Coor Service Management Holding AB

Welcome to Coors Q1 presentation for 2026. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to President and CEO Ola Klingenborg and CFO and IR Director Daniel Warnholz. Please go ahead.

Good morning everyone and welcome to course Q1 report. The agenda for today is first I will go through a short CEO update and summary of the Q1 quarter and then hand over to Daniel to go through some of the financials. Then we'll summarize with key takeaways and end up with a Q&A session. You see some of the key numbers here on the right of this slide, where we have an organic growth in the quarter of 0.4%. We're happy to see an EBITDA margin of 5.5% up from previous quarters and a continued solid cash conversion. So a short summary of the quarter. It remains a high activity in the market in all of our different geographic regions. We won a new contract with Helsingborg. We made an expansion of our contract with Saab and extended our contract with Alema. All of these in Sweden. In Norway, we signed a new contract with Jutun and extended our large contract with Ekinoplant. There's a lot of activity in the Norwegian market. And then in Denmark, we see the effects from the earlier communicated contract losses where it affects the top line primarily. Other than that, we have an organic growth in Sweden of 4% to 5%, the same in Norway and in Finland. So really strong growth numbers there from those markets, but burdened a bit by a negative development in Denmark as previously communicated. We see continued improvement in the EBITDA margins, as I said, up to 5.5%. Strong cash conversion also this quarter above our target of 90. And we see a reduced leverage down to 2.3 times EBITDA, which is a level that we haven't seen before. as low in a while. Also on our environmental targets, we make a lot of progress. And in the quarter, we were awarded a gold medal for our carbon emission initiatives. And that's an important part of our triple bottom line efforts. We also held a capital markets day in March where We reconfirmed our financial targets and also outlined a lot more about what we're doing now to make sure that we reach those targets. So that's a short summary of the quarter. Handing over to you, Daniel, to take us through the numbers.

Thank you, Ola. And if we then turn to an overview of the key business KPIs. In the first quarter, organic growth is 0.4% for the group. Importantly, Sweden, Norway and Finland were all growing well from an organic point of view and roughly in the 4 to 5% range. But we have negative organic growth of minus 12% in Denmark due to the previously communicated contract losses. EBITDA margin for Q1 is 5.5. That is an improvement compared with last year that ended at 4.7%. Margins continue to improve with strong results in Sweden, driving the margin improvements for the group. Cash conversion, as Ola commented, continues to be solid at 92% on an last 12-month basis. And leverage, also an LTM number, is at 2.3 times adjusted EBITDA, and that continues to decrease. Turning down to the P&L, net sales ended at 3 billion Swedish krona, that is 1.3% below last year. But as said, organic growth was positive 0.4 and we had a negative impact of 1.7% from foreign exchange. Adjusted EBITDA amounted to 167 million Swedish kronors, which gives us an adjusted EBITDA margin in the quarter of 5.5%. And both EBITDA in absolute and margin is an improvement compared to same period last year. Items affecting comparability during the quarter amounted to 24 million and mainly come from restructuring costs, M&A transaction costs for contemplated but not materialized M&A, as well as integration costs for the newly started contracts in Norway. Net income is 69 million, and adjusted net income when we add back amortization amounts to 77 million Swedish kronor, both improving as well versus last year, same period. On the LTM numbers, we see that net sales is now 12 billion, 442 million Swedish kronors. And organic growth is 2.6%. And FX was negative over that period with 2.0%. In total, slightly lower net sales versus full year 2025. The last 12 months adjusted EBITDA level is 625 million, which gives us an LTM EBITDA margin of 5.0 versus 4.8% for the full year 2025. Adjusted net income finally for the LTM period is 287 million versus 274 million for the full year 2025. Moving then into our segment and looking at the Q1 period, starting with Sweden. Organic growth was strong at close to 4% in the quarter, primarily a result of favorable activity level across all of our different businesses, but in particular high variable income in integrated facility management and property services. Adjusted EBITDA and margins are improving with strong performance across all of our different businesses in Sweden. And as we mentioned, Kors signed a new contract with Helsingborg municipality and extended a contract with Alema in Sweden. An overall good activity level in the Swedish market. Turning then to Denmark. During the quarter, sales in the Danish operations declined due to negative organic growth of minus 12%. and negative for an exchange effect of minus 4%. The negative organic growth was due to the previously communicated ended contracts, which are estimated to also negatively impact coming quarters. This also negatively affected adjusted EBITDA for the quarter that amounted to 22 million Swedish krona versus last year, 34 million. and adjusted EBITDA margin 3.7% versus last year 4.8%. Although we benefited from lower cost as an effect of the cost reduction done last year, we were not able to fully compensate for the loss of sales in the quarter. Activity in the market remained high with a number of large contracts up for tender in the near future, both in our own portfolio and in the market in general. Turning to Norway, during the first quarter, sales in our Norwegian operations increased by a total of 3%, with organic growth of over 5% and foreign exchange effects of minus 3%. Organic growth was due to startup of the newly won contracts, Variable volumes were lower than last year as expected and we expect to see a continued normalization compared to previous year during the coming quarters, where in particular Q2 and Q3 2025 saw unusually high levels of variable volumes. Operating profit, adjusted EBITDA for the quarter amounted to 20 million, same level as last year. The operating margin remained at 3.7%. KOR extended its important contract with the Equinor plants and won also a new contract with Jyto. The next six months will see a continued ramp up of several new contracts in Norway, such as with Avinor for cleaning services at Oslo Gardermoen Airport and Sjage Egendom with Kål acting as a Toyota provider for Skøyen Atrum. Starting up new contracts may have a slightly negative short-term impact on the margin for the Norwegian operations. And then finally turning to Finland, during the quarter sales declined by 1% in Finland compared to the year earlier period. However, organic growth was positive and amounted to close to 4%, while foreign exchange effects were negative and amounted to minus 5%. Operating profit amounted to SEK minus 1 million, compared to zero last year. The operating margin adjusted to the beta margin was a negative 0.8, so this is a positive 0.3% last year. If we then turn to cash flow and balance sheet, we continue to see solid cash conversion at 92% on an LTM basis. Working capital is a negative minus 8.4%, which is in line with the seasonal pattern in prior years. And leverage continues to decrease and is at 2.3 times every time. During the quarter, Cora announced that we had completed the placement of new senior unsecured bonds amounting to 750 million Swedish krona. The new bonds have a five-year maturity and carry a floating interest rate of 3 million STIBOR plus 2.05% per annum. The bond issue was well received and was oversubscribed by a healthy margin. That also means that with that we have retired the outstanding three-year bond that amounted to 500 million. which matured in 2027, and that one was redeemed in full in March. And accordingly, Core has no loan maturities until 2028. And with that, I hand it back over to you, Ola, to sum up the quarter.

