Fasadgruppen Group AB (publ)

Hello and good morning everyone and welcome to this Q1 call. And here in the room we have our CEO Martin Åkesson, our CFO Kasper Tamm and me, Magnus Blomberg, head of IR. With that being said, I hand over the word to Martin. So please go ahead.

Thank you, Magnus. And good morning also from me to everyone. I am glad to present the Q1 results for Passagegruppen today. So let's dive into the presentation. So first of all, we implemented a new organization here in Q1, a more flatter organization and partly new group management team as well. And I'm pleased with the development so far, with the organization in place and the new group management team. It's been well received throughout the organization. In the quarter, we saw a continued organic sales decline, roughly 10% down. And that was mainly due to the low new-build activity we've seen in the market pretty hesitant markets around new build activities still and pretty early to tell here where the new build market is going but in the quarter at least we saw still muted activity. In Q1 we also achieved an adjusted EBITDA of roughly 77 million compared to 20 million the same period last year, meaning a margin of roughly 6.5% compared to 1.9% a year ago. It was a strong contribution from Clearline in the results. We'll get back to that. In the important order backlog, we saw an organic growth by roughly 4%, mainly driven by the Swedish entities. and that was the first organic improvement in your backlog in the Swedish entities since 2022 so that's quite positive as we see it then for the first time we also present our new segments for transparency reasons mainly and then we've divided into three divisions or segments called Total Solutions. The Total Solutions segment, that's where we mainly have the full ownership of the project. We coordinate various services on the building envelope. That's the main focus for the Total Solutions segment. Whereas in the Specialist Solutions segment, We provide a niche service and mainly work as a subcontractor. In Clearline, it's quite obvious it's only Clearline and we have it as our own segment due to its large importance for Fasagripen. And then looking at our net debt to adjusted ebda pro forma um that came in at 3.25 times here in the end of march and uh that's down slightly from q4 it's noteworthy and uh still focus here on taking leverage back allow below 2.5 in accordance with our financial goals So moving on to net sales, we saw a total increase of 12.2%. And as I mentioned, it was down roughly 10% organically. And some more flavor to that, if we divide it into various geographies. In Sweden, we saw double digits down. In Denmark, it was slightly up. Norway and Finland, slightly down. And in Sweden, as you mentioned, especially when we saw continued low activity in the new build. Remember here that back in, go back to 2023, whereas it was an okay new build activity, there were some spillovers into Q1 2024. And that affects these numbers. Then, if we move on to our segments, our new segments, total solutions segment was down roughly 10%, of which then 14% was organically, and specialist solutions was actually up 3.4% in total, but down 6% organically. Both of these segments were mainly affected by the lower activity And then Clearline had sales of 174 million. We don't have a comparison number here since they were acquired in the last of October here last year. Yeah, move on. Then looking on the results on an adjusted EBITDA level. As I mentioned, the result was roughly 77%, margin of 6.5%. And all in all, you could say, of course, Clearline is performing according to plan, which is important for us, obviously. Then of these, 77 million stood for roughly 61 million of the adjusted EBITDA. Looking at the total solutions, we came in at an EBITDA level of 23 million, a margin of roughly 4% compared to 5% a year ago. On specialist solutions, we saw an EBITDA level of 13.5 million, a margin of 3.2% compared to 1.3%. a year ago then looking at the total adjustments of the group it was roughly 2.5 million so nothing out of nothing special there really and i'm pretty glad to see that the beta if you took it take a look at it in the last 12 months have improved here if you compare Take a look at the graph on the right-hand side. The trend is going in in the right way. And then moving on, take a look at order backlog. As I mentioned initially, we saw an organic increase in the order backlog of roughly 4%. And that was mainly driven then by renovation demand. and if we take a look once more at the various geographies it was quite flat development in in denmark norway was actually down significantly compared to last year and finland significantly up in sweden was also strong set of numbers compared to to last year here, if you take a look at the organic order backlog. Then, obviously, the strong increase in the total order backlog was heavily affected by the Cleveland acquisition, which was not part of the group a year ago. So now