Nimbus Group AB (Publ)

We have Flipper also there and you may think, didn't they sell that? And we did, but we can still use the name for a period of time. That's the reason we still, because we are selling still Flipper. I will not mention everything on this slide, but at the end you find 2025 May, new organizational structure implemented. And this is a big thing for us. And if we look from an internal perspective, it will make us more efficient and also focused on our core business. And if we look upon it externally, it's our belief that it will be easier to follow and understand our business. If we then switch page. Then we come to commercial sales. And this new organization I was talking about, you can actually see it as we have three business legs. We have the commercial sales, which I will then present for you now. We have the retail sales that Rasmus will talk about later on here. And we also then have the operation and operations that you find the boat building, both by our own, but also the outsourced. And that is more or less included in everything we do. But if we then look at the commercial sales, sales drop 8%, similar as for the group, still small numbers and more coincident, I should say, it's not that many boats we're talking about. Important for us is that we see them more activity and we are closer to a done deal. And the proof of that then may be then that, as we say here, the improved order intake in North America. If we look below in the chart, you can see then that North America has a big jump up from the order intake perspective. But let's not forget about Europe. Europe has struggled for, I should say, two years now. And even if it's done from blue figures, we actually have doubled the order intake in Europe. And this is a really good sign for us. And the order intake takes us to the order book. And actually this chart we have in front of us on the right side below, you see that more or less the whole picture is affected by the pandemic. And that's a pity because it makes it different to relate to something we can call it real or a normal business. So I prefer then to talk about the right-hand side of this picture. And we have talked about this before during the quarters about this normalization and we can clearly see that now. We have the same pattern in the order book and we also then have this shorter order book that we have talked about before. The supply and the demand is closer to each other, as simple as that. And then of course, talking about the order book, only confirmed orders with prepayment in the order book. And that's also one thing that we implemented later on. So it also affects the comparability in this chart. The order from the Swedish Armed Forces is not included then, only the pre-series as before. But during the autumn now we will know more in what time this will be produced and then sold to the forces. And then of course it will show up then in the order book accordingly. And net sales, I will not talk a lot about that. It's more or less in pair, as I said before, the small differences and more or less than, it's very few boats that differ. So the important thing for us is that it has stabilized them. Our opinion is that we have reached the bottom and actually are now going upwards again. And with that, I'll leave to Rasmus.

Thank you, John-Erik. And then we continue with the retail sales development. The second quarter is a seasonally important quarter for the retail business because of the domination in the Nordics. For reference, the second quarter last year represented 56% of the annual sales. So that is an important quarter. Having that said, sales decreased by 8% in the quarter to 274 million. And this is due to a softer market situation and also in combination with a bit of unfavorable weather conditions in the Scandinavia, which has affected sales on both own brands and traded and used boats. We saw that the positive former trends since the second quarter of 24 was affected by the escalated tariff debate that John-Erik mentioned earlier that ended up in March, April. And that had a negative impact on the sales, especially the first half of the quarter. In total, the sales of own brand was down 4% and traded and used boat was down 11%. The ordering take turned down by 29% to 148 million versus 209 last year. And the order book amounted to 28 million versus 35 last year. The fact that the order book now is low in June is driven by seasonality effect with lots of deliveries in the period and follows the normal business cycle. So this is not strange. Then we move on with the P&L and net sales in the second quarter amounted to 571 million, as I said, which is down 8% since last year, 723. And the EMEET amounted to 25 million versus 45 last year. The gross margin reached 11.9%, which is down 3.7 percentage points. The gross margin is still affected by cost of absorption and effects from low production and low sales volume. But also from this change US tariffs of 1 million and from exchange rate fluctuations by 10 million in relation to last year. The currency effect is mostly referring to US dollars. Adjusted for those tariffs and currency effects, the gross margin reached 13.9%. The gross margin was also affected, as John-Erik mentioned earlier, from those supporting activities to reduce stock level of finished boats. So that has also impacts, of course. OPEX amounted to 42 million, which ends up in a cost reduction of 19% since last year. The gross savings are higher, but the investments to strengthen the sales organizations reduces the net savings. More savings initiatives are ongoing, which will gradually have effect from the third quarter. Regarding the restructuring provision in Finland, the outcome in the period was slightly higher than expected. In the third quarter, we expect to be able to sum up the closing costs, including the outcome of the CREMO deal. The remaining reserve in the third quarter is 13 million and six million was reversed in the second quarter. The finance net amounted to minus 27 million, and this is mostly driven by currency effects from inter-company balances amounting to about 20 million. Also, this effect comes from the US dollar. Then we move on to the networking capital and cash flow. Operating cash flow in the period improved and amounted to 90 million versus 79 last year. Networking capital amounted to 664, which is down 77 since the first quarter. And the change refers to less inventory of 129 million driven by both seasonality effects, but also from the supporting market activities. Overall, we can say that the buying lead times are longer due to market uncertainty that pushes inventory release forward in both the retail sales and commercial sales business. But on the positive side, we can also say that measures implemented to adapt production volumes to the demand now has started to give the intended effect and that the networking capital decreases. We see that happening gradually now. Available cash included unused limit amounted to 299 million versus 77 last year and 237 in the first quarter. And with that, I leave the work to you, John-Erik.

