Dometic Group AB (publ)

Today I am pleased to present the CEO, Juan Vargas, and the CFO, Stefan Freestet. For the first part of the call, all participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by pressing star 5 on their telephone keypad.

Now I will hand the conference over to the speakers. Please go ahead.

Good morning, everybody, and welcome to the quarterly report for the second quarter of 2025.

If we start immediately with the presentation, the turbulent market conditions and tariff uncertainties continue to have a negative impact on our numbers. We see that there is still today a low consumer confidence, leading also to a negative sentiment among dealers, especially in the William Channel. And that leads also to a situation where retailers still are very, very careful in building up inventories. When looking at performance, our performance, we ended up the quarter showing a negative organic growth of 11%, with service and aftermarket down 12%. Here, we need to keep in mind that we have a relatively good Q2 2024. Distribution ended up at minus 7% organically, affected both by production stock, primarily, I would say, production stock in our facility in Katy, Texas. And we will come back with some more detail later. And then also affected by poor weather in the American markets. And then we ended up at minus 40% with growth in London Vehicle Americas. while both APAC and EMEA are down. We are happy to comment that we see a stabilization of your intake in Q2 in comparison to Q1, even also a better backlog situation at the end of the quarter than what we had at the end of Q1. Looking at our profitability, we ended up at 14%, which is in part with the profitability we showed in Q2 last year. We introduced, as you all know, a restructuring program in December last year. The program is running according to plan. And then on top of the restructuring program, we also have a number of efficiency initiatives that are kicking in and obviously having impacts in the first two quarters of this year. We see land vehicles and mobile cooling showing margin increases while marine and global ventures are down in comparison to last year. And free cash flow ended up at 1.3 billion, leading to a leverage of 3.3, which is also in part with the leverage that we showed in Q1 this year. Moving over to the financials, the quarter ended up at 6.3 billion with 11% negative organic growth, 7% negatively affected by FX, and 1% affected by the portfolio changes that we also announced in connection to the December communication. EBITDA ended up at 877 million, which is an EBITDA margin of 14% exactly at the same level as one year ago. Looking at adjusted EPS, ended up at 1.38% burden, which is lower compared to the 1.76 that we communicated one year ago. And free cash flow ended up at 1.3 billion in comparison to almost 1.4 billion one year ago, ending up again at a leverage of 3.3. Looking at the year-to-date numbers, we reached a revenue of 12.1 billion, showing 10% negative organic growth, 4% negative effect of FX, and in the same manner as for the quarter, 1% in negative effect of the portfolio changes. EBITDA margin ended up at 12.3% versus 13%. So again, Q2 had a positive impact, and we are getting closer to the largest numbers yet to date. Adjusted EPS at 2.26% and a free cash flow of almost 900 million.

leading to an average of 3.3.

