Clemondo Group AB (publ)

Hello and welcome to this report interview with Clemondo. We have with us both CEO and CFO Jesper and Jeppe who will present Clemondo in the first quarter of 2025 and then we will end with a question time. The questions there are mixed with my questions and you as shareholders who have sent in questions to me. Och med det, då tänker jag att jag lämnar över till er, Jesper och Jeppe. Så får ni köra presentationen över Climondo och kvartalet.

Tack så mycket, Hugo.

En presentation som det känns fantastiskt skönt att hålla 2024 ett omställningsår. Nu ser vi att det vi gjorde 2024 bär frukt. Det bär inte frukt lite här och där, utan det bär frukt i samtliga marknadsområden. Och vi levererar 12 procents tillväxt accelererande i kvartalet. Så tror jag inte det har varit lättare att presentera en kvartalsrapport någonsin än vad det är att presentera just denna.

Om man går igenom kort om Clomondo för eventuellt nya tittare.

I'm going to go through the performance of our four market areas. Jesper and Jeppe will talk about important events, key financial results, and then I'll sum up the results.

Four market areas.

Medical care, which is our largest area. It's about washing people and equipment in healthcare. The vehicle is about Hjälper våra kunder att tvätta tunga lastbilar, personbilar, tåg, flygplan. Industri handlar om att hjälpa våra kunder att tvätta industriell utrustning. Och så har vi kontrakttillverkning. Våra varumärkeliv är det som många har sett när man har råkat vara på vårt centralen, Medical Care. La Hague är vårt fordonsvarumärke och Strövels är vårt industrivarumärke. Parallellt med det har vi Marknadens hållbaraste erbjudande i Greenium innebär att vi kan erbjuda våra kunder att tvätta med växter, kan man säga, istället för tvätta med petroleum. Och även om hållbarhet inte är på allas läppar just idag, så är det fortfarande många kunder som tycker det är fantastiskt viktigt. Och det fortsätter att växa trots lite motvind i ekonomin där ute.

2024, ett omställningsår. 2025 will be a year of profitable growth.

There has also been a challenging market. Here you can see the energy barometer from ICEM, which is general. But if you look back to the end of 2021, we have not had growth in the market except for one quarter. Och det är alltid lite mer utmanande att skapa tillväxt i en minskande marknad. För 2024, lite kort sammanställning av vad vi gjorde för att ställa om till lönsam tillväxt. Under början av året skapar vi en ny lägenhetsgrupp med nya kompetenser. Vi bestämde att Medical Care är vår huvudstrategi. Det är vårt budspel för tillväxt. Vi har lytt vår största produktfamilj inom Medical Care till medicinsteknisk produkt, vilket innebär att den får högre status, där är färre konkurrenter och där är högre betalningsvilja. Vår fordonsaffär har vi tillsatt en ny ledning för vår fordonsaffär och vi har lagt en ny strategi. För industri har vi tillsatt ett nyt team och vi har breddat vårt erbjudande till kunderna.

och vi har bestämt sett förstärkt välkåren.

Tänkte titta då på hur det slår igenom i Q1, det här omställningsåret, i våra olika affärsområden, och börja titta på Medical Care, där vi länge har legat i en fin tillväxtkurva. Vi har ett hopp under pandemin, men å andra sidan en väldigt jämn och fin tillväxtkurva. Vi kan säga att förra året växte detta område med 6 %. Q3 växte det med 8 %. Nu under Q1 axlar vi det ytterligare till 9 %. Vi har också kommunicerat ett nytt avtal med Västra Götalandsregionen, vilket innebär att vi kommer att addera 12 % tillväxt till detta affärsområde från och med den 1 maj. If we can keep the 9% and add the 12%, the growth rate will be incredibly high here. 50% of the business is classified as medical technology, which means that there are quite good entry barriers. There is limited competition. We sell to healthcare. Unfortunately, people get sick even in bad times. So there is a connection depending on this business. Industry. Här lever vi på den gröna återindustrialiseringen. Samma ser vi här. Förra året lyckades vi växa denna affären med 14 procent. Under kvartal 4 accelererar vi upp det till 19 procent. Under Q1 är vi uppe i hela 43 procents tillväxt i vår industriaffär, vilket får anses vara riktigt höga fina siffror. Our vehicle market, we had 60% of our business in relation to car dealers. When the new car sales drop, our sales drop as well. New strategy, intensive change and improvement work, working with other segments in the market that are not as dependent. If we look at the first half of last year, we lost 24% on top line, which is dramatic figures. Andra halvan kom vi ner till minus nio, och faktiskt en procents tillväxt i december. Och i QDF nu fortsätter kurvan till tio procents tillväxt. Så här hoppas vi ju att det här är en, eller vi är trygga med att detta är en vändning som kommer att hålla i sig. Och även med kontrakttillverkning, det är ju produkter som vi bygger eller tillverkar åt någon annan med deras varumärke. Vi kommer inte att redovisa något mer om denna affären än volymen.