Thank you, Daniel. So summarizing again the quarter, first of all, the bond is, of course, something that we're very happy to have placed in the way that we did. Now, on top of that, we see, as we mentioned earlier, high market activity with lots of new contracts coming in across our different regions. The organic growth, Sweden, Norway, and Finland is in a good place in line with our financial targets. With Denmark, it's slightly more negative. Margins, 5.5%. Good cash conversion in line with our targets above 90%. The leveraging continues and we're down now to 2.3, which is a very healthy margin. Also a very healthy leverage level. And the environmental targets, once again, is something that we're very happy with and that our customers really value. And it's something that gives us a competitive edge. And available on our website, you can also see the capital markets presentation from March, which will give a lot more insight into the various parts of CORE. So welcome to come in and watch that if you're interested in more details. With that, we conclude this part of the quarterly report and turn to the Q&A.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Simon Johnson from ABG Sundal Collier. Please go ahead.

Good morning, guys. Thanks for taking my questions. First, I have a few questions. A few questions about the margin development here. Very good margins in Sweden, again, here in this quarter. Positive surprise once again, I would say. Do you think that now with all the actions you have been taking and starting to show results that this level, meaning around the 10% level, is a level you should be able to maintain here in the near to midterm and build from that over time?

Thank you. I think, first of all, recognizing that the work that we have been putting in now into operation efficiency measures, simplifying the organization, focusing on operation efficiency and personnel cost and so on, has really taken effect. And we're very happy to see that. That's not a linear progression, so you can really rely that it will be super stable in terms of exact improvements quarter by quarter. But we definitely see a positive trend, and I think we don't give forecasts on exact numbers for the coming quarters. But this is for sure a positive signal and a solid development.

all right got it and then on central costs which was a bit lower than expected here in this quarter looking on an annual basis where should should this be you think in line with last year or is that there anything else to to keep in mind here around the central costs

I think you should be expecting that we will be roughly around the level that you saw last year. And the savings that we have generated during the cost initiatives that was done during last year, they will show up in the operating segment. And in the quarter, they benefited us in Sweden, which was very clear. I think it's also fair to say that we benefited in Denmark, which meant that we could offset some of the negative impact from the loss of volumes.

All right, that's clear. Thank you. Then just to follow up, or one last question on... on the growth outlook. You have been a bit more positive on Denmark here recently I believe and it's obvious that it's tough right now with the churn and which should continue to weigh on growth as you said but is it correct to believe that you actually see that market turning around now and coming back to growth and when do you think that could happen given the good tender activity that you see?