Looking at phase, again, one more negative quarter in terms of organic growth. When land vehicles ended up at 11%, negative organic growth. In America, it's minus 14%. And as I commented before, so looking at the OEM was positive for a single quarter in a row, while the negative effect came in through the service and aftermarket in Americas that did show a pretty good growth, pretty strong growth in Q2 last year. Land vehicles SEMEA ending up at 8% negative growth and APAC 17%. Marine at 11% mobile cooling solutions and 10% negative growth and global ventures ending up at 11%. Even if we see negative numbers in all the segments, We see also some green shoots. We see part of the land vehicles, especially the commercial part of the land vehicles, they're starting to show positive numbers, both in the quarter and year to date. We see also residential showing pretty good numbers. The outdoor business that we have in Europe also showing pretty positive numbers in the quarter. Looking at the state channels, no major changes. In reality, we are down on OEM 1% each point, while distribution is up 1% each point in comparison to last year. Perhaps worth to comment that RV OEM stands today for 90% of the business in comparison to 49% of the business 2017. This is a major transformation of the company that has been taking place in recent years. Looking more in detail to the different sales channels, Starting with services off the market, weakening growth in this quarter in comparison to last quarter, but happy to see that the oil intake looked better during the quarter. So we had a relatively clear improvement in Q2 versus Q1. We see a decline is primarily driven by LV. Eden Marine was weak. But again, on the LV side, we had a pretty strong quarter in Q2 last year. And we see also differences. So the European situation is improving much faster than the American situation. And we are obviously totally convinced that the American situation is impacted by all the discussions about the tariffs. Looking at distribution, even there, we saw a weakening growth. Two major parts. One was really the production stop. What happened is that we got a stop for several days in due to pollution in one of our foam tanks forming tanks in katie texas but then we also need to comment that we have also pretty bad weather in north america and even southern europe but of course our igloo says is very much exposed to the north american markets And I already commented that we saw good growth in both residential and standalone products in Europe. On the William Channel, we continue to see a sequential improvement led by the situation in America. Again, the second growth in America. We also see registrations in Europe. uh being negative minus one percent so starting negative in q1 q2 looks a little bit more positive and then of course when when considering that production is down much more that's also leading us to the conclusion that we should see improvements at the end of the year or perhaps you know next year and marine still continues to be slow looking at profitability we ended up at 40 percent in part with last year with a good improvement in gross margins led on one side by sales mix but also the fact that the restructuring program that we launched is kicking in clearly and then we also have a number of other efficiency measures that are improving our margins on operating expenses We are also down. We have been working very, very hard also to contain our expenses, even if we continue to invest in strategic important areas for our future. A lot of discussions on tariffs and the potential impact on the tariffs. Just as a reminder, we have a little bit more than 50% of our revenues in the US, 85% of Everything that we are selling in the U.S. is produced in North America, U.S., Mexico, or Canada. And the production that we have in Mexico and Canada is very much included in the USMCA exemption list. So, so far, we are protected. And on top of that, we also have a good spread of our factories with nine factories in the U.S., two factories in Mexico, and one factory in Canada. We don't know how the tariffs discussions are going to end up, but obviously in the short term it's very much about adjusting prices, surcharges, and we have been applying changes during the quarter, both ups and downs, depending on the communication delivered by the US administration. And then on the long term, of course, that we are working on several different scenarios in order to change both logistic flows and also add more value in our US factories. Looking a little bit more in detail into different segments, land vehicles ending up at 11% with a double-digit decline in the market, especially in Americas. But again, we had a relatively good Q2 last year, and then we saw a deterioration in Q3 and Q4. On the OEM, I already commented that we see EMA and APAC still coming down. at the same time as LVA is showing positive numbers for the second quarter in a row. We are also happy to see that registration numbers in Europe are not more down than 1% in comparison to the hefty drop that we see in production across the William manufacturers. Good improvement in EBITDA ending up at 3% versus 10.5% last year with improvements in Americas and EMA. and a deterioration at APAC, but then we need to remember as well that APAC is still showing almost 25% in the everyday market, despite the drop on the top line. Marine, down organically 11%, with service and aftermarket still challenging, but we see some improvements towards the end of the quarter. while we still see double-digit decline in the OEM and a negative dealer sentiment when looking at the comments from the dealer surveys that are carried out during the quarter. Evitae is still pretty solid, 19.6, despite the drop on the top line. And the Evitae margin, the lower Evitae margin, is a consequence, obviously, of the reduced net sales. Looking at mobile cooling MPS, sorry, MCS, organic growth 10%. Again, we had a pretty bad weather both in April and May, a little bit improving in June, part of the deterioration. And then we have this production stop that in our estimation is costing us about 50% of the drop in the quarter. That was a temporary production stop caused by, again, pollution in one of the four main tanks, the major four main tanks that we have in the factory. And it was corrected after a couple of days, but it caused us, obviously, quite a substantial drop in the quarter. Retailers, as a consequence of the weather, saw a weaker sell through in April and May, while we saw also improvements in the month of June. Every day, strong, 13.1% versus 2% last year, despite the lower net sales, very much driven by the cost reductions that we have in the organization. And then moving over to global ventures, even here, organic growth, negative organic growth of 11%, Part of that is caused by the changes on our portfolio. We stopped the deliveries of our generator product program during Q1 and that continued during Q2. It will have a negative effect during the rest of the year. And then we have also some major changes in some of the different segments as well. Happy to see growth in residential. We have seen now three pretty strong quarters in residential after a couple of years of negative growth. We saw a decline in hospitality and mobile power solutions from a growth perspective. And then looking at ABTA profitability, 14.2 versus 15.1 with stable margins in both residential and hospitality while we see a decline in mobile power solutions. Looking at sustainability, very good progress. We are happy to see progress in terms of injuries being very much below our target. Our share of PMI managers is on target. We also see good progress in the share of renewable energy in operations, 34% versus 55% that we have as a target. And even on the assessments of high-spend direct material suppliers, we are running at 55% versus 65% per target. And then innovation, we continue to invest in innovation and ended up at 22%. versus 21% in Q1. Looking at innovation, I would like to point out a couple of samples of the products that we launched during the quarter. A very important launch for us is the premium series automatic passive coolers. This is very much in combination with using the competencies that we have in the Eagle organization and launching again a premium series on both passive hard coolers and soft coolers. The launch took place some weeks ago and the products are available both in American markets and on the global markets on e-commerce. This is again a series of both hard coolers and soft coolers that are in combination creating a system that you can stack up and scale depending on your different needs. Very good performance. You can keep the cold for up to eight days. And it's also, we are using injection molding, which is much, much lighter in comparison to the traditional passive cooler from Dometic that used to be in roto molding. Again, this is really the... collaboration that we have between the Igloo and the Dometic brand on the different products. As you may remember, we launched the first series of active coolers under the Igloo brand last year, and now we are launching the first series of passive coolers, premium passive coolers under the Dometic brand. We are also launching the first product in a new generation series of furnaces on the American market in order to upgrade our HVAC programs for the American markets. This is leading to much high performance than the old series that we are just now starting to replace. Moving over to the restructuring program that we presented in December. As you may remember, 750 million in expected savings, and the program should be fully implemented at the end of 2026. Until now, we have closed one manufacturing site and two distribution centers, so one more distribution center in comparison to what we communicated in Q1. 225 employees impacted, running rate in savings was $195 million in comparison to $100 million at the end of Q1. And we had cashed out in the quarter $34 million. At the same time as we communicated the course reduction program, we also communicated the portfolio changes. I commented we stopped our manufacturing some months ago. We had an impact during the rest of the year. We are working on the investment program as well and working very hard in negotiation with a number of counterparts.

