Fagerhult Group AB

Thank you all for joining us today. I'm Niklas Willstrand, head of communications at Farwood Group, and it's my pleasure to welcome you to our Q2 2026 resource presentation. On the call today, we have our president and CEO, Bule Sonneson, along with our CFO, Oskar Wallsten. Bude will begin with a brief overview of our second quarter results, followed by a presentation of the strategic priorities announced as part of our recently published strategic review. Oskar will then provide a deeper dive into the group's financial performance. And to close, Bude will summarize the key points before we open the floor for your questions. We will start questions from the conference call participants and then take questions from the webcast. You can ask questions by pressing the pound key in five or in the chat window on your screen, and I will then read them out for Bodil and Oskar. Please note that today's session is being recorded and will be available on our website later today. So with that, I will hand over to you, Bodil. Please go ahead.

Thank you, Niklas, and welcome and good morning to everybody joining us today. So I will start with the word stabilization today. And we noted a stabilization in order intake noted already in April, continued through most of the quarter with order intake increasing to 2.68 billion Swedish crown in the second quarter. And sales also increased during the period. Profitability, although improved from Q1, remains below our expectations. And while activity levels improve, customers in several markets continue to postpone investment decision. And I wouldn't say that the general market conditions have fundamentally changed. In early July, we presented the priorities that will strengthen the group's performance and improve profitability. The first step and the first focus is to restore margins through cost reductions, efficiency improvements and a stronger focus on Europe. We also see significant opportunities to improve performance through closer collaboration across brands, markets and function. At the same time, we will continue to invest in innovation and in growth segments where we see the greatest long-term potential. And smart lighting is part of that. Several of these priorities is already reflected in our day-to-day operations. And during the quarter, we continue to see strong activity in energy efficient lighting and modernization projects. So Fagerhult secured several projects linked to the transition from conventional lead lighting solution as in well as important projects within healthcare, including the new emergency hospital in Västerås that's being built and Scandinavia's largest orthopedic center. Another example of how we strengthen the group's overall position is Tratotill V which is our French group company, which has now been part of the group for exactly one year. So the company has developed in line with expectations and the integration has progressed well. Synergies have been realized while the first projects in new markets together have been secured. So we continue to explore opportunities to further develop and working on possibilities together with Trout or TLV. in their international presence, in collaboration with other Group Rats. We also saw positive development in several growth segments, driven by long-term investment trends. Kepelon, when we look into public investment, secured new municipalities, reflecting the growing demand for smart lighting solutions, while Design Plan, our British brand achieved the highest order backlog in its history. At the same time, they could secure the project for an Opel factory in Germany and continue to expand its pipeline within the European data segment where they have a very suitable product portfolio. So that was a short summary. And if we then look into the numbers, we start with the Q2 numbers. And as I said, our order intake reached 2.68 billion Swedish during the quarter, which was up 8.6 compared to last year. And including for acquisitions and currency effect, the order intake was down with 0.5%. We see it as positive that while order intake exceeded 2 billion, which is always a milestone for us, it was not any single megadyl that made a difference, but rather many mid-sized steel, which we see as a positive indicator of the activity level. And net sales increased by 6.8% to 1.978 billion Swedish crowns. supported by acquisitions completed last year and favorable currency effects. And adjusted for acquisitions and currency movements, sales declined by 1.4%. Overall, the Group EBITDA before EAC was 113 million Swedish crown, which was a decrease of 16.9% with an EBITDA margin before EAC of 5.7%. So we're still not satisfied with that level, of course. We're working hard to get back towards our target. But as I said initially, still a stabilization compared to Q1. And earnings per share before EIC was 0.08 Swedish grand. and we ended also positively the quarter with an order backlog of 1.916 billion Swedish crown, which was up both from a year ago and from the first quarter. So we are moving forward with the implementation of our strategic priorities. But before we get there, let's look also at the half year numbers in brief. If we look at the year-to-date numbers, they are pointed in order intake to 4.37 billion Swedish crowns, a decrease of 2.3% or 8.1% adjusted for currencies, effects and acquisitions. And net sales amounted to 3.795 million Swedish crown, an increase of 0.2%. And when again, when we adjust for currency effects and acquisitions, a decrease of 5.2%. And EBITDA before items affecting comparatability amounted to 158 million Swedish crowns. And the EBITDA margins for the half year was 4.2%. compared to 7.9% in the corresponding period last year. And we have an earnings per share of minus 0.09 Swedish crowns for the half year. So then leave the numbers for the moment and let us go to the strategic review and priorities for future profitable