Och då lämnar jag över till dig, Jesper.

Tack för ordet, Jesper. Ja, den här kurvan är en sammanfattande kurva över det Jesper har informerat om här. Vi kommer från en oerhört kraftig inflation som tog fart 2022. Den blev extra kraftig för bolag som valt en grön inflation. In Q3 and Q4, we had a small growth in both of those quarters, and then here in Q1, the with 12% growth. Three of them grow with 9-10% growth and one with 43% growth.

So it's a fantastic curve here.

When it comes to important financial events during Q1, we have the press release on our allocation decision for 4 million kronor for the Western Gothenburg region, where we deliver hygiene products. Det avtalet utträder i kraft nu första maj här, och så bör vi leverera på det avtalet, så det kommer att hjälpa våra siffror framåt nu här från första maj. Vi uppgraderade ett medicintekniskt produkt. Det var ett oerhört tungt, stort, omfattande projekt som vi inledde förra året, och som vi också fick i mål, och så vidare. Och i samband med det så bytte vi även namn på vårt hygienområde till Medical Care. Vi har också uppstaterat strategin med fokus på Medical Care som en tillväxtmotor för bolaget där vi tittar framåt, vi tittar på andra marknader, etc. Tittar vi på våra siffror här så Topline har vi varit igenom glädjande en tillväxt i det 80 miljoner kronor som vi har landat in We have introduced that our gross margin has increased, and we have also increased our rate of growth from 37.1 to 38.5. This means that our margin is increasing by just under 4 million. It's a combination of the volumes and the improved rate of growth. But in the future, the costs of movement will also increase somewhat, because we see that it is a phase of the number of employees, consultants, and the various projects that we are involved in. So it is in line with what we had expected. If we take our operating costs through a gross profit, then they are 73% in this quarter. Last year, they were 78%. That means that we get a significantly better exchange rate on our fixed costs. This leads to our EBITDA rising from 5.7 to almost 8 million. In percent, we reach our financial goals here, up to 10.3%. Vårt resultat efter skatt, det förbättras med cirka 2 miljoner kronor i detta. Vi har en god soliditet, 52%, tidigare 59%. Vem av ordning kan fråga sig, okej, hur kan soliditeten gå ner när ni har tjänat mer pengar? Det gör det för att vår balansomslutning har ökat. Vår balansomslutning har främst ökat för vi har ett nytt hyresavtal här i Helsingborg- It's been extended for 36 months, about a million a month. So when it's handled under IFRS, the balance is increased. And thanks to that, the solidity drops a little. The capital itself has increased over time. It also implies that the debt rate is a little higher, 0.9 versus 0.7 last year. This is also the result of this extension of the rental contract. The cash flow has also been consistent in this quarter, 5.7 versus minus 0.2 last year.

So in terms of numbers, it is a very consistent quarter where both the cash flow and the cash flow have been consistent.

Världs- och finansiella mål, minst 12% tillväxt på råvaruhälften organiskt. Det är inget förvärv under perioden, och vi når 12% tillväxt, så det är dubbelt upp mot vårt finansiella mål. Det betyder 10,3 vs 10%, och soliditeten, för er som har följt oss sen tidigare, ja, den hanterar vi med gott mått här på 52,5%. Thank you very much.

As I said before, 2024 was a year of change and was proactive in our business. 2025, strong growth started, sitting at 12% in accelerating growth. We have been clear that geographic expansion is high on the agenda and that increased investment in medical care is prioritized. I think the only weak point is that we should have come further. But it continues intensively. It takes two years to reach the church and we haven't found the right partner yet. To sum up, Medical Care delivers growth. Here we have a large focus on geographical expansion. Growth accelerates in this area. In the end of 2023, industry will deliver growth, and growth will accelerate. It is very nice that all the improvement work we did in 2024 is now in progress, and we are back in growth. Lönsamheten följer med på ett väldigt fint sätt i siffrorna. Det beror på att vi har ett logaritmiskt förhållande till omsättningen. Med det menar jag att omsätter vi 275 miljoner så tjänar vi ungefär 10%. Så tjänar vi en krona för varje 10 krona. För varje tillkommande 10 krona så tjänar vi mer än en krona. Ju mer vi säljer, ju högre blir lönsamheten. Och förvärv, nämnde jag, det fortsätter. Och vi har fått stöd från ägarna för en breddad förvärvstrategi. Och det var sista sliden. Och med det så sa jag att det var väldigt trevligt att få presentera detta kvartal. I princip alla siffror är där de ska vara.