And with that, Stefan, Could you please continue?

Yes, thank you. So starting off with the income statement for the second quarter, I'm really happy to report that we have a 1.3% unit improvement in our gross margin, which is driven by sales mix effects of the restructuring program, but also other efficiency measures related to logistic cost sourcing and also the fact that the we have been adjusting capacity in our factories over and above the restructuring program, which is a normal course of business. On the operating expenses side, 982 million in constant currency, that is a reduction of 6%. And then it is, of course, still increasing in relating to net sales because of the development of the net sales. And We are continuing to invest in strategic growth areas, so it's not holding back everywhere. Where we feel that we have to invest, we are continuing to do that. Moving over to net financial expenses, which are continuing down according to plan, based upon how our debt level is developing and coming down step by step. Then on the tax side, we have an effective tax rate of 32% in the quarter, which is consistent with the first quarter. However, 2% units higher than Q2 last year. So moving on to the cash flow. Really happy to report a strong cash flow delivery in the quarter. And on the operating cash flow side, we are continuing to work with improvements in our working capital. We had a cash out related to restructuring program of 34 million in the quarter. It's now totally from the start of the project, 129 million in cash out relating to the 400 million total cash out that we have been communicating. Obviously, the rest is going to come mainly during 2025. We are carefully prioritizing where we are investing, but still have the feeling that we do what makes sense from a strategic point of view. If we look on the other components in free cash flow, the paid and received interest is spending down, and we have also been paying less tax. Then we did a repayment of the remaining bond that we started to repay in the first quarter of almost 500 million Swedish kronor. On the next slide, you can see how our free cash flow has been developing per quarter, and it's really nice to see that we are almost on par with Q2 last year, which was our second best quarter ever. So now we have our third best second quarter ever here in 2025. Taking a look on the working capital development, it has been coming down to 27% of net sales, which is the same that we have in the quarter stand-alone. As you can see, the inventory balance is significantly down from 6.7 to 4.8, and the number of days is now 128 compared to 141 in Q2 last year. We still have further possibilities to optimize the working capital, and the long-term goal is to be around 20% of net sales And if you look on the different components here, you see that we have a stable situation on accounts payable. Inventory is trending down and we also have a stable situation on accounts receivables. So moving on to capex and research and development, we are a little bit higher compared to last year, which more has to do with the timing of Q1 and Q2 capex in 2024. So we are on a normal level and as I said before, we are able to spend what we need to spend. So it's not that I feel that we are compromising there in any way. We are on an LTM figure of 1.8% in relation to net sales. The same comment basically goes also for what we spend on R&D. It's a little bit less in the quarter, but more related to timing than anything else. So the LPM level is 2.7% of net sales, and we continue to invest in important strategic growth areas, as you could hear from Shans' report on the low in the last quarter here. So moving on to our debt maturity report. profile here. We have repaid as I said before 500 million of the remaining part of the SEC bond that we started to repay in Q1. Then on the USD loan side which is the 4.5 billion chunk that we have in 2028 233 million of that we have an extension option to 2029 which we will exercise in the beginning of next year. The average maturity rate increased from 2.1 years in Q4 to 2.4 years now in Q2, which is obviously relating to that we have done some refinancing actions, especially in the first quarter here. Average interest rate is on 4.8% of our debt portfolio. We have our undrawn revolving credit facility available of 300 million euros. And then we have also updated our EMTM and certificate program here in the quarters. Moving on to our net debt to EBITDA leverage ratio, we ended on par with Q1 here on 3.3 times. 0.4 times higher than the same quarter last year. This is driven by the EBTA development, mainly driven by the net sales development. We have partially been able to compensate that with a strong cash flow driven by working capital improvements. And we continue to keep high focus through the whole organization in protecting margin and reducing working capital. We stay fully committed to our leverage target of around 2.5 times EBITDA. However, it's difficult with the current macroeconomic situation to talk about the exact timing of that. But we stay fully committed on that. So with that, Johan, I hand over to you for summarizing the quarter. Thank you, Stefan.