growth. As you already know, we communicated the outcome of our strategic review in July, where we sent out a press release. Our vision remains unchanged, which is a world enhanced by light. The review confirmed the need to sharpen our focus and strengthen the group's performance. We are focusing on three key areas to improve our profits, grow our market share and build a foundation for lasting success. Our first, and we have three main priority buckets, and our first priority is to restore stability and resilience across the group. And that's where we started. And selected initiatives, including a cost-saving program, which is throughout the organization, combined with selected consolidation activities are expected to deliver an improvement of 220 million Swedish crowns, which was what we communicated in the press release. These effects will be realized gradually over the next six to 12 months. And we are already working on a lot of these activities related to the scope of the saving. They haven't yet had any impact on the Q2. The better result in Q2 compared to Q1 was to refer to the increased sales. So these activities will have an impact as we continue the year. And we will inform the market when we have executed on the activities. And the guiding star for us that we're working towards is a stronger focus in Europe, a laser focus, and a clear premium market positioning that will support the ambition of building a more resilient and a more competitive Group. The second priority is to improve performance through stronger execution and increased collaboration across the Group. This starts with clear responsibilities, greater accountability and a more effective way of working. So we, of course, will continue to have empowerment close to the customers in a decentralized organization, which is in line with our way of working. Responsibility for customers, sales, product development, production, operational excellence, and ultimately the P&L performance remains close to the brands and business areas. At the group level, we will strengthen governance around strategy execution, finance, HR, and IT, including both cybersecurity and AI. By sharing all the expertise we're having in the group, we will be leveraging the strength of our different businesses and we will collaborate where it makes sense. And in this way, we can approach much more effectively and better support our customers. Two concrete examples are that we have started to work much closer in an IT forum with the sponsor from the group and then leverage all the competence we have in the organization. We've also started a project to leverage our current footprint in Germany, where we have three German brands local brands and five additional brands in the group being present on the market, but with very limited cooperation today. And in addition to this, we have put an ambitious target for the next three year period based on high efficiencies, selected focus areas and better cooperation. And the third priority is to continue investing in innovation and attractive growth segments. Close customer relationships and the ability to develop solutions that meet changing customer needs remain a very important strength of the group. So demand for smart lighting solution continues to grow, where we had a very good first half year, while several other markets are supported by long-term investment trends. including defense, public infrastructure, data centers, and also retail. And during the quarter, we saw positive development in a number of these segments, reflecting the opportunities created by the underlying trends we all see on the market. Several of these markets are expected to remain attractive over the coming years, providing a solid foundation for future growth. We all know that the landscape in the construction industry has fundamentally changed the last few years and therefore it is important for us to be very agile and finding growth opportunities. It's important to defend the premium market where customers understand the benefits of good lighting quality and for us in many cases bespoke solutions. So if we try to summarize this and to conclude, our first priority to remember is to improve profitability and strengthen the foundations of the business. That's where we start. And as mentioned, we already have quite a few selected initiatives that are expected to deliver an earnings improvement of approximately 220 million Swedish crowns over the next six to 12 months. Nothing of this, as I said, is included in the Q2. At the same time, these initiatives will help to create a more resilient and cost-conscious group by further strengthening our presence in Europe and supporting the long-term development of the business. While our vision remains unchanged, as you can see it here, a world enhanced by light, the focus is on positioning the group for sustainable long-term growth. So continued innovation and increased exposure to new growth segments combined with an ambition to become top three player in selected European markets with a strong focus on some markets will support future growth opportunities and long-term value creation. We believe we need to be laser focused for the period to come. So as I said, restoring profitability comes first. then in the next step looking into accelerating growth once the profitability is achieved. And our ambition remains clear, a 10% EBITDA margin, and then in the second step, a growth of 6%, which is then primarily driven by organic growth. And we will not have an M&A focus in the forthcoming period. We also have a focus on networking capital with a goal of free cash flow of 6%, which for us primarily means a focus on reducing inventory. And that was a quick summary of our three main pillars in our strategy and how we're going to go from a vision to value creation. And with that, I will hand over to our CFO, Oskar Wallstein, to give you a much more detailed update on the financials.

