Bergman & Beving AB (publ)

Welcome to the Bergman Beving Q1 2026 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. If you are listening to the presentation via webcast, you can ask written questions using the form below. Now, I will hand the conference over to speakers CEO Magnus Söderlein and CFO Peter Schoen. Please go ahead.

So good morning everyone and welcome to the presentation here of our financial report for the first quarter fiscal year 26-27. So I'm Magnus Södlind and I have also Peter Schoen here on the side. Hi everyone. So just to give you some highlights from the quarter. On the underlying market, the key things are two, I would say. I mean, we see some effect of the Iran conflict in rising raw material costs and energy prices and also in freight costs. And that is something that we had great focus to manage during the quarter. So I would say all the companies that are affected of these kind of increases have proactively worked with price adjustments. And on a group level, I would say we have been successful in doing so. So we don't currently see that we should have any negative effect of this, at least on the short term perspective. If we look at the market, we are, you know, 40% exposed to the construction industry, then mainly in the Nordic and the UK, and then 60% of revenue is to the industry segments. And both of them are current that we still we feel are cautious. We don't see they are declining, but they're not increasing in a big term anyway. And we had some positive signs in end last calendar year. But our kind of hypothesis is that the Iran conflict has partly put some damp on the recovery of the industries. There are some good signs in the construction area, but we don't see those kind of investment increases yet in the business we are running, but hopefully we should see that in the coming quarters. Still, we are able to increase earnings, increase margins and returns and also earnings per share. So if you look at the turnover, we had 1% organic growth. This is the third consecutive quarters with some organic growth, even if there are small numbers. So that, I think, is a good kind of sign that we have reached the kind of bottom of the kind of underlying market development and we hope then to see a continued growth going forward but still in low numbers. So we increased the EBTA with 9% and we now had 26 consecutive quarters with improved profits. And also we continue to improve the EBTA margin so it's now 10.7% above 10% and that is an improvement with 0.8% units compared with last fiscal year same period. And we also continue to work on improving the returns, measured as profit or working capital as well, KPI. And we continue to increase that and we reached 37% this quarter. And this is a rolling 12 number. So underlying, if we look at the three-month figure, it's even higher than that. So we have a positive momentum in in the profitable working capital ratio. And I expect that to continue going forward. And we had an earnings per share role in 12 improvement from 8.2 to 8.5. So all kind of our key parameters is moving in the right direction. And that's, I think is very positive despite that the market is still quite cautious. If we look at acquisition, this is the rolling 12 situation. We acquired one company in the Q1 quarter, All Coating. It's a Swedish company. As you see, we have been quite active in the UK during the last 12 months. So this was the first acquisition in Sweden from some time. And this is actually an add-on acquisition to Yveco, one of our platforms, working them in the coating segments. If we look at overall the acquisition situation, I mean, we still have the ambitions to acquire in the range of 50 to 80 million EBIT per annum. And that is something we aim for doing this year as well. Even if this acquisition was quite small, it's 25 million, but the profit is very, very good. But still, of course, we need to do additional acquisitions going forward to keep up that path. But that is still in the target to do so. I showed this before, and this gives you kind of the historical perspective. As you can see, we had this positive EBITDA growth. We also have this positive trend in the EBTA margin. As I said earlier, we are aiming to continue improving both the profit and the profit margin over time, even if some specific quarters may not have an increase. But over time, we should see a continued development like we see on this picture in both margins and profit in absolute terms. So the debt sales, as I said earlier, we had 1% organic turnover growth. We didn't have any currency effect in this quarter. You who have been following us for some time know that we made some divestments The biggest one was the Skydda Nordic operations, but we also divested Luna Baltica. And we also, earlier than that, divested the fastest development in Asia, even if that is not a part of this comparable period. But it's here you see the Skydda and the Luna Baltic effect that then the combined acquisition and divestment had a negative effect of 1%. So on the total it was a zero quarter compared with previous year. The gross margin, we had a steady positive development as you can see on this slide over time in the gross margin. I said it before, it's mainly organic driven. Even if we only acquire highly profitable companies, it's not per definition that they have a gross margin above 50%. So this improvement that you see is mainly organic driven. And that's also the case in the last quarter here. And we now have three consecutive quarters with a margin around 50%. I said it before, this is also a positive effect of the divestment we've done. So it's not per definition that new acquisition will enhance this development over time. But still, we are not happy really with this level. So I expect some improvement over time. Even also, it's not kind of big numbers and you see that as a development over time more than as in specific quarters. And the divestment and also the acquisition, as you can see on the right part of this, has brought us to 82% of our own product companies compared with 72% some years ago here, two years ago. We had had a positive development also in the MEX that is partly the explanation for the gross margin trend. So if we look at the group level, we set the target to reach profitable working capital of 45%, an EBIT of 500 million and an EBIT margin of 10%. We continue to improve and work towards those targets. As said before, we had hoped all it to be, at least on the EBIT and EBIT margin on those levels, but then we had expected the underlying market to kind of be stronger than it has been during the last quarters. But we expect to have a positive effect when the underlying market starts to pick up because we have now a higher gross margin. On a group level also, we have lowered costs organically, costs that we don't see we need to rebuild when the market pick up. So we should have a good leverage with the good and higher gross margin levels in combination with a more effective cost effective operations. And the top line then will be very good contribution to the margins and to the EBIT in absolute terms, and also then, of course, to the profit of working capital measurements. So we are still having those targets at sight, and we continue to work on that, but we need to get some help of the underlying market to get there in the coming quarters. So I will then hand over to Peter to talk about the earnings per share development and some other topics. Thank you, Magnus.

And earnings per share continues to improve. Rolling 12, it's increased from 8.45 to 8.50. And there is a slight reduction in the quarterly EPS. And that's mainly caused by slightly higher interest costs and currency revaluation. But still, we're on an EPS growth path going forward. If we look at the inventory levels, we do have a lower organic reduction, as we said, for a few quarters now. We had a quite high organic reduction rate going back a few quarters, but now it's a bit slower. The organic inventory decrease is 18 million. in the quarter, and it's affected partly that some of our companies have decided to increase their safety stock. As Magnus said before, it's a bit turbulent in the wake of the Iran crisis. So they have decided to increase their safety stock somewhat. And that of course also makes the reduction rate a bit slower as well. And that also reflects on the ITO. It's relatively flat and it's negatively impacted also from the divestments that we've made. So both divestments and the increased safety stock has influenced that one, so. But the work still continues. We do have some stocks to reduce going forward, but we'll see how it plays out with the safety stock. But it's not on the level that we had in COVID or so. It's just a slightly bump up in the safety stock. The cash flow was more or less according to plan. It's normally a quite strong quarter. So it was this quarter as well. So not much to say. As I normally say, it's the Q4 we have quite a bad cash flow. And it's based mainly due to SV spring order. that they get paid now in this quarter and the coming quarter. So this is a normal seasonality pattern. But as we acquire more and more companies, of course, this seasonality pattern will be more spread out, I think so. But yeah, according to plan. And We decreased the net debt, mainly due, of course, to the good cash flow. So we decreased the net debt by 100 million in the quarter. And the net debt EBTA is back on the same level as it was a year ago, so 2.5. And from that point one year ago, we made acquisitions of 550 million and divestments of 280 million. And as Magnus said, we just made a smaller acquisition in this quarter, but the acquisition target remains intact and we have a good pipeline as well. So we will continue on that path going forward. So I think back to you, Magnus.