As a company, we need to control what we can control. The market is something we can do about. Of course, I'm not happy to see that one more quarter we are shrinking as a company. At the same time, I feel very, very proud of the job the organization is performing, which is leading to a reverse performance. We maintain EBITDA margins. despite the low net sales. We are also happy to see the cash flow continue to deliver at a very high level in a tough macro environment. And of course, the situation with Tarix is affecting, as I commented before, consumers, it's affecting the value chain dealers, and everybody is very, very careful in building up any kind of inventories. The uncertainty on the market is still there, but we have seen a stabilization of the oil intake. We see as well easier comps during the second half. So again, under normal circumstances, we should expect gradual recovery in terms of the market and distribution. But again, the question mark, the main question mark is the tariffs and the effects. that tariffs might have on consumers and dealers' sentiments. Strategically, we continue to invest in our growth areas, both in product development, innovation, organizations in a number of areas. We continue to do so. And we are also happy to see, obviously, that the global restructuring program that we launched in December is kicking in and having a very nice effect on our numbers. And with that said, I would like to open for the Q&A session.

If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. Please mute your line when you have asked your question and please limit yourself to only two questions. You can also write your questions on the webcast page.

Do we have any questions?

The next question comes from Johan Eliasson from Kepler Chevreux. Please go ahead.

Hi, it's Johan at Kepler Chevreux. Hi, Johan. Hi, Stefan. Good morning. Testing your equipment. Working well so far. I have just one question regarding the free cash flow. I hope you can hear me well. Was there anything particularly interesting impacting the free cash flow in this quarter? And how do you see the cash flow pattern in the second half of the year? Is it the normal seasonality or is there something we need to bear in mind? Thank you.

There was nothing particular more than that. We are working very hard with optimizing this. So obviously inventory has played an important role this quarter as well. But then we also did a very good job on the accounts receivable side this quarter, which is something that we are obviously working with on a continuous basis. So I would say, I mean, the way that the cash flow should continue to develop here in the coming quarter, I mean, we need to consider our seasonal pattern, where Q2 is obviously our strongest cash recorder. But I still see that we are going to continue to deliver robust free cash numbers here. Not to the level that we have been doing in the last couple of years, but still robust.

Okay, thank you very much. And in the second half of the year, anything particular that will impact coming from the restructuring program? Or is it sort of gradually also in the second half? Thank you.

It will be gradual measures that will be having a gradual impact on our numbers.

So, I mean, in general, I mean, the restructuring program, as we said before, is is according to plan, and we are following the plan that we have been laying out. So as you remember, 300 million is the target for 2025. Excellent.

I have no further questions. Thank you very much. Thank you.

