Bulten AB (publ)

Hello everyone and welcome to this presentation with Bulte. Axel Bernsson, President and CEO, and Anna Åkerblad, CFO, will present the Q2 report for 2025 and answer questions during the Q&A. If you're calling in, please press star 9 to raise your hand and star 6 to mute yourself when you get the word. You can also use the form located to the right. And with that said, please go ahead with your presentation.

Thank you. Welcome to our Q2 presentation. We have a fairly short agenda for today, so we give you a summary of Q2, a quick view of the market development, and then we go through our financial results and then we sum up and talk about the future in the end. So with that said, we move on. If we sum up our second quarter, I would say that it was broadly in line with both the prior year and previous quarter. I think this is quite good given that we saw softening volumes from the automotive sector, while at the same time we did see a strong improvement in our medical technology and consumer electronics segments. So it's nice to see that we are able to maintain margins even though volumes are lower. During the quarter, we've spent quite a lot of time with our strategic review and we have launched a more detailed process and program around that, where we are focusing on our footprint, on our organization, and how we allocate our resources for the future. If we look quickly about the markets, we usually show a few slides on the automotive sector, but I do foresee a soft market with zero or slightly positive growth globally, which is a little bit driven by Asia, while European and North American markets will be very low on growth. However, we do have other areas that we focus on and will focus more on for the future. So if you look at medical technology and consumer electronics, those markets actually have a quite sound underlying growth and we are fairly competitive here and have very good margins. So this is an area where we will put more focus for the future and that is developing very well for us. Move forward, I'll leave over to Anna to give you some financial highlights.

Thank you Axel. And here is an overview of our quarterly sales the last years, including 12 months rolling sales. And sales volumes for second quarter was down over 8% versus same quarter last year. And this is following our customers pattern where some of them did not produce for export due to global customs discussions in the beginning of the quarter, which is also reflected in the order intake. However, our sales is still on a relatively stable level in a more volatile market. And in this waterfall, you can see the change in rolling 12 months sales for different customer groups. And there is a positive growth in other industries, the slight decrease in the rest of the customer groups. And the customer group other industries has with this increased sales with 9% compared to last year rolling 12 months. And as a proportion of rolling 12 months sales, other industries outside automotive amounts to over 14%. And this is an increase compared to last year when it amounted to over 12%. Our main customer group OEM Life Vehicles amounts to 61% and is in line with last year. The second quarter delivered an adjusted EBIT of 69 million SEK, which is equal to .2% EBIT margin. And the quarter was in line with both last year and previous quarter. Adjusted earnings per share for the quarter was down to one SEK and 3.1 SEK for the rolling 12 months. Looking at the cash flow and net debt, we have amortized debt with cash and hence the negative cash flow from financing activities. Cash position is lower than last year's quarter, but in line with end of last year when taking out the change rate effect. Net debt excluding lease liabilities is higher than last year, but more in line with year end. Our adjusted P indicators for rolling 12 months are in line with last year or slightly below. The adjusted net debt in relation to adjusted EBIT is in line with last year at 2.3. Our guideline for average net working capital in relation to 12 month sales is about 20-25%. Depending on growth pace, at the end of the quarter, our rolling 12 months are at a level of 16.7%, which is a good level and in line with last year. CAPEX as percentage of sales is slightly above our guidelines. This is related to catch up of previous years where CAPEX were held at a low level in combination with timing of completion of larger production equipment and efficiency investments. Depreciation as percentage of sales is in line with our guidelines. Now back to you Axel.

Thank you, crisp and quick. All right, so if we sum this all up then we can see that our net sales declined by 8.8%, but I would say that through this discipline cost management and very good control of our operational expenses, we were able to keep EBIT in line with last year. Even though we did see a decline in the passenger vehicle segment, we are quite happy with that. We have had quite a few wins in both in Europe and Asia in our more higher margin businesses, particularly in C-PARs, micro screws and with VMI solutions. I think this is a good step forward for Bullton where we're winning in the areas where we make more money and that is kind of positive for the future I would say. If we then take a quick glance of what we are now spending our time on for the rest of 2025, the first thing is to sharpen our focus on the high growth, high margin markets like we just saw on the previous page and that includes then the medical technology and consumer electronics businesses and also into more niche products where you have an opportunity to have higher margins as well as when you do more value-added services towards your customer then you create more value and you have an opportunity to make more money. This is very much in line with our ambition to grow beyond the automotive sector and increase our profitability long term. Secondly, we are spending a lot of time at the moment to define how to best evolve both our incentive, our governance structure and overall organization structure to support more of a decentralized, customer-centric model at Bullton. Thirdly, we are reviewing our footprint and a lot of other topics. Basically, what we want to do with all that is to create more financial strength so that we can invest in acquiring more companies and having a profitable growth for the future. For that we need firepower and we are spending quite a lot of our time to analyze different opportunities to realize that basically. I think that's what we had for you today as a presentation. With that I leave over to questions.

Thank you very much for that presentation and yes let's open up the Q&A section here. If you're calling in please press star 9 to raise your hand and then star 6 unmute yourself when you get the word. You can also use the phone located to the chat and we'll start with the first question here or we have Mats Lis from Kepler Chevrolet. Please go ahead you have the word.