Yes, and then finally then our financial targets. And actually they are exactly the same. We have the same target. We want to have a growth of about 10% over a business cycle. On midterm, we want to have a EBITDA margin on 10%. Our capital structure, no financial debt, unless it's property, for example. And we of course want to have a dividend, so dividend policy says 30% if everything else is done in the right manner. And we truly believe that this is a correct financial target for us, but we need some help then of course from the market, but a lot of other fees is now in place for the future. And with that, I actually leave to Gunilla.

Yes, and we open up for questions. Please, go ahead.

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 Henrik Christiansen from DNB Carnegie, please go ahead.

Yes, good morning, gentlemen. A couple of questions for me. I'll start on the gross margin development. How do we think going forward on that and how does it look in the order book? And then also, how do you work with price in this volatile ethics environment that we currently have?

You can start, Rasmus. If

I start off then, the gross margin in the quarter was, as we said, a bit affected by bit of one offs to reduce the stock levels. going forward, of course, we see that this is an effect that will be reduced. But important here is that the underlying margin in the business is still very good. We see that boats delivered in accordance with order book, those we sell in accordance with what we expect to sell. So what we expect to see is that the gross margin will improve going forward. So this is a temporary drawback, so to say. I'm not sure if you want me to fill in the thing here.

Well, you covered it pretty much. But so the gross margin is of course affected by this that we're selling out, you can call it, on the value boats. In the order book, you find the premium and that is premium has a higher margin from the start, so to say. So of course, we see increase of the margin going further on. But also you asked about, I think, if I heard you right, you asked about the price adjustments. And if you look, I think it's related and maybe to the US dollar and the tariffs. We are compensated in our price list for this. So this currency effects we're talking about, it's other things than related to this. I don't know if I answered your questions there, Henrik, but please.

We can also fill in there, maybe that. Maybe I should also fill in there, Henrik, about what we said also regarding the cost under absorption because now we have reduced the production significantly, which of course also reduces the cost side and causes less variance in the production. So this will improve the gross margin itself also, but only to a certain level because volumes needs to be increased to be able to get full scale, of course.

Perfect, right. And then another question here on the order book. I mean, you've seen a stabilization here now in the last quarters. Is there an impact there from FX as well that you revalue the order book? That's the first one. And then related to that, you know, very strong sales or ordering to North America and Europe as well for that matter. I mean, could you give some color of what's driven by new dealerships added? And what's driven by, you know, like for like sales if you will.

If I start off with how we treat the currency, we revalue the currency in the order book. So here we have the sort of a negative effect in the order book, so to say. So that is how we do it. And if you wish to comment on anything, Jan-Erik, about new dealers.

No, but yeah, your second question there. Of course, it's driven by the fact that we are on board more dealerships because they will then buy certain amount of boats. But we also see them, not that it increases the retail sales per dealership, so to say, but we have more dealerships. So the retail sales follows in the same pattern, so to say, but it is, of course, also the fact that we own board dealerships.

