Dustin Group AB (publ)

Thank you. Good morning and a very warm welcome everyone to our Q1 report presentation for Dustin. First of all, I want to say that I'm happy to be here today presenting my first quarterly report as CEO of Dustin. And with me here today, I have Julia Lagerqvist, our CFO here at Dustin. So let's start with the presentation. I'm glad to report a quarter with organic growth, improved profitability, robust cash flow and reduced leverage. Net sales development was positive in the quarter with organic growth of 18%. The performance should partly be seen in the light of a weak comparative quarter. But apart from that, the positive development was driven by our LCP segment and particularly the public sector. Gross profit increased slightly while the gross margin fell to 13.1% compared with 14.3% last year. The decrease in gross margin is explained by strong public sector growth, a high share of PC sales and continued price pressure in the Netherlands. Adjusted EBITDA increased from 21 million to 83 million, driven by efficiency measures implemented, a weak comparative quarter and higher sales volumes. The margin increased to 1.5% compared to 0.4% last year. Cash flow from operating activities increased to 381 million compared to a negative 42 million last year, and this is primarily driven by improved net working capital. Leverage, measured as net debt to EBITDA, dropped to 3.1 times, and this is to be compared to 5.2 times last year as a result of the strong cash flow. In the beginning of the quarter, we also updated our sustainability targets in line with the latest research and to meet customer needs. And the updated climate targets are approved by science-based target initiative. And if we then go to the next slide, and as I mentioned earlier, organic growth development was positive at 18% in the quarter. And if we look at this in more detail, around 8 percentage points of the organic growth are explained by weak comparative quarter that was affected by the implementation of the shared IT platform we have in Benelux. The effects of this will also be visible in the second quarter since part of that lost sales last year was recovered in the second quarter last year. The signs of market recovery we have seen in the quarter have been particularly evident within the public sector where the migration to Windows 11 is driving investment needs. the strong underlying LCP growth contributed to around 11 percentage points to group organic growth. Demand within the SMB segment remained cautious, and that resulted in a slight negative contribution to group organic growth. If we look ahead, we see continued market uncertainty also in 2026, which is also related to the shortage of memory components that we expect. This could negatively influence market development, And it is yet too early to predict the full effect of this, but we take a prudent stance and want to be proactive and are already now having a close dialogue with both our customers and our partners to make sure to mitigate the situation. And with that, I would like to hand over to our CFO, Julia, to give you some more details on the financials.