Excellent. Thank you, Bodil. Good morning and welcome everyone to this call. This has been a stronger quarter compared to the weak start of the year. Order intake has developed in a positive way and the business areas, collection and infrastructure are the main drivers behind the positive development. Both business areas grew organically in order intake in the quarter. For the Group as a total, the gross margin is still a challenge as both production costs are higher than last year, as the sales mix is also unfavorable. Still, we see an improved EBITDA margin in professional, thanks to Trato TLV, but for the Group as a total, a weaker margin compared to last year, which is explained by weaker performance in our largest business areas, collection and premium. During the quarter, the Group reported 19.8 million SEK as other operating income, that relates to the Trotto TLV earn-out liability. Now, when the outcome for the first vesting period has been determined, the liability could be reduced and hence an income has been reported for the Group. While organic order intake declined by 0.5% compared to last year, total reported order intake increased by 8.6%. In the quarter, the order intake is negatively impacted by FX. The stronger Swedish krona is affecting our euro business in a negative way also this quarter. On the other hand, the order intake is impacted positively by acquisitions. By this time last year, our brand company, Trout & Thielvi, was not yet incorporated in our numbers. However, since the acquisition has now been part of the group for a full year, this will be the last quarter in which Strato TLV is mentioned as an explanatory item compared to the previous year. Sales decreased organically by 1.4% in the quarter, where FX had a negative impact by 19 million SEK where acquisitions improved the numbers by 171 million SEK, totaling to a net impact of 152 million. The second quarter's EBITDA margin landed on 5.7%, a decline by 1% compared to last year. The margin drop is mainly related to lower business volumes in our two largest business areas, collection and premium. The decline in sales in these business areas has negative impact on our profitability. In the quarter, we had a negative operating cash flow of 9 million SEK compared to positive 162 million last year. We saw a weakening in working capital also in this quarter. I will come back to more cash flow insights later in the presentation. Year-to-date order intake is slightly lower than last year. We see a decrease of 2.3% and an organic decrease of 8.2% year-to-date. The explanation lies in the weak first quarter. Q1 last year was a tough comparison period with a couple of large projects. Sales, on the other hand, are higher than last year's year to date, an increase by 0.2%, yet with an organic decrease of 5.2%. The EBITDA margin is 4.2%, which is lower than last year's 7.9%. The lower gross margin compared to last year is the main explanation. Cash flow year to date is negative 169 million SEK, which can be compared to plus 188 last year. But more about cash flow later. Sales development. The rolling 12-month net sales shows an increase in this quarter. We're back at the same level as Q4 last year after the dip in the first quarter. And looking at margin development, also the margin improved again in the second quarter as a consequence of recovery in sales. The rolling 12 development is, however, still impacted by the weak Q1 and hence a decline in the line chart. Moving over to the business area, starting with collection. In collection, the second quarter order intake of 894 million SEK entailed an organic increase of 2%. The improvement in order intake is coming from both IGUSINI and VEF. Net sales in the quarter amounted to 886 million SEK, corresponding to an organic increase of 1%. The EBITDA before IAC was 76 million SEK, which is lower than last year's 95 million SEK for the second quarter. The EBITDA margin is consequently lower as well, 8.6% compared to 10.7% last year. The demand on collections home markets has been weak during the quarter, despite that Egucene and LeadLinear have succeeded in delivering growth in sales, which compensates for the development in the other brand companies. Premium delivered an order intake for the quarter of 608 million SEK, entailing an organic decline of 4.4%. Net sales for the quarter totaled 601 million SEK, and EBITDA landed on 60 million SEK. As you can see in the chart, both numbers result in a decline compared to last year. The EBITDA margin was 10%, which represents a weakening compared to the second quarter last year when it was 14.5%. Just like business area collection, premium encountered a weak market, especially in the new construction sector and generally fewer larger projects than normal. Moving over to professional. Business area professionals order intake for the quarter increased to 378 million SEK, mainly thanks to the acquisition of Trato TLV. Net sales for the quarter totaled 366 million SEK with an organic growth of 10%. Organic sales growth remained strong in the second quarter and was mainly driven by a strong quarter in the UK. compared with the corresponding period of the previous year. In France, the retail sector also continued to perform well, driven both by existing customers and by new business opportunities, where we are registering increased demand for retrofit solutions. In addition to the organic growth in net sales, Professional also gets a positive impact of 164 million SEK in net sales from Trato TLV. EBITDA before IAC amounted to 8 million SEK, which in turn resulted in an EBITDA margin of 2.2%. The lower EBITDA margin in the business area is primarily related to brand companies Eagle and R-Lite. Trotter TLV has now been a part of the Foghult Group for one year. The company has delivered in line with expectations and the integration has progressed well. As mentioned earlier, this is the last quarter we will refer to Trotter TLV as an explanatory item compared to last year. And then looking at infrastructure. Infrastructure's order intake for the quarter totaled 170 million SEK, corresponding to an organic increase of 16%. This was a result from design plans securing a significant UK prison project in the quarter and setting a new all-time high for the company's order backlog. Veco also showed signs of recovery in the form of a project for an Opel plant in Germany, as Bodil mentioned before. and a growing product pipeline in the European data center segment. The net sales for the quarter total 164 million SEK representing an organic increase of 2.4%. The EBITDA margins is however still negative and landed on negative 2.2% for the quarter. The profitability of infrastructure is still suffering from low gross margin and fixed costs that remain at a high level. The unfavorable development of Ivalos is unfortunately weakening the business area as a whole. Looking at the cash flow, the operating cash flow in the quarter was negative at 9 million SEK compared with a positive 162 million SEK in the same period last year. The large difference in operating cash flow compared to last year is mainly explained by adjustments for non-cash items, which amounted to as much as 121 million SEK last year. In addition to that, we saw a weakening in working capital also this quarter. Working capital has developed in an unfavorable way. It is the customer receivables that have increased during the quarter and hence affected the cash flow in the wrong direction. Yet as the increase in customer receivables is a consequence of higher sales, we don't see a risk in this particular development. Net debt. The recent investment in Trato TLV and Capelon has increased our net debt to a current level, which is higher than before. In the second quarter, our net debt to EBITDA ratio has increased again because of the development in profitability and weak cash flow. Earnings per share. Earnings per share before IAC landed on 0.08 SEC per share for the quarter. Thank you for your attention, and now back to Bodil.