So just so I understand that. So the underlying order book development is better than what you report, of course, because you have this negative currency effect that brings down the sector value of the order book. That is correct. That is correct. And then if you say that the improvement is 100, what is, roughly, what is driven by new dealership and what's driven by organic growth, if you will. So is the growth driven by new dealers only, or is there a share that's actually driven that markets are improving organically as well, or we're still waiting for that?

I would say that the organic growth is higher than, maybe this is 60, 70%, I would say, is driven by organic growth, and rest is driven by new dealerships.

Excellent, and then my final question here is on the dealer inventory situation, you talked about that in the past, that dealers have been quite cautious and taken on inventories, and you said that you do well versus competitors, could you elaborate a bit about that, why are you doing better than competitors as well,

please? The situation is more or less the same. We can see that, we're talking about US, for example, we can see that the US dealership, the stock levels then, is improving, it's more, you can call it, than the normalization. In Europe, it's still very low activity on that side, which meaning that we have more or less than had the stock as a boat builder, and that's not correct, of course. The good part of that is when the market gets a little bit more activity, as we've talked about, meaning that the dealership doesn't have the boat, which means that they will order it from us, and I think that's actually what we see now in the increasing orderly intake. And that is a good sign, then of course we prefer that the dealerships has a relevant number of boats in their stock. In the Nordic countries, I should say also, it's a big part of our business, we have normalized the situation, so to say, so now, maybe not everyone, but most of the dealerships has a relevant stock of boats. It's more demonstration- I think that's a good sign, I think, and I think that's a good sign for the next few weeks.

Thank you for answering the questions, and Jan-Erik, I wish you a very happy retirement. Thank you for that,

thank you for that. I will still be an owner, so I will follow closely.

The next question comes from Emil Neistat from DNB Carnegie, please go ahead.

Good morning, Emil Neistat from DNB Carnegie. I have just a couple of questions for you. First, I was wondering about the cost cuts that you announced, could you please expand a bit on these measures, what are you doing, and perhaps the estimated effects on earnings that you mentioned from Q3 onwards?

Just to be clear, you said the cost reduction program, the cost out.

Yeah, yeah, exactly.

Yes. Okay. To put it simple, we have to choose not to be too specific, so to say, but if we have an organization and we are expecting maybe the sales level of say 2.4 billions or something like that, and we see a softer market, then of course we need them to adjust, and that we did already last year. Now we get, you can say more specific, a big part of this is related to the value builds that we are ending our part of that in the industry, and that means then also that we take, you can say we take the opportunity then to streamline the company to be this premium company, that we wish to be. And talking about levels then, the target is then approximately 20 million per quarter in saved costs then, to give you a figure. Rolling 12. Perfect.

Yeah, thanks. Then my second question, you touched upon it briefly, but your operating cashflow held up quite well considering your margins, and as you mentioned, due to reduced inventories. Could you please give us some color on inventory levels moving forward, and what you can expect regarding inventory releases and so on?

We had them as a target actually then, since it has already happened, we can talk about it. But we wanted this demand and the supply to meet, and from the beginning at that point, we are in done in the, during the autumn 24, we saw that this could happen before the summer. Then we had a softer market than expected due to the global politics and economics, and especially then as I said at the beginning of 42, that made this point where they meet, so to say, to be a bit further on them, and actually it will happen during quarter three. And what we have done then is of course that we have reduced our own capacity. We are then closing, for example, then the kopioclant. We are reducing production or have reduced production, I should say, more or less in all our sites. And then quite severe them. And by that, we're starting to sell them from the stock, simple as that. So the demand is slightly higher than we actually have the capacity to build for at the moment. So that is the simple tactics behind it.

Exactly, and to fill in there, if you look backwards, the first half of 2025,

we

have come from a position where we still have produced more boats than what we could sell. So now we have changed this and we are, as we can see, gradually reducing the inventory levels. And according to our plan, we expect to do so. We expect to get the biggest impact now and from the first quarter, which John-Egge mentioned. So this is in line what we have predicted, so to say. But it is, of course, very hard to tell exactly what the levels will be, but we follow the plan that we made in the beginning of the year right now.