The next question comes from Henrik Kristiansson from DNB Carnegie. Please go ahead.

Yes, good morning, gentlemen. I have a question on the gross margin improvements. You sort of highlight the restructuring program and... That has contributed to the improvement year over year. And then you also talk about these other efficiency measures. Could you talk a little bit more about that and to what extent that is temporary or also structural and permanent?

Absolutely. But I mean, we have, I mean, there is different components in this. I mean, first of all, you will see that we are down a number of FDs, a little bit more than 800 FDs. And half of that is, you could say, factory related or GP related. So we are, of course, over and above the restructuring program, keep on adjusting, you know, our capacity and looking for continuous improvements here. Then we have on the logistic side where we are, you know, both optimizing our logistic footprint, which is obviously a part of our restructuring program. And then we also see that we have been pretty successful in some areas on our sourcing improvements in 2025 years. So that are the main components of that. Then you obviously also have a mix effect here, as I mentioned. I mean, even though service and aftermarket did not develop according to plan, it's still a larger share of the total than because of the development on the OEM side. So that are the components, Henrik.

Great, thank you. And then my second question, just an update on the legal situation on the earn-out. What's the latest and greatest there, please?

Yeah, I mean, it's no news. I mean, we have the date in September here, which we are working towards. But other than that, from our point of view, there is no change. So we still believe that we have a good case.

Great. And just related to that, what's the amount that you have on your balance sheet booked for that or not?

For the time being, it's around 66 million US dollars. Perfect. Thank you.

But that, of course, doesn't have anything to do with what we believe the outcome is going to be. It's just something that we work with the auditors on a continuous basis.

Of course. Thank you.

As a reminder, if you wish to ask a question, please dial star 5 on your telephone keypad. The next question comes from Daniel Schmidt from Danske Bank. Please go ahead.

Yes, good morning, Stefan.

Sorry, I just wanted to say, first of all, that I missed most of this call, so maybe I'm asking questions that have already been asked or addressed in your prepared remarks. But, Stefan, you did mention that the savings program was running according to plan, and it sounded like maybe you were even doing better than you expected on the FTE side in production. Did you also mention how much of these 300 had been realized already as of H1?

Yes, we are on 195 million on an annualized pace now. So we are moving towards the 300 in a good way.

And then you mean annualized? As of Q2 being annualized, or do you mean H1?

I mean, if you, as of the pace, I mean, we are expecting to be on a pace of 300 million. It doesn't mean that we are going to see 300 million in May. But so on the target of being on a 300 million pace when we come to the end of the year, we are 195 now.

Yeah, so that means basically that you did around 15 Q2 then? Yeah. Yeah. Okay. Good. And you're also, of course, right about the production stuff that you had in Q2 in Iglo. Is that entirely behind us now?

Yes, it is.

Yeah. And then maybe some sort of regulatory questions might be difficult to answer. But there's two things happening, if I'm not mistaken, and maybe things have changed recently again. But as I understood it at least a couple of weeks ago, there was supposed to be a 50% tariff on on steel and aluminum content in appliances as of the 23rd of June. Is that now in effect? Is that impacting anything in the market in terms of market dynamics? And then on top of that, I think the big, beautiful build that came out suggesting tax deductibility on car loans, which I assume also impacts RVs. Do you have any thoughts around these two factors and any sort of implications or any talk about it that you've heard so far?

Not more than we are obviously trying to figure out what that means to us. And so far, it doesn't mean a lot, simply because we are still under USMCA. protection with our products, the vast majority of our products, I would say. And then what we can say is that we have kind of changed our surcharges to the markets. I think this is the fifth time in the last six, seven weeks since the first time. So it's a lot of changes. So unfortunately, that's the problem just now in the American market. And certainly this creates, this change creates. From a European perspective, we don't import basically anything. So there is no exposure, so to say. So we feel confidence. That's the reality. We feel that we are working very, very close to the market, that we have a lot of people spending a lot of time trying to figure out, and that we are in continuous dialogue with our customers.

And then concerning... Oh, sorry. Yeah, go ahead. No, concerning the... I don't have it on me.

No, okay, sorry. No, but sort of because with all these changes, and it's really hard to keep track, and I guess for you too as well, but I think it's been quite clear that on a relative basis, you stand out a little bit as a winner when it comes to, if this is still true when it comes to the 50% tariffs on content and appliances, Is that increasing interest from your customers to have a dialogue with you?

