Garo Aktiebolag (publ)

Welcome, everyone, to the presentation of Goro's Q2 report 2024. My name is Patrik Andersson and I'm the CEO of Goro. And with me today, I have Helena Claesson, our CFO, to present the financial performance. Next slide, please. We will, as usual, start with an introduction of the company. After that, the Q2 report and outlook. And in the end of the presentation, comments on the press release we launched this morning. So let's start with an introduction. GORU is a company founded in 1939 that develops and manufactures and sells innovative products and systems for electrical installation under own brand in the European markets. Developing products that are in the forefront has always been a significant aspect of our success. Our focus in developing user-friendly and safe product with a modern design and long service life. There is market demand for product and solutions to assist in establishing a fossil-free society in which a growing number of players are becoming conscious to the 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, GORO Immobility, which consists of the immobility product area, and GORO Electrification, which includes the electrical distribution products, project business and temporary power. We have operations in Sweden, Norway, Ireland, Finland, Poland, the UK and Germany, and the establishment of our sales company in Spain which we announced in the previous interim report, is in progress as planned. We also sell in other European countries where we don't have own subsidies. We have production facilities in Gnosjö and in Hillestop in Sweden, and in Szczecin in Poland, where we moved into new production and logistics facilities in summer 2023 to meet the European demand for immobility products in the coming years. and we are approximately 420 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 product and turnkey solutions for destination charging for various locations, including at home, in public, at workplaces and along the highway. To make the mobility business even more complete, we also offer service agreements to assist our customers with annual service updates, etc. 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 total sales in the quarter. Next slide, please. The largest product area in the Goro