Perfect, that's all for me, thanks.

Okay, thank you. Thank you.

There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Yes, and we have quite a lot of written questions, all from your Liya Kjø. So I'll take one at a time. He says, great to see the reduction in networking capital. How do you see the level developing going forward, including the Bella Flipper sale?

That is related to the last question we talked about a bit. So I would say that goes back to the previous question.

Same answer. Yeah, same answer.

And if we fill in regarding the CREMO deal with the Bella Flipper, this is also expected to happen, as Javne-Erik mentioned before, during the third quarter. So those effects will be not that dramatic, I would say, in the quarter.

Okay,

and he also asks about the restructuring program. Will they cover the reserve that you have covered, the expected cost for Q3, no more one-offs expected in Q3?

According to our estimates, we are well covered, but always when it comes to these kind of items, you can be surprised, but we have done the best estimate we can. So it is our belief that we are correctly positioned in accordance with what the outcome will be. But the outcome is also dependent on what happens when some of the stockpotes related to the CREMO deal. So this is connected. But we believe that we are well positioned in the reserve.

Good, so he also asks regarding your comments on revenues being at the bottom. I think you said that now, Javne-Erik, also that you see increases coming forward. So he asks if that implies that you expect -on-year revenue increase from Q3 and onwards?

The simple answer is then, of course, yes. That is what we see. That's the signs that we are building, or so to say, we can call it forecast then. Then, of course, we have seen, talking a lot about the predictability, which is important for all of us, but maybe especially when we are producing company. And we really need that. And we have seen during, I should say, especially the late one and a half year now, that we are affected by things that happens globally today, which differs then, of course, if you look quite many years back. But still, it's immediately that you can see that the business process slows down and sometimes then quite severely. But it is our belief and fairly confident that we have reached the bottom and we now are starting the next journey, so to say. Upwards.

Great. And then here, wonders about the sales in the US. How is the sell-in versus the sell-through to dealers?

It is good statistics in US. And what we see is that soft market, as we see in Europe, US reached that point a bit later than we did. And my guess is that that is a picture we will see at least for this year then. 2026 will most probably then follow the pattern that we have seen in Europe during 25. It's hard to look through it, so to say. It's tough to predict because it's so dependent on so many things. But the business climate tells me that. So I think that's what I can answer on that one. Do you want to add something?

And

then he wonders about the sale of boats to the Swedish armed forces. Will that be started in 2026?

Absolutely. And we don't have it in the order book, but of course it's in good order, so to say. The only thing we are waiting for now, as I said, is the delivery schedule. And there is a lot of discussions ongoing. And the plan, I can say that the plan is slightly more positive than the original one that we signed. But again, we are not there yet. But during the autumn, we will know much more about this.

Great. And then his last question is regarding the Nimbus brand of sales in the US. What share of sales in the quarter was non-US produced Nimbus boats?

That was a very low percentage. Edgewater and the Nimbus is the absolutely dominating brands. So non-Nimbus or Edgewater branded boats. Oh, but

the Nimbus branded, but not produced in the US, I think.

Okay.

Yes. The Edgewater had a strong quarter, but at the same time, it was quite, we don't follow this figure as you understand, but we sold quite good of the smaller Nimbus and it's the smaller Nimbus that are built in US. Grasmus is checking.

So please. I don't have the figures in front of me, unfortunately.

But it's still a good portion of- It's a smaller. Yeah, but it's still a good portion produced in Europe because for example, we started to sell the 495 during quarter one in US. And that has started really well and we have sold a couple more of them. We still haven't delivered that many. I think it's maybe three that is delivered to US, but that of course affects also. It's a lot of money. Yeah, that's right.

Okay then. That was all the questions that we had. So I really would like to thank you all and remind you that our third quarter report will be issued on the 23rd of October. So thank you and thank you Jan-Erik and Grasmus.

Thank you. Thank you.