Tack. Thank you very much for that presentation, Jesper and Jesper. It must feel very nice that it was the first time that all three of the goals were green. Yes. And I think this is also the first quarter when you have divided the segment in a slightly different way. So it's medical care, it's vehicles, it's industry, and then it's also contract manufacturing. Before we get into this in more detail, can you describe what the difference is? What is the difference in medical care compared to hygiene? And where do the revenues come from?

If we look at medical care, when we move up in the value chain product-wise, then you typically get higher margins and less competition, and you get higher entry barriers. So we're going to move upwards to increase the margins. If we look at contract sales, it has a different logic. It's a price-pressed niche. But it can be that it's a sales where you have an investment of one and a half shifts on a line. And then you get a nice economy and fill up the last half with production. So it's really about balancing production and finding optimal numbers and placement in the factory, which is their logic. And there you will never have gigantic margins. It's not their function, so to speak.

No, exactly. It's like a bucket in production. And if you think about it, why... If you compare it to earlier times, it looked like medical care, there was the turnover unchanged. But it dropped a little bit in the vehicle and industry parts. So I interpret it as the two business areas that have become, or parts of the two, that have become the contract management. Exactly, that is correctly understood. Yes, then you have a little knowledge of how to think forward here when you see the changes between the quarters. And if we start with the vehicle, then I interpret it as that now it is only your own brands that you sell in this segment, is that right?

I don't have an exact figure, top of mind, but a good bit over 90% are our own brands. But sometimes you bring a supply, sometimes a pump is needed and we don't supply pumps. Vi erbjuder sedan ett tag tillbaka lite mer hanteringsutrustning till våra fordonskunder. Andelen eget varumärket kommer över tid att sjunka något. Det ska inte gå ner till hälften, men det kommer att funka delvis.

Vilket samtidigt är en otrolig affärsmöjlighet för oss att addera ett övrigt sortiment in till våra fordonskunder.

I was going to say that it is existing customers that you can use and sell more to. You are growing very nicely here with 9.9%. What does this change depend on? We saw that at Ikem the market had gone down widely. Does the same apply to the vehicle segment or are you the ones who have made clear improvements in this area?

Det finns inga exakta siffror på båda delar av branschen för fordon, men med en svag personbilsförsäljning och en ekonomi i allmänhet som inte växer så fort och konsumenten som har det jobbet, så är det vår bedömning att vi gör det bättre än marknaden i stort.

Right, then you take market share. That's really nice. And I also reflected on that in the presentation. You said that in some of the other segments, there was accelerated growth, while in vehicles, there was a bit more regrowth. How do you interpret this difference in communication? How do you differentiate yourself in terms of growth?

Jag trodde det var tydligt. Jag ska försöka bli lite tydligare då. Vi ser ju på Medical Care att den ökar över tid, tillväxten. Vi ser detsamma på industrin. På fordon har vi ju legat på negativ tillväxt, förutom december förra året. Så därav att vi kallar det för åter till tillväxt. Så hoppas vi att vi kan kalla det för aktuerande tillväxt när vi kommer in till nästa rapport.

Yes, exactly. Then we're in. And then I think we'll go into the medical care segment, because it continues to toughen up. And just as you say, the payment here with Västra Götalandsregionen, it started in May, so we don't see any effect from that here in Q1. And then the question comes, of course, do you start delivering to full directly on this contract on May 1st, or is it a little period of escalation?

We got the first order on the 8th of May, not the 1st of May. It's a pretty quick period. I would say that we are fully engaged at the end of the year. Yes, that's right.

Then it goes fast. What we also thought about here was that... The agreement with VGR is about 50% of the products. It is medical-technical. Does that also mean that you have higher margins because you have a different type and classified product?

I don't want to discuss margins on individual businesses and individual customers. But in a large sense, if you deliver a technically more complicated product, you should have a higher margin. Otherwise, you shouldn't deliver the technically more advanced product.

No. Is it also a requirement from the customer that this is a approved and certified product? Or does it work more than the previous one, but that this is a little extra good?

It's a fast-growing requirement in the market. I would say that during the year, more than 50% of the market will meet that requirement. And we're somewhere between 20-30% of the market today. Yes, that's right.

It's a very fast growth in the market there. And in terms of competition, we have to come in. Now you have this approval. Do all your competitors also have that?