Thanks for your question. I think, first of all, I'm not sure I recognize the fact that we've been positive about Denmark lately, but I think our... Our sense is that this first half of this year, as far as we can see now, it will bottom out in terms of the effect of the contract losses. And we see some positive momentum in the sales efforts we're doing in the Danish business, although it hasn't come through yet in the numbers. we feel a certain bit of confidence that they are on the way back with the new CEO that has implemented some really good changes and so on. But for the coming quarter and so we will continue to see effects of the historical losses. But our hope and our belief is that it will bottom out during this quarter with the knowledge that we have at the moment about our contract portfolio.

I see. I mainly refer to that you say that you see high levels of activity with several major tenders underway. So that's why I'm asking.

Yeah, I think during the last half year, nine months, we've seen a lot of big contracts coming out in Denmark, both ours and our competitors. So it's a very high market activity. And there are... in the Danish market, quite a few of these really, really big contracts. And we see a lot of them moving. And when I say moving, I mean that they were up for tender. It can be that we prolong them. It can be that our competitors prolong theirs, but it could also be that they can be won by someone else. So there is a lot of movement in the Danish market. So that's what we refer to with that phrasing.

All right, so with high levels of activity, it doesn't have to be positive.

Not necessarily. Hopefully, of course it will be, but it can also mean, of course, that there are contracts that we have that could be up for tender and that, of course, the competitor could snatch from us. But the other way around is equally true.

All right. Thanks for the clarification, Orlan. That's all for me.

Thanks. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Oliver Ucetillo from Akshi Sperana. Please go ahead.

Good morning, guys. My first question was perhaps a bit of a follow-up on where you ended the last question. regarding the hit rate. Do you believe, as you're saying, that market activity is picking up in especially Denmark, but that it's not particularly positive for your upcoming organic growth, so to say. I mean, that's really a function of hit rate, right? And do you believe that as the previous quarters have been mainly focused on increased efficiency and so on, do you believe that that has hindered your hit rate in any way?

I think, no, I wouldn't say that. We have a large team that is dealing with all the tenders. I think, if anything, the high market activities just forced us to prioritize which tenders to go after and where to focus our efforts, where we... where we have the highest winning potential versus the value of the contract. So with a lot of contracts out in all of our Nordic markets, we have to prioritize our efforts. So I think it would be rather that than the efficiency measures. Rather, we would see that the work that we're doing to improve our operation efficiency provides us with an opportunity to be more competitive in the tenders that we participate in and keeps our competitive edge. So I think it's a little bit the other way around, but I think that's how we think about that.

Yeah, I think that's fair. Do you believe that you have more resources to put into winning new tenders going forward here? I mean, as your main organizational restructuring is passed.

I think we are definitely seeing a focus shift that is returning to growth. And then now I'm not talking about the resource allocation, but perhaps more of the mindset of the operational parts of the business where more focus on growth, more focus on selling, more focus on winning new customers as we emerge on a more stable level of margins. So there's definitely that. there is a continued work to make our operations more efficient to be able to invest more in sales resources if we talk more about heads and systems and so on. And that's an ongoing effort.

Okay, great. I just have one last question from my end. Obviously, we've had the discussion about reflation and increased energy prices and This was, of course, a major issue going back a few years. How are you set up to handle increased costs today? And have you seen anything from this in your numbers as of today?

Well, no, we haven't really seen that. And our business model is a large, very large portion of our costs or personnel costs. So that's the absolute majority of our costs. We manage these costs that you refer to for our clients to a large extent. We make a lot of work with energy systems and energy efficiency for the properties where we work and so on. So rather for us, this is an opportunity, I would say. Then on a more systematic level, should inflation on a more general scale kind of resurface and drive salary increases maybe over time? That is, of course, a challenge for us, a challenge that we have been dealing with for the last half decade and that we have been able to maneuver through. It's more of a kind of long-term issue for us, possibly, but also an opportunity, actually.

All right. Sounds good. That's it from my end. Thank you.

The next question comes from Carl Johan Bonnevir from DNB Carnegie. Please go ahead.

Yes good morning Ola and Daniel and congratulations to particularly the Swedish operation looking very much more solid and back to where I guess the historic were from that operation and on that how much have you really improved the business compared to say the last two years or or changed it when you are looking at it? So we understand the dynamics now going into maybe the rest of the year where you meet slightly more challenging comparisons.

