Embellence Group AB (publ)

And yes, welcome to the presentation of Ambulance Group's Q2 report for 2024. My name is Olle Svensk and with me today I have Karin Lidde and our CFO. But let's get into the quarter. Looking at the highlights for the period, we delivered a strong second quarter with sales growth of plus 13% and of that 12% was organic growth. And we delivered an EBITDA that grew from 8.9% to 13%. One should of course remember that this is versus a weak Q2 of last year. But it also means that on a market that is still soft, we are gaining market share. When we look at peers in the industry, we are actually performing better. Then I also want to mention that on May 21st, we held our first Capital Markets Day, where we presented an updated brand-focused strategy and long-term financial targets. Moving on to our segments. Well, brands grew with 5%, and it was Borås Tapeten Artscape that stood out and delivered solid growth. Colon Sun is experiencing a sluggish consumer demand in its home market, the UK, which is actually also their biggest one. And I have to mention that we are not satisfied with the performance of Papelina, but with a new management on board and in place, and we have initiatives underway to improve the situation. In the retail channel, which for all of our brands is actually the largest channel, we continue to see soft demand. But thanks to good performance in our two strategic growth channels, hospitality and direct-to-consumer, we were able to mitigate this. In our second segment, manufacturing, we are gaining market share in the Nordics and we recorded a sharp increase of our net external sales and we more than doubled the revenue. But let's have a look at some of the brand-focused sales and marketing activities that has taken place during the quarter. We have participated at a few larger international events like Salone del Mobile and Fuori Salone, both taking place in parallel in Milano. Salone del Mobile is actually the most important of all fairs around the world in interior decoration, design and furniture. And this year, it reported an increase of visitors with more than 20%. So there is a lot of buzz in the industry, I have to say. Wolandecco also participated at HD Expo in Las Vegas. And this is an event especially focusing on the hospitality sector in the western part of the US. But we also complemented with our own targeted brand events. Borås Tapeter continued launch events for Orangeri. Col & Sund held its second salon at our flagship gallery in London. And Papelina held PR events in Paris and Stockholm, preparing the ground for the brand's 25th anniversary this fall. And if you look at the picture on the right, that is actually from a hospitality event in Lisbon that Wall & Deco did together with its new distributor. Okay, you know, we are a brand focused company and I must give you a flavor of some of the exciting things that plays during this quarter. I believe everyone knows Harrods, the iconic British department store. And for their 175th anniversary, they invited seven different brands to collaborate with and make exclusive products with. And we are grateful that Cologne Sun was one of these seven brands and actually the only one in interior decoration. In June, at the joint event, we gave a preview of Couture Carousel, and this is a result of a collaboration between the two design teams, the one at Harrods and the one at Kohl & Son. Wallpapers and cushions is the result, and the products will be available from mid-August this year. When Boråstapeter launched the collection Orangeri, the market reception was both immediate and positive, very positive. So during the quarter, we continued to present the collection and held a successful multi-day event in Stockholm, where both professionals and consumers were invited. In April at Salone del Mobile, the design for 2024 of our patented wet system with Wall & Deco was launched. It's a beautiful collection. Just take a look here on the picture on the left side. What a joy to have your daily showers in a place like this, right? Now over to you, Karin.

Thank you, Olle. Numbers in the second quarter are We reported a sales growth of 13%, reaching 191 million of sales compared to 170 the same quarter last year. The gross margin ended just above 60%, and the EBITDA margin improved to 13% thanks to the sales development. In addition, the operating cash flow for the second quarter was 43 million kroner, which is a big improvement compared to prior year. The two main reasons for this is of course the solid operating result, but also an improvement of working capital of around 20 million kroner. If you remember, we ended the first quarter with very high accounts receivable, especially in Borås Tapester and Artscape. The outstanding invoices from the first quarter have now been paid and we are at a more normal level of accounts receivable. The inventory has increased with 12 million kronor and that partly offset the positive development. However, this is a normal seasonality where we always build stock before the holiday period when our main factory is closed. The absolute level of inventory is 144 million kroner and that is somewhat lower than prior year. Looking at the sales and EBITDA trends, we are approaching 780 million of sales in rolling 12, and we are approaching almost 14% of EBITDA margin. After updating our brand focused strategy and also our long-term financial sales target in May, we also changed the segment reporting during the second quarter. The new segments that we report are brands and manufacturing. Olle shared some details before, but if we start with reviewing the brand's performance. Bråstapeter performed well in Sweden, partly thanks to many invoicing days in April following the early Easter, but also exports and primarily U.S. grew. Coal and Sun performs relatively well in a very sluggish UK market that has continued to develop negatively. Wall and Deco is flat and report positive development within hospitality that mitigates a continued weaker retail. Papelina reports 4% growth and a mixed market performance. Sweden and direct consumer are positive. Artscape continues their strong development with 19% of growth and continues to take market share in a growing US market. Looking to the manufacturing segment, which is the Borås Tapetfabrik, we are happy to report a growing sales from 12 to 24 million kronor and especially content with the fact that this is A mix of growth with existing customers that are doing well, but also new customers for the year. And over to you, Olle.

Thank you. Thank you. Well, here you see our updated brand focus strategy. And this is what we presented at the Capital Markets Day in May. If any of you still haven't read it, I invite you to visit our website to read it or listen in on the recording that we made on May 21st. Back to you, Karin.

And looking a bit at our updated financial targets, or really it was only the net sales target that was updated on the Capital Markets Day and The new target is to reach 1 billion of sales by 2028. In the middle column, you see the baseline where we started from in 2023. The current performance is that we report a rolling 12 net sales of 778 million kroner and a rolling 12 EBITDA margin of 13.9%. Our leverage is 1.2 times of EBITDA. And back to Olle for a summary.

So to sum this up, we delivered a strong quarter against the weak Q2 of last year. Net sales amounted to 191 million SEK, which equals to 13% growth. This means that for the fourth consecutive quarter, we delivered strong sales growth. our beta margin for the quarter improved and we went from around nine percent to thirteen percent at our capital markets day we presented an updated brand focused strategy focusing on organic growth and an updated long-term financial safe start the markets They remain challenging, but with signs of recovery. The exception is UK, where we believe it will take a bit longer for the market to be back to growth. Our strategic growth channels, hospitality and direct to consumer, which we expect to outperform the total market in these segments or channels, we are gaining market share. Well, that was all, and now we leave it open for questions.

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Okay, so thank you very much for listening in and I wish you all a great summer and hope to meet you or hear from you after the holidays.