Okay, hey thank you for taking my question. Well you mentioned the order in take during the quarter were sort of affected quite substantially during the beginning due to global tariffs and then sort of the head release during the quarter and you finished some of that there I guess. Could you say something there about how you have third quarter have started now or maybe also if you expect it to be more in line with previous quarter I mean somewhat seasonally affected by the holidays and so on.

I would say in general Q3 is a weaker quarter most years historically due to shutdowns at our customers plants and so on for a lot of maintenance and things like that. But that aside most of the drop that you saw on order intake which is a quite big drop the vast majority of that is from one customer that decided to stop deliveries to North America in the beginning of all these custom duties changes and insecurities in the beginning of the quarter and that customer has now resumed all the production and is producing at full speed again which means that that big drop isn't real if you say for the long-term volume what we can see in the projection from the customers they remain on the same plan as they did before the custom duties started to arise. So we are not today we don't see major concern around that.

So yeah great so it seems that things are moving somewhat better. Then well looking at the gross margin it's sort of improved there and I missed the reasons why but but I guess it seems that you have a pretty good rising I guess and maybe also if you can touch upon the the mix change there if that also helps the gross margin the mix change towards

non

-automotive

segments. Yes in general the non-automotive segments have significantly higher gross margins than the automotive and over time as we go that that portion we should expect the higher gross margin in the business. Good

then well maybe also coming back to the tariff impact could you shed some more light on how that could affect you given the the current indications of the tariffs well US tariffs on European importance.

I think on the European business it is no major impact but we do follow I mean you if you follow the large customers that we have and you see their volume projections and their volume deliveries we kind of follow that in Europe as most of the business that we have in Europe is automotive and a lot of is is like passenger vehicles so we would follow those trends and there's no major effect from tariffs on that yet but there's some if you look at Volvo I think they were down nine percent -to-date overall in their volumes we are down slightly less than that year to date but it's we follow that trend. If you look at our Asian businesses we haven't seen a major effect on that yet but it could be affecting the future if there's a lot of production that would move to the US. I don't foresee the consumption in the US will go down dramatically and I do foresee it would take quite some time for all this manufacturing to move elsewhere so sooner or later that volume should should still be there if you if you will.

Great then well the other lines there in the P&L the tax rate is still a bit above but I would like it to be could you say something about that?

Of course it's our procedure is that we do not take into account the deferred tax losses carried forward so when we do that calculation we are at a healthy level as as normally at around 25 26 percent so that that is the reason why and we we are confident that it is it is at a good level.

So going forward or should we expect 25 26 percent more than the current level?

That is when we we do that calculation of I mean we have this really when we do the adjustment but we we do not take that into considerations in in the calculation during the other quarters as well so we we will when we do the calculation adjust it then it will be around 25 26.

Okay great and finally just this non-controlling interest there could you could you just shed some light on what they are what they are about?

Well we have JBs that is in that line and we have JBs in in different countries so we have both in Asia and we also have in in Europe and and those are are what what you see in that line.

And the current level is sort of

the

ground rate to be expected going forward.

Yes yeah

yes at the moment that is what we expect. Yeah all right thank you thank you very much.

Thank you

thank you much. Okay we'll take the next question here. Can you quantify how much cost you might be able to take out based on the on your review of the footprint etc?

Well practically yes we could but we do not want to disclose that yet once we are done with the organization have chosen the scenario that that we are are that we will implement then we can go public with the effect of that but I do not want to disclose that today.

Okay thank you. Could you give us an idea for the rest of the year in terms of the sale based on your order book and also margins?

Unfortunately the answer here is quite boring and so we don't make any financial projections and therefore we will not I cannot answer that unfortunately.

Okay thank you and what are your expectations of net debt levels at the end of the current fiscal year in absolute number if possible?

I think the same answer here is given that we don't give any financial projections we also don't give projections for that.

Can you elaborate on the strategic agreement with the tier one supplier in Europe and what kind of any potential does this VMI model represent?

Unfortunately the same here given that we don't disclose that I cannot give you the numbers but it's a very significant customer and the VMI part will likely over time be all of that business will be with the VMI solution over time and this is an automotive tier one to an automotive OEM where we are having a lot of business and we're happy that we also then get directed into their supply chains to help them with that as well. So the business as such is very nice and we are confident that it will be contributed to our profit over time as well.

I will take one final question here. How do you envision Bolton's competitive position evolving over the next three to five years especially outside the automotive sector?

Yeah I know a lot of people are curious about this and as we have said we will come back and give a presentation over strategy going forward when we are ready to do that which would be during sometime during this autumn but I do foresee that we will compete with a very customer-centric business model and that I can say and that we will be quite decentralized and try to be very very close to the customer and run our P&Ls close to the customer so we can be very quick very service oriented and be a very very good supplier to them that would be kind of the heart of it but more than that I do not want to disclose today.

Okay that concludes today's presentation. Thank you very much Axel and Anna for presenting and answering all our questions and thank you everyone who joined us today for this presentation with Bolton and I wish you all a great rest of the day. Thank you very much. Thank you. Thank you.