects last year as well compared to this year in the financial net. So moving over to next slide, just short on the EPS, as already mentioned, it's up 2% in the quarter and adjusted for the same number of shares. The year to date number is down 4% so far. Moving over to our cash flow, Q2 operational cash flow of 354 million, as Christopher said, despite the negative seasonal effects from networking capital. It's mitigated by a continued controlled build-up of inventory. Build-up of networking capital in the quarter, the 728 million, is primarily driven by AR Of course, for the higher sales in the quarter. Overall, cash flow is 550 million better than last year, driven by improved EBITDA and less networking capital tied up compared to last year. If we look at the year-to-date numbers, cash flow of 936 million, which is 1.3 billion ahead of last year, on approximately 1.2 billion lower additional working capital tied up than compared to last year again. And worth mentioning here as well, our reported inventory is more or less on the same level as last year, but adjusting for the acquisitions we have made and also FX fluctuations. The underlying inventory is down approximately 700 million compared to a year ago. Next slide. Net debt development. Net debt increased by 1.7 billion compared to Q1, driven by our acquisition-related activities, primarily on young supply. On that, net debt in the quarter adjusted for leasing and pension increased to 2.06, up 0.4 turns compared to Q1, and just below same quarter last year. And with that, I'll hand over back to Christopher for a summary.

Thanks, Joel. I think a great summary is a very strong quarter, no surprises, good development across our different regions, APEC, EMEA, and then the U.S., of course, very happy with the U.S. development. As we can see, the platform is developing as we want it to, and a lot of opportunities and activities in the U.S. It's going to happen in the future as well, but the foundation is very strong. So happy to report a good margins across the board record levels, which shows the work we're doing is very appreciated both by customer and our initiative is increasing, improving margins. We continue to work with our inventory to normalize that by the end of the year. So we're in the journey. of that and it's going according to our plan. So everything there is under control. Acquisition that we've done has been fantastic on the arms supply, very strategic for us. We also look forward on the call for you as we go through that process. And then the pipeline continues to look positive for us. And also based on an expected good cash flow generation here through Q3 and Q4. to give us good firepower in that process as well. So a good summary with a record quarter from Bayref and turning back into organic growth that we're very happy to do as well. And long-term, I would say not a lot of big changes. Everything is moving forward on the sustainability, electrification, regulation. You have the FCAS that's accelerating in the EU. We have the HVAC, as you know, becoming more and more active on the health floor for next year. I think added here, of course, we're very happy on the first CO2 orders in the U.S. and also an affinity order for the data center that we look forward to being more active in over the next coming years. We talked about the U.S. platform and our initiatives are going well. The pipeline looks very good. So all in all, a nice order to finish off the first half of the year. With that, we'll open up for questions.