I think, yes, we are quoting a lot. But at the same time, we also see, I'm sure that you are aware of, the expectation from the market just now is that for the remainder of the year, the RVAA is predicting lower numbers than we have seen in the first four months. So we had positive growth on the market from a production perspective. In the first four months, then they came in with minus 15% in May and the remainder of the year expected to be negative. So yes, we are getting a lot of requests. We are quoting quite a bit, but still, I think it's early days. At the same time, we agree our position is obviously that today we are competing primarily with chinese inputs on the appliance side and of course that if we are talking about refrigeration that's really the product group that that cost us quite a bit of market share a few years ago so today we are pretty much protected yeah

And I think you answered it and maybe you talked about it before, but you write that you are growing in OEM LV America in the quarter and we only have two months officially being out in terms of shipments. I guess you guys know what June ended up with maybe, but for April and May it's minus six. So at least that rhymes with what you are basically, what I asked about, is that the fair assumption?

I mean we have positive growth on the OEM side in Q1 and we have positive growth on Q2. Q2 was higher than Q1.

Okay, thank you and given sort of the RVIA forecast which is of course sort of indicating behind in growth in Q3 and Q4, if you stack that up against what you have done in terms of trying to get back into the market Do you believe that you can still sort of persist growth in LV America's OA business, even if you continue to see the market coming down in the second half of this year?

I mean, what I can tell you is obviously that we will do anything we can, obviously, to regain part of the share that we lost a couple of years ago. And of course, depending a little bit on the tariffs and how the tariffs end up, that will play for us. Again, we see positive growth and we see that our intake is also stabilizing. then the future will tell us. Daniel, we will do anything we can to deliver.

Thank you. That's all for me. You're welcome.

As a reminder, if you wish to ask a question, please dial star 5 on your telephone keypad. The next question comes from Agnieszka Wajlela from Nordia. Please go ahead.

Thank you and apologies if my questions have been answered. I also missed the beginning of the call. But maybe zooming into the mobile cooling business, you've delivered quite solid profitability in the quarter despite lower organic sales growth and some production issues. So could you just tell us what was the main driver behind the profitability improvement in mobile cooling?

We have seen these improvements during the last few years, so I don't think that the quarter is that exceptional in comparison to what we have seen as improvements. I mean, it's clear that we are We are working on efficiency in the different factories, both in the US and what we are doing in Asia. We are improving our products as well. We are launching new products that is covering higher margins than we have seen historically. And we have been working, obviously, also on our channels. We are getting more from the sporting goods and a little bit less from merchandising, mass merchandising, which is having a positive effect on our margins. And our intention is obviously to continue exactly in the same way.

On top of that, we also have had some tailwind on some of the important raw materials that we have in that segment.

Yeah, perfect. Understood. And maybe just coming back to the strategy for mobile cooling division. Do you plan to add any more kind of adjacent product to your cooling box offering within that business? And also, how important are the hydration products for you?

It's a super important product group. And we are working on that. Without any kind of doubts, both under the Igloo brand and the Dometic brand. As you know, both Igloo and Dometic are positioned in two different ways. So we already launched one year ago the hydration part for Igloo. and we are working on the domestic side. We launched a couple of years, and it has been developing better than our initial expectations, but we are taking just now a new series that we are working on that we are going to launch in the future. So, I mean, you know, Agnieszka, as well as I know, that 65% of Yeti's revenues is coming from hydration. So that tells you how important it is, both from a revenue perspective, profitability perspective, but also from a branding perspective.

Perfect, thank you. And then on APAC, my last question really, minus 17% organic growth, is it solely the market or are there any changes that you see in the competitive landscape? It's very much the market.

The market. It's very much the market. The RV business has been super depressed as well. As usual, I mean, it's clear there, the RV industry is very much a global industry, and of course, very much impacted by inflation, interest rates kicking in everywhere. We had a delay, so especially Australia came in, the decline came in later. So it came in in reality in Q2 last year.

Yeah. Perfect. Thank you. You're welcome.

The next question comes from Fredrik Ivasen from ABG. Please go ahead.