Thank you, Simon. Very happy to be here with you today. Let me move to page four and look at the NCP segment, the large corporate and public business. And sales in S&P was 4.0 billion second a quarter, or 24% plus versus last year. The organic growth was 28%, so we continue to see a large negative Forex impact from the strength in second this quarter. The growth was mainly driven by increased demand in the public sector and mainly related to the PC upgrades due to Windows 11 migration, as Simon was just talking about. We saw strong growth in Benelux, both related to large rollout, but also the effect of the weaker comparison quarter, as just mentioned. In addition, we had strong growth in both Sweden and Denmark, while the situation was more challenging in Finland. As said before, we do see large volatility in sales between quarters in the S&P. The gross margin decreased versus previous year. The continued price pressure in the Netherlands had a negative effect on the margins. We also saw continued effect of some larger contracts with low margins. On a global level, there was also a negative customer mix effect with the larger share of public customers that has lower margin average, which then had a negative impact on the total average margin. We continue to see an increase in take back, which had a positive impact on both in margin and in beta, and we also saw some positive development in our private label business versus last year. The improved cost structure, mainly thanks to the restructuring program that is now fully executed, had a positive effect on our bottom line, and overall this led to a segment result of 70 million SEC versus the low 11 million last year, and a segment margin that ended at 1.7% compared to 0.3% last year. As said, the last year EBITDA was impacted by the implementation of a new IT platform, which then shifted sales towards Q2. Then we moved to the overview of SMB segment on page five, where sales landed at 1.5 billion SEC or 5% below last year. Also here, we saw the negative Forex effect and excluding this, the decline in sales was 3%. You see some signs of stabilization, but customers remain cautious due to the ongoing economic uncertainty. You could also see that our strategic decision to move away from the E2C business, which also meant less activities during Black Week, had a negative impact on our sales. From a geographic point of view, Sweden, our largest market, showed stable sales, while the other markets displayed declining sales. Looking at product mix, we saw that the share of software and services decreased in the quarter to 10.7% versus 12.4% last year. This mainly linked to our focus now on standardized services, meaning that we see churn on non-standard services. Positive to note is that the gross model improved last year in most markets, thanks to continued price discipline. Improved cost base from the cost saving program protected the segment result, which increased to 53 million SEK versus 50 million SEK last year despite the lower volumes. The segment margin ended at 3.6%, which was an improvement versus last year at 3.2%. Moving then to page six, you have an overview of the development of leverage versus Q4. Leverage landed at 3.1 compared to 5.2 last year and 4.3 in Q4. Looking at the waterfall chart, where we compared to Q4, we see a total improvement of 1.2, of which 1.0 was related to operational improvements, and 0.2 was related to an updated definition of net debt. More of this in just a few seconds. But looking at the operational improvement, here we see that the improved operational results that we have just reviewed led to improved leverage of 0.4. This then as we rolled out the very poor comparison photo. We also had a positive effect from improved cash, which was mainly driven by improved networking capital. This improved leverage with 0.5, and I will talk more about cash and networking capital in the coming slides. In addition, there was a small positive forex effect and slightly lower leasing debt, which also contributed positively. That is the other effect in the graph. Then, we have in the quarter updated the definition of net debt to exclude leasing related to service deliveries to our customers. This effect is quite small, 0.2, but we have deemed this to be more in line with industry standard and better reflecting our financial risk. Overall, we are, of course, very happy to deliver this improvement in leverage after a period of higher levels and to be more in line with our targets. Moving to cash flow and capex on slide 7, we see that the cash flow for the period was plus $289 million versus minus $149 million last year. So a great improvement. Looking at the details, we see that the cash flow from operating activities before change network capital was $9 million SEC. This is impacted by a settlement of old tax debt. Cash flow from change network capital was $373 million SEC, coming from a high level in Q4. And we normally have a positive seasonality effect in Q1 versus Q4. But this was also the result of some targeted actions. We'll look more at net real capital on the next slide. In total, the operating cash flow was 381 million in the quarter. Cash flow from financing activities is mainly due to repayment of leasing debt and was at similar levels as previous quarters. Looking at CapEx, we see that the investment in the quarter was 46 million out of which 41 affected cash flow. This was mainly linked to IT development investment and slightly lower than last year. Coming then to page eight, we look at the net real capital. Networking capital landed at 139 million, a clear improvement versus last year at 267 milliseconds, and also a clear improvement versus the previous quarter, Q4, then at 477 milliseconds. As I said, we normally have a positive effect versus Q4, as Q4 is impacted by a negative seasonality effect, but also a result of specific actions to reduce the previous higher levels. The main driver is reduction of inventory with close to 300 million improvement, Here, our actions to reduce are now giving effect, mainly linked to Benelux. We also had somewhat higher sales than expected in the last month of the quarter, which had a positive effect. And we are now back to our target levels. Account receivables were stable versus last year, despite growing sales, supported by actions to settle all receivables. As I said before, we always have some timing effects in individual quarters, but our long-term target for entering capital remains to be around minus 100 million cents. And with that, I hand back the word to Samir.

Thank you very much, Julia. So, to summarize the quarter, organic net sales grew 18%, driven by strong development within LCP and the effects of a weak comparison quarter. Gross margin decreased due to strong public sector growth, a high share of PC sales and continued price pressure in the Netherlands. The adjusted EBITDA margin improved primarily as a result of the efficiency measures implemented last year, a weak comparison quarter and higher sales volumes. Cash flow was strong and our leverage decreased to 3.1 times net debt to EBITDA. Moving on to the market outlook, we have seen signs of market recovery with gradually increasing demand in the past two quarters. But we know that we continue to live in an uncertain global market that now also has some uncertainty coming from the expected shortage of memory components in 2026. And with that summary and before we go into the Q&A, I would like to take the opportunity to share some reflections from my first months here at Dustin. I've spent these two months meeting many of our customers, employees and partners to get a really good view of where we are and what we need to do. What I see is that we have a strong position in all our markets and potential to move from there. But I also see that we have a long way to go to get to where we want and need to be. Several improvement measures have been taken during the past year, such as updating the strategy and implementing a cost saving program. But we're still in a challenging situation. And as we've already mentioned, we continue to see uncertainties in the market. So to improve results and to realize the potential we have here at Dustin, we will do that by focusing on strengthen the work we do with customers and sales, increase the pace in execution of our strategy where we have full focus on our B2B customers and shift our service offering to a standardized services. And of course, continue to drive efficiency improvements. So with that and that presentation, let's open up for Q&A.