Garo Aktiebolag (publ)

Welcome everyone to the presentation of Goro's Q1 2024. My name is Patrik Andersson and I'm the CEO of Goro. With me today I have Helena Claesson, our CFO, to present our financial performance. Next slide, please. Let's start with an introduction. Garo is a company founded in 1939 that develops, manufactures and sells innovative products and systems for electrical installation and their own brand in the European market. Developing products that are at the forefront has always been a significant aspect of our success. Our focus is developing user-friendly and safe products with a modern design and a long service life. There is market demand for products and solutions to assist in establishing a fossil-free society in which a growing number of players are becoming cautious of their sustainable impact. This makes the sustainable aspect a crucial factor in the choice of product and service. Next slide, please. We have two business areas, Garo Immobility, which consists of the Garo Immobility product area, and Garo Electrification, which includes the electrical distribution products, project business, and temporary power. We have operations in Sweden, Norway, Ireland, Finland, Poland, UK, Germany, and we also know establish a company in Spain which I will come back to later in the presentation. And we also sell in other European countries where we don't have own subsidies. We have production facilities in Gnosjö and Hillestorp in Sweden and in Szczecin in Poland, where we moved into new production and logistics facilities summer 2023 to meet the European demand for e-mobility products for the coming years. and we are approximately 440 employees in the group. Next slide, please. In the immobility product area, we develop and market all types of charges for rechargeable vehicles. We have a product and turnkey solutions for destination charging for various locations, including at home, in public, at workplace, and along the highway. To make the mobility business even more complete, we're also offering service agreements to assist our customers with the annual service and updates. We believe it's important to make it easy for the user and to make it possible to charge in locations where people live and work. This area accounted for 29% of the sales in the quarter. Next slide, please. The largest product area in the Garo electrification business area is electrical distribution products, which consists of approximately 3,500 products and turnkey solutions for the electrical installation market. Examples of products are components, safety switches, meaty cabinets, outlet boxes, plugs and sockets, which are products used daily in different applications, such as in new buildings, renovations, marina, camping sites, industry, and immobility solutions. This product area contributed 45% of the group sales in the quarter. Our project business product area provides complete and customized solutions for all types of power supplies for apartments, single-family homes, industry and mobility solutions accounted for 23 of the total sales. The temporary power product area, which has a product portfolio consisting of temporary electricity, lightning, heating and charging products used on construction sites and events accounted for 3% of the sales. These four product areas make Garo's offering unique and easy for the customer. An example of this is when the customer requires a charging solution with different charges and load balancing from immobility, and also requires power supply from project business, as well as safety and installation products from electrical distribution products. These make it easy, simple, and safe for the customer and end user. Now over to Helena for some financial updates. Next slide, please.

Thank you, Patrick. I would like to start by looking at the financial summary for the first quarter. Net sales amounted to 293 million, a decrease of 21%, or 80 million, compared to the same quarter last year. Sales within Garlow Electrification decreased by 16% as a result of the weaker economy in the markets in general. Immobility showed a decrease in sales of 31%. Out of the low sales in the quarter, 65 million are related to the lower sales in the Sweden affecting both business areas. Operating profit for the quarter came in at negative 7 million compared to 28 million for the same quarter last year, which is mainly explained by the low sales volumes. During the quarter, we have performed a savings and efficiency program to adapt the organization for the lowest volumes, but at the same time also be prepared for the recovery in the market. We will start to notice full effect of the program during the second quarter. Also, we have noticed that the sales have somewhat recovered in April as a result of more working days and a slightly better demand in those business areas. Now over to you again, Patrik, for some operational highlights. Next slide, please.

Thank you. Let's start with goal immobility. The prevailing market situation with macroeconomic uncertainty continued to affect purchasing patterns and investment decisions, primarily in the Swedish market. This had a negative impact on the Garo sales. Moreover, some of our major contract customers still have volumes of Garo's product inventory due to the current market climate. Our activity market outside Sweden appeared more positive and showed a growth in the quarter. The beginning of 2024 was hectic for the recent established sales company in Germany. The company made its first delivery of iShred compliant products, which were well received by the customer. Goro will continue to expand the product portfolio for the German market with more ice west compliant products during the year. Goro Immobility therefore intensified its marketing activities in Germany, Poland and Ireland. In addition, we are now established a sales company in Spain. Spain is the fourth largest country in Europe in terms of number of passenger cars with about 27 million cars, and a rapidly growing market for rechargeable cars in the coming years. The first deliveries are expected to commence in the second half of 2024. Garo Entity Compact, the market's only wall-box charging at home that is third-party certified according to the current charging standards in Europe. is facing a market that is under price pressure from other players. However, Goro's uncompromising focus on safety and product development remains firm. Demand for public charging points is the main driver of sales in the business area. We go further on with Goro Electrification. A continued weak economy climate with high interest rates leads to a significant decline in the market for construction of new senior family homes and apartments in Sweden and the Nordic region. Therefore, the demand for product related to house manufacturers was down sharply, and the forecast shows that it will continue to impact the production rate of housing for a period ahead. However, in Ireland, the market for new constructions remains stable, and we see a growing demand for construction-related products. In the market where Goro is active, there is a considerable underlying need for new housing and apartments, and the long-term assessment in the market will gain new monuments in the coming years when the financial situation has stabilized. Demand is relatively healthy for new construction, renovation and energy efficiency in public sector, commercial properties and industry. However, these volumes will not fully compensate for lower volumes in new construction in the short term. During the quarter, Ireland delivered products to a major international computer company with data centers across Europe. The delivery includes components for distribution cabinets that will be placed in the company's server facilities. Growth and probability. During the quarter, an action program was carried out to continue adapting the organization to the prevailing situation. The program reduced number of 40 employees in the group. The action program primarily concerned the Garo immobility business area. The program is expected to achieve full effect in the second quarter. Cost control and efficient organization will remain a major focus area for the entire Garo group. The action program completed in Garo Electrification in autumn 2023 is now yield a desired effect with an organization adapted to the prevailing market situation. And now over to Helena. Next slide, please.