Thank you. Good morning, Johan and Stefan. I also have to apologize. I got in to the call a bit late, so you might have discussed this already, but let's try. You mentioned in the report a sort of stabilization in the order intake. I'd like to dig into the statement a little bit more if you would be open to. So would you mind... maybe sharing how the order intake is developing in the various segments.

Yeah, but it's clear that we see tier stabilization both from the service and off the market and distribution, while the OEM side is still low, but a little bit better than we have seen in Q1 and Q4 last year and Q3. So Q3, Q4, Q1 this year, OEM was pretty negative. It's still negative, but not on the same magnitude. And then coming to service and aftermarket and distribution, it's a little bit the same. It was negative on Q1. It's pretty flattish in Q2. Slightly negative, but still much better than Q1, which means, obviously, that the backlog situation at the end of Q2 is also better than the backlog situation we had at the end of Q1. Then you have to keep in mind, obviously, that we're not sitting like in my former company with six months of backlog, right? So that's why knowing we know that the orange take, the back situation and the fact that comps should be easier since the OEM market, especially in APAC and Europe, started to decline pretty heavily in the second half of last year, should give us some, should bring some optimism on our numbers moving forward.

Thanks, that's helpful. And if you would dig into the OM channel, what do you see in marine versus RV, please?

I think it's pretty similar. Marine, and if you look also at the RV dealers in North America, there is still a negative sentiment among dealers in the North American market. very much impacted by all the tariff discussions just now, where people don't know what are going to be the consequences in the medium term. So if we look at the European business and if we look at the APAC business, we are a little bit more optimistic based on the fact that registrations are down 1% in Europe and pretty similar in Australia. And at the same time, its production has dropped quite dramatically during the last three, four quarters. So hopefully we will see improvements at the end of this year, beginning of next year. So I think to me, just now, it's very much about the American market. So the cycle is kind of moving as we expect it from a VN perspective. The question mark just now is very much America's due to the tariff situation.

Great. That's all my questions. Thanks, Juan.

The next question comes from Daniel Schmidt from Danske Bank. Please go ahead.

Just as a short follow-up one, Stefan.

On Marine, you did launch or it sounded like it was a big event at least with the gyro. And then maybe you commented on it already. Sorry if that's the case. But did that have any sort of meaningful impact on ordering take in Q2? Is that worth mentioning? Or do you see that having an impact in Q3 and Q4?

Yeah. So we see a positive order intake. So the number of units that we're getting orders is having an effect. But still, in relative terms, in comparison to the total revenues that we have on marine, is still not substantial. So percentage-wise, obviously, we compare Q2 with Q1. It's a massive improvement in order intake. But in absolute terms, it's still very, very limited.

We are happy about evolution. We are happy about how customers

Yeah, and those limited orders, will they be delivered this year or is that next year?

Part of that will be delivered already this year.

Okay. And do you have any views talking about Marine? I don't think that has changed because Brunswick hasn't reported yet that they are the biggest player and I think they still expect their top line to be up this year. That might change in in the Q2 numbers next week. But do you see the second half sort of holding steady in a totally different way than what we saw in H1 in the Marines?

I think you have... It's a mixed bag. On one side it's clear that our comms are becoming easier, right? Just looking at what happened during the entire 2024. At the same time, if you look at dealer sentiment on the marine side, dealer sentiment is negative still today, right? And they are the customers to the OEMs. So I believe that we need to wait for a few weeks. But again, as late as last week, we got the survey on dealer sentiment, and they are still of the opinion that the inventories are too high on the marine side. So it will be super interesting, obviously, to follow Brunswick, Malibu, and all the others. And then you have the European situation. You have the American and the European situation. The European situation, we know that Benetton has been very, very, very weak during the last few quarters. At the same time, as you know, we are also very much present on the megajobs and gigajobs, and they have been doing well. So Europe has been holding up much better than the U.S. markets.

Thank you, guys. You're welcome. Thank you.

That was the last question at this time, so I hand the conference back to the speakers for any closing comments.

Thank you very much to all of you for your attention and interest in Dometic. I will repeat myself by saying that I'm not happy, we are not happy with the fact that we are shrinking our size as a company, at the same time as we feel very, very proud of the job that we are carrying out as an organization, still delivering pretty robust margins and a very, very strong cash flow, obviously, which is also taking down the perceived leverage. So thank you very much to all of you, and I wish you a great summer. Thank you. Bye.