Or how does it look on the competitive side? The market we are in today in Medical Care, there has been... Ex-spelare kan man säga var två dominanta. Om jag ser det så är det bara de två stora som kan räkna hem en investering i Medical Cash. De fyra lite mindre leverantörerna har stått för ungefär 30% av marknaden. Om min bedömning är korrekt så frigörs här kommande år. 1-3 years, 30% of the market volume that has to be caught up by us or our competitors.

That's a nice position. And if you look at the industry segment instead, we jump there, then it looks much smaller right now. And that was because some of it has gone over to the contract manufacturing segment. But what kind of customers should you think this segment is? So that we understand.

Majoriteten kommer från juvelerna i svensk tillvattningsindustri.

Ja, det är de klassiska industripolagen.

Man kan också säga att det är kopplat till en av dina förra frågor. När vi får ett avtag och vi har pressmeddelat en affär och så vidare, vilket vi har gjort på en industri om man tittar bakåt, There, the time delay is bigger, before there is an effect in these agreements. Because there, the customer will have to change a sortiment before it's our turn. So we're growing so much in the industry now. This is caused by the previous press releases. There's a bigger sales curve, and then there's the combination that we've added to a new sortiment. There are several factors that work together in this. What is ramping up the fastest for us is a type of contract from the Västra Götalandsregion where they stop buying from one part and start buying directly from another part. Then it works in the public sector, so we go faster there with the cast.

Right. And then you were a little bit into it, just like a question that we have also received. It was publicizing orders and new contracts. We haven't seen that in industry for a while. You also say that it will accelerate growth. What should investors expect in the future? Is it even more than the 40% growth percentage? Or how should you think about it?

I think you should have respect for, as an industrialist, that you have to have a backbone that is with you. You have to be able to manufacture, you have to be able to store. I think it will be difficult if you have to increase it. You get a lot of new problems if you have to increase it.

Yes, I can imagine.

For 43% it is... For industrial producers, it's a lot that's felt in the walls when you pull on that wind. You have to have respect for the other side as well.

43% is incredible. That's why I thought, oh, we should expect even more here. It's clear that these growth investments that you have made, they are starting to give results here now. And I think, has it gone as I expected? Has it gone better than you could have expected? Or is there a little more to pick up here?

Or how does that feel? I have to say, for my own sake, I have to answer for myself. But if you're at minus 14% in Q1 2024, if we were to turn it to plus 12% in 12 months, I wouldn't dare to say that. Det är över förväntan för mig. Det är sällan du ser sådana drastiska vändningar så snabbt.

Jag är helt enig i Jespers åsikt. Lägger man då till att man fångar den ekonomiska oro som är utanför fönstret och adderar det till? För det är klart att vi påverkas av en omvärld, så som alla andra. Då får vi bara säga om vi tar det. In the first quarter, it has been one of those goods. It is fantastic that we have succeeded so well.

And then we have also received some greetings to Jesper specifically. And thanks for your work and efforts in Clemondo. And then they also wish that it will go well for MFF in the cup final. Because then Diff has a little better chance than in Europe, they say. And then I just think like this, finally then. Then he said that there is a little less focus on sustainability now than there was a couple of years ago. But I think that now there will also be such a rule like CSRD and so on that hits. Is that something that you also see higher effects of? Bigger and more effects of clearly? And should we expect that growth is around 12% during the rest of the year as well? Or can it climb up a little more? Or how should you think?

But I think it's cool, Hugo, because I've asked this question now for a quarter of a year, or whatever it can be about a forecast. And I've answered that we're not leaving a forecast. And last time I said to look at the curves. I think that the same answer is quite reasonable this time. Jeppe showed a curve of the percentage of growth, and it looked like that. I would have looked at that And then each one makes their own judgment if they think that the trend should change or if they think that the trend should continue.

And I will just add that we have no change in how our green road goes. The green road continues. We will become even better at the green area. And it's also like that when you step out, we have to prove it. We have a way forward with life cycle analysis and so on. So we are in full swing with various projects on that side as well.

My understanding is that it is only now that you see that companies really take hold of the green and sustainable work. That it might have been better before, but now you actually do it and then it's not as much talking about it anymore, but then it's more action. I don't know if you feel the same way.

If we look at our vehicle business, it's growing, but the one that's growing the fastest is the green one, the offer.

Yes. Thank you very much. The bringer ratio is up now to 44%, so it has increased a little more than last year, so to speak.

That's a clear sign. Thank you so much, Jesper and Jeppe, for presenting. Thank you, Hugo. And thank you to all of you who have watched and sent in questions. Please continue to do so in these interviews, so I will try to get as many questions as possible. Thank you so much.