Well, that's a very big question, Johan. But I think on a systematic level, I think we have flattened the organization. We have made it much more focused on operational efficiency. We have... we have made it more possible and easier to see where we are underperforming and addressing those areas much more systematically. And since we have a very wide variety of customers and contracts and contract forms that has to be done on many, many different fronts at the same time, which is the nature of operational efficiency in a business like ours. So I think that there is a systematic work being done to improve on many, many fronts at the same time. Particularly, we're working a lot to see what we can do on personnel costs and scheduling efficiency and things like that. And that is not a one-time shift, but it's small improvements everywhere over time. So I think that there is definitely a systematic shift in that regard, in the Swedish business particularly, but also in the other markets. And I think, as Daniel mentioned, actually... The Danish business has been able to offset some of these contract losses, actually, in a quite impressive way, actually, from a profit point of view. So it should we look at underlying business. It's actually quite a lot of work being done there to improve the underlying margins. which will benefit us, I think, once we get back to growth in the Danish business. So that was a long answer, maybe, but it was also a big question.

That's fine, that's fine. And I guess you earlier alluded and talked about that capital markets say that you're going away from what you would call efficiency programs, going to more of a systematic system. day-to-day improvement kind of template for the operation. How has that changed the mentality in the organization and what are the big things that needs to come in place here if you're looking on the next 12 months or something?

I think, first of all, we've been doing some organizational changes that I think will drive and facilitate this shift, both getting closer to the business all the way from the top and removing management layers and matrix solutions that has perhaps hindered us from cutting through into the business. So that is definitely one thing. And then I think increasing, these are things that are very operational and that perhaps is not suited for an investor call like this, but working with the culture, constantly communicating that every co-worker counts, every minute counts, every hour counts, every invoice counts. and that everyone is important and can contribute is a cultural shift and the mindset shift that has to infuse the whole organization from top to bottom. And we're working very much on that cultural shift. And it's something that I feel passionately about myself and that we've now recruited also more people who feel passionate about that. So I'm quite confident that this will make a very significant impact for Core over a long period of time, which I'm very happy about.

And when you look at your, I guess, with Sweden back to stability again, that is a key item on also being able to meet the midterm target of 5.5% margin on the group level. Do you feel more confident about getting back to that maybe in 2026 or is it still a target that is sliding slightly?

I mean, we don't give any predictions like that. And it's a moving target. And we constantly have contracts coming and going that we need to both absorb and manage. So I continue to say that it's a midterm target to reach the 5.5%. But obviously Q1 is an encouraging sign that it's definitely possible.

When you look at Q1 volumes, so you mentioned variable volumes in Sweden, but also highlighting the tough comparisons in Norway for Q2, Q3. If you look at Q1, what kind of level would you say variable volumes were? Were they higher than normal or average or lower than normal if you're taking it in a longer perspective?

If you look at Sweden specifically, I would say it was slightly higher than normal in both our IFM business and in our property services business. Having said that, I think we see a positive trend on variable volumes, in particular in our property services business in Sweden, that we expect to continue also in the coming quarters. So the big question about normalization, I think it's mostly or only regarding the Norwegian business.

Good. When we look now into 2026, what kind of wage inflation are you forced to say negotiate within the contract?

I mean, we are first of all, we are following collective bargaining agreements across all of our markets and we have Since we're operating in many different segments, we also followed many different collective bargaining agreements. But I think following market or something like that is probably what we can expect. I have in many of our big contracts, of course, index index clauses and some many cases they are linked to different indexes that are very closely linked to personnel cost development. But in some cases, the indexes look a little bit different. It depends on the contract. But generally speaking, we are able to offset the salary increases either through indexes or through efficiency measures. This is also alluding to your previous question, Carl Johan, why it's so important to systematically and continuously work with efficiency improvements.

Sounds good. I heard you mention Daniela during the comments on the items affecting comparability that you've taken cost for acquisition processes. Could you allude to what happened there or what might happen or what might not happen and then what you have been looking at and give some more color to it?

I think as we were mentioning also in the capital markets day is that we are seeing now with our leverage coming down and also having stability in our main markets that we can be a bit more forward leaning when it comes to acquisition. So in the quarter, but also in Q4, we did look at a couple of different transactions, but none of those materialized as a win for us. that we are continuing to be active in the market. And as we were saying in the capital markets day as well, we are prioritizing our current geographies and our current businesses and are looking to strengthen our business where we see that we can strengthen our footprint or gain specific customers or capabilities. Thank you.

And we only hope that you are more successful in the coming quarter of also concluding the deals. And it must be a fantastic way to recirculate the strength you now have on the balance sheet. So thank you very much for all the color and all the best out there.

Thank you.

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

All right. Thank you very much for joining TOR's Q1 call. And thank you very much. And this concludes today's broadcast. Thank you.