we've reached an order backlog of roughly 4 billion here. When we take a look at the order backlog margin, that was pretty stable compared to the Q4 numbers here. So nothing really dramatically in the order backlog margin since Q4. If we take a look at our various segments, in total solutions, we saw an organic decrease of roughly 2.2% in the order backlog. but up somewhat and then on a total level. Special Solutions, we saw an organic increase actually by roughly 9% and also then up on a total set up level. Then Clear Alliance, order backlog came in at roughly 800 million Swedish, somewhat affected by FX. and what you could say in general by the clear for clear line was in a very strong demand throughout the quarter and their kind of niche services is still very much in need and going forward as well Some general comments as well around the market. We've seen obviously lower interest rates and all in all, that's net positive for us and our customers. And we've seen, especially then in public tenders and housing associations, positive development around the demand situation. Then moving on to cash flow. Since we've seen now that the business is ramping up, that has had an effect on our cash flow. So we are, because the net working capital is roughly minus 127 million. And that's an unusually, I could say, strong number in one way because it's a net positive for us that the business is ramping up but of course it negatively affects our cash flow in that instance then we also have a one-off that is then come in conjunction with the clearland acquisition of roughly three million pounds that was paid out here in the quarter it was a delayed payment in conjunction with the clearland acquisition yes moving on okay we took a look at the financial capacity in our net debt we saw the interest rate was pretty stable we continue with the interest period of one to three months and as i mentioned initially the net debt to adjust the dbt pro forma came in at 3.25 somewhat down compared to q4 and this is obviously our focus area for us we continue to monitor this and going forward as well yes okay then we wanted to give also a deep dive in a historical cash flow for clear line since it's so big a part of the group and we wanted to give some granularity and transparency for Clearline all in all Clearline delivers strong cash flow with low capex needs and as you can see in the table on the right hand side if we take a look on the The three-year period that is closely similar to Fasalgruppen's fiscal year. Remember, Klärland had a fiscal year in the end of March. But then the three-year average of the cash conversion is roughly similar, as you can see. So Klärland had roughly 87% cash conversion. similar to what Fasol Groupen had in roughly the same period. So we can expect similar pattern as Fasol Groupen in cash conversion wise going forward. Hopefully we can improve it somewhat. Then just to clarify, there is a line here called EOT contributions and in the clear line statement that is then connected to So when Clearline acquired, we could say that the employees and the management acquired the company from the entrepreneur and repaid throughout these EOT contributions to the entrepreneur. It's just important to note that was a big, you say, distortion with the cash flow if there were any questions about that then we've shown this now what what happens so to speak so nothing unusual there and with that said i want to reaffirm our priorities now and forward so still focus on profitability and leverage obviously this is the same as we mentioned in our capital markets day here last year and of course we want to ensure the continuous improvements in our subsidiaries we want to still focus on efficiency within the group and the cooperation within the group and as i mentioned initially with the new organization in place i see this as going according to plan and i'm pleased with the development so far Then on the leverage side, we've talked about that. Of course, it's a focus area to decrease leverage. Okay. And then some concluding remarks before we open up for questions. So we've seen a stronger order backlog and some positive signs in the market with that. especially in the Swedish market. But also still a low activity within new build. So it's not, it's too early to tell if it's, how the year will pan out if you put it like that. Then if we look at, what we've seen business-wise, it is really ramping up and that's having a negative effect on our cash flow here in Q1. I'm also pleased to say that Clearland is performing according to plan and focus and forward go is still on profitability and our deleveraging as we talked about. I think that sums it up.

pretty well and with that we open up for questions to ask a question please dial pound key 5 on your telephone keypad to enter the queue if you wish to withdraw your question please dial pound key 6 on your telephone keypad The next question comes from Elvin Rolder from Carnegie Investment Bank AB. Please go ahead.