Thank you, Oscar, for the financial numbers. So I'll make a short summary before we move over to questions. And I will use the same word as I used initially, and that is we see a stabilization. I think that is what characterizing the quarter. And the stabilization in order intake that we saw starting in April continued through most of the quarter, although many customers still remained cautious with investment decisions. So they take a little bit longer than normal. Although, and we haven't seen when we look at the general market conditions that they have changed substantially, but we see still that we have markets and segments where we have strong activities. And also we see still the activity remains strong in energy efficient lighting, where we see lead conversion projects and several, as I've mentioned before, new attractive growth segments. At the same time, we have taken steps important steps to strengthen the group. So with the first focus, as I said, on profitability and improving profitability, also increasing efficiency and strengthening our competitive position. So we have selected initiatives, including a general cost saving program for the group and other selected initiatives in terms of consolidation. that are expected to contribute to approximately 220 million Swedish crowns in earnings improvements over the next six to 12 months. While there is still work to do, we are building on the strength of the group. A stronger European focus, increased collaboration across brands and markets, continued innovation and greater exposure to attractive growth segments such as defence, public infrastructure and data centers will provide a solid foundation for a long term profitable growth. We also believe that both outdoor and indoor smart solution will be part of our future growth drivers. And with that, I will hand over to Niklas for questions and answers.

Thank you, Bodil and Oskar, of course, and thank you for presentation. We will now start with the Q&A session and we will start with questions from the participants on the conference calls. So I will leave it over to the operator to take your questions.

Thank you, Niklas. As a reminder, if you wish to ask a question, please press pound key five on your telephone keypad. The first question is from Lara Motadi from ABG Sandal Collier. Please go ahead, Lara.

Hi, just a couple of questions from me. First one on the strategic review. How should we sort of think about the phasing of these 22 million kronos? So how much of it lands in 2026 versus 2027? And sort of a follow up on the same theme, what restructuring costs should we sort of expect alongside it?

Yeah, I can take that. Thank you, Laura. So I would divide it into two buckets. One bucket that is general cost savings, OPEX, if you like, and that will be 100 million SEK and the ambition we have the plan we are executing according to is to take that out during the second half of this year which would result in a run rate reduction compared to 2025 to 2027 of 100 million SEK less in spend. The remaining 120 million is strategic activities that is going to have a positive impact on bottom line and we're aiming to get those done in Q4, but it might spill over to Q1 depending on on the market conditions, if that helps.

Yes, and also on restructuring costs.

And the restructuring costs will be quite high. We're probably going to see a restructuring cost around 350 to 400 million SEK, which will end up as a one-time cost in IAC.

Okay, great. Very clear. Thank you. And just on the gross margin, you had a decline in the quarter. You talked a little bit about production costs and mix. Can you maybe help us understand how much is production costs and how much is mix?

I would say it's... 8-85% is related to mix and very much related to the large projects that we had last year. So it's 15-20% of it is related to actually increased of the prices that goes into the manufacturing process then.

Okay. Thank you. And you also mentioned that orders have stabilized throughout most of the quarter. What are you sort of seeing in July?

I don't know. Is that something?

I think it's a bit too early to say, Lara. If you look into what we were saying, we saw As I mentioned, and I think we said it already in the earnings call that we had in the beginning of May, that April was good. And we saw that continuing. Then you always have normal changes. You have May with a lot of holidays. But I think we saw a very strong June as well in general. Then if I look into the longer indicators, we don't see a fundamental difference there. as where it goes. So I would say what we've seen in Q2, it seems to continue. But then it's always you know, we are we are even though I said it's positive, we didn't have a mega project, I think that's something we should listen to. But then you always have a you have some weeks which are better than others when you have projects. So and I think we have where we have the benefit of having those southern European and northern European businesses. So the summer tends to equal out from vacation periods.

Okay, thank you. That was all from my end. Thank you very much.

Thank you, Lara.

The next question is from Oscar Rundqvist from SEB. Please go ahead, Oscar.

Thank you and good morning. So my first question would also be on the outlook. I think the tonality was quite unchanged, but still accelerated through the quarter and saw a pretty sharp increase from the Q1. So just have any question on how to read the outlook comments? given the positive momentum, which I interpret at least. Also, if you have seen any impact from the EU building directive performance or performance directive that was implemented recently. Thanks.

I would say, I think I've said it before, is that it's always positive when we have water intake above 2 billion. That's for us a benchmark. I think you should look into that. We don't give a forecast or an outlook for the future, but that is one indicator. What I also said is you can look at the order backlog, which is better. I think it was 6.3% compared to Q1 and 5.4% compared to Q2 last year. And then when you look into... The landscape we have, I mean, there's nothing that has fundamentally changed in the building market since last time. I think what we see is that we see the change. So we see that the segments I was highlighting, whether it's data centers, public spending, and when we speak about public spending, we see healthcare. I see a lot of healthcare activity around Europe. And also we see on the retail side, We see positive activity. So I think the trends that we've been seeing for a while, they're getting stronger. And I also said that we have the products for those segments. We have more work to do on working on the market side. And that's what we're currently doing. So we're building our pipeline on the data center side of things, for example. And we're doing the same in the defense markets. So a different landscape compared to if you go back two years. And I think that is getting more and more obvious that that's the way it is. So we need to be agile. The question about European performance of buildings directive. It's a good one. I can't give you a very saying we see a big difference, but some of these public investments that we are seeing, I think some of that is maybe also driven by the European performance of building strategy. I would estimate so.

All right, thank you. And also, I think you touched upon in the CEO letter, I think you touched upon competition from low-cost actors or maybe not competition. If you just could expand that a little bit. Is it increased competition from low-priced actors or is it more that the underlying demand is more shifted towards low-cost products?

I think when you have a tougher market situation in general, I think then you see more low-cost competition. So we see it, I would say, in the entry-level segments. I mean, we are premium positioned, and you heard me saying that defending our position on the premium side of things is very, very important for us. So I would say we all see somewhat higher activities from low cost importers. Maybe there is a stronger focus from the Chinese competitors into Europe because of the of the tariff situation in the US as well. So somewhat higher competition, I would say yes, in the entry level segments.

Perfect, thanks. Then just some follow-ups on the cost initiatives. Oh, sorry, did you have?

No, go ahead.

Go ahead. No, yeah. No, some follow-ups on the cost initiatives. So just first of all, to clarify, the 220 million, so you say earnings, would that be EBITDA or would that be earnings, including that you expect some positive cash flows to reduce the debt levels? and also the 120 million in sort of mix effects. If you could just clarify that a little bit. So are you sort of aiming to increase the exposure to some high margin brands or what's that driven by? Thanks.

Yeah. Thank you, Oscar. So the 120 million is EBITDA improvement. to start with. And it is about addressing our cost base, which means that we will reduce the cost base, the structural cost base, if you like, which will result in an EBITDA improvement of 120 million.

All right, thanks. And Just to sort of get the baseline for the 220 million, what would be a good baseline if we should sort of evaluate that afterwards?

Is that the H1, Ibiza? Yeah, I would say Q1.

Yeah, so Q1 run rate sort of. Yeah, if you annualize that. Perfect. Great, thanks. And then just the margin in professional, I appreciate the comments about Eagle and Arrowlight explaining those, but can you expand a bit more on what you see in the margin? Would that be cost pressure from production cost or is it just a pure mix effect? So in those brands we have

seen a slight decline in business performance, which results in negative impact on the business mix coming from those two brands into the business area.

All right, great. And then I think orders in collection was a bit better, and I suppose that would be a positive driver for the gross margin ahead. Is that correct to interpret?

That is a good assumption, I would say. Yeah.

Okay, thank you. That was all for me.

The next question is from Mats Lis from Kepler Chevre. Please go ahead, Mats. seem to have some problem. I'll try to activate him again. Now Mats, your line is open.

Okay, thank you. Just coming back to the cost savings there. You mentioned 220 in cost savings, but the earnings impact, the EBITDA impact is 120. Was that right?

No, no. Yes, that's a good question. So the full impact is 220 million on EBITDA. So you should see an improvement of EBITDA of 220 million.

And maybe to add on to that, Mats, good morning, is that what we were saying before is that 100 million is all around the business where we're doing cost savings. And 120 million are targeted to a few of the businesses where we're working on strategic reviews, which have more of a strong structural impact. So... We can't communicate more around that today, but when we have finalized those, we will come out with more communication around it.

You just mentioned these overall numbers and you don't have any comments on which business area is more affected?

No, we will do that when we when we will communicate. We only say this is what you will see as a result of it. And then as soon as we are ready, we will let you know exactly what we're doing. But we have a strategic review and a few of our businesses.

And well, costs to implement these measures are sort of could be expected to be taken this year or is it sort of balanced between 26, 27 Say again. You mentioned the 350 or 400 million restructuring charges to be expected and should we expect them to be taken as one of this year or is it more sort of balance between the two years?

Those are related to transactions essentially and the drivers is more than one activity which means that It depends on when those activities happen in time. I would say it's spread over Q4 and Q1, but we don't know the exact timing of that today. And the bulk of it is non-cash flow impacting.

Okay, so it's more that you sort of reduce the... through some factories and maybe some intangibles and that kind of costs.

That is probably a good conclusion. Yeah.

You also mentioned that you will continue to focus on smart lighting solutions and those kinds of trends. But you don't see any sort of opportunities there to maybe cooperate with other companies and you will continue to focus on your own solutions there.

Yes, we will continue to focus on modern solutions, both on the indoor and outdoor side. Then, having said that, of course, we see partnership opportunities as well. But we're seeing it's being essential for us to have an offering. And if you want to defend the high-end and premium side of things, we think this is a very important ingredient for the future. And if you look into the indoor side, which is the organic response, we had a very good for the first six months in terms of increase of sold organic response sensors. And we also mentioned in the reporting that we took additional municipalities in Sweden, you saw Harbo and Eslöv. And we also see ourselves getting more, we're widening our scope with the cities we're working with. If you want to learn more, there is a new website from Capelon which is capelon.com, where you can go in and learn and read more about it. It is also showing very clearly what are the advantages. And I think when we spoke about before, where we're saying that municipalities is important and public spending for the future, I think this is one of the areas which is interesting going forward. And both, I mean, they see very clear benefits of maintenance. You have the energy efficiency, but it's also future-proof solution for the municipalities. You can see, for example, if you're driving around in Stockholm, there we have partnerships around traffic. So when there is a lot of traffic, we have a different lighting in the city compared when there is less traffic. So that's a very concrete example of what you can do for the future, thanks to the CapeAlong platform.

Great. And just, well, maybe the more shorter amount of orders seems stabilizing. And what's the in for out there? Should we expect a normal seasonality? I'm not sure what that is, actually, because they have changed structure somewhat. But the third quarter is normally somewhat slower seasonality, even if the infrastructure projects are running there. Should we expect the orders there to be sort of delivered during the second half and maybe in the third quarter? Could you say something there?

It's depending what you mean by seasonality, Mats, what you refer to. If you refer to how it was way back?

No, I mean the normal holiday season. But I know you have these infrastructure projects that are maybe running more in the Well, summer months and so on. Could you say something about being out there? Are these orders expected to be delivered here in the third quarter to a large extent?

I mean, as we see, we always have a mix in our in our order base. I wouldn't say that there is any particularity in there. It's a mix of more longer and shorter term projects in the in the order pipeline. So there is no Not that we see today any specific particularity around it. Then, as you said, we have, as I said before, you have always a little bit slower in the Nordics in July and a little bit slower in Southern Europe in August. But that's that we have every year.

Yeah, and I guess you have you have seen some extra costs coming up and it seems that competition is sort of quite tough. But do you expect to be able to pass on the cost increases or should we expect the margin squeezer short term before the sort of cost savings are being implemented?

I think we all learned and trained in terms of costs, passing on cost to customer when it's a question that we're having increases that's coming in. And we will do the same that you saw us doing in the past if it's related to There are no more questions from the telco at this time, so I hand the word back to you, Niklas.

Thank you so much, Einar, and thank you for the questions. We have a few questions here. You mentioned and talk a lot about innovation. What actions do you take to boost innovation while simultaneously cutting your costs?

I think that's a question about what you protect. So, I mean, when you cut costs, I think we have a lot of things to do where we can work more together. So you can cut costs in things which is not impacting innovation. And that's what we're trying to do. So for me, there are two main parts that we need to safeguard. One is product innovation, and the second one is on the sales resource side. So that we have enough people on the ground. But I think we have maybe the benefit of having a lot of things in between where we can be much more efficient than we've been in the past. One example, maybe Oskar, you want to highlight a little bit more if we look into purchasing, for example.

Yeah, you know, absolutely. I think to start with, it's a little bit about accelerating and breaking at the same time here and be laser focused to Bolu's earlier point. to make sure that we're not cutting everywhere, but we cut where we can, but invest where we need. And purchasing is a great opportunity for us where we've been working both on indirect spend, but also, as we mentioned before, bringing the IT organizations together has enabled us to renegotiate some of our IT licenses, which of course then gives us a good saving bottom line. But we also work in the group as one entity, if you like, where we negotiate prices on electronics, but that is also an opportunity for us going forward to expand that activity to more areas outside of electronics. As Bodil just mentioned, aluminium is a very good example where we to date actually have not worked as a group in the in driving purchasing activities. But I think there is a good opportunity to benefit from the scale we actually have as an organization.

Okay, thank you. And earn out re-evaluation in Trato TLV. How much impact on EBTA in Q2 and half year? How does Facing looking for the timing of payments related to the remaining contingent liability of SEC 123 million?

Yeah, that's a very good question. So the earn out is program is over three years. So we just finalized the first year. And we had a positive impact of 19.8, as we mentioned in this quarter. And that is also the sum for the First half year. So we just do this transaction once a year. Next time we'll be in Q2 next year. And the outcome of that, we can't really tell today because it depends on the performance of Trotto TLV.

Okay.

Thank you.

And also another question here regarding Capelon. Do you have any explanation or more information regarding the expansion outside Sweden? Are there any new progress?

Yes, if we look into it, I mean, what we've said is we're focusing first on Sweden and then on the Nordics. And I think we reported in the last quarter that we've seen first winds both in Finland and in Norway. which is positive. So we are having, and then also expansion in Sweden. So currently focus on Sweden and the Nordics. And then we will look into Germany as the next focus, but that's not for this year. So we will come back to you on that.

Okay, so thank you all for joining today's webcast. We truly appreciate your time and active engagement. And on behalf of Fargo Group, we would like to wish you all a great summer ahead. Thank you, Niklas.

Thank you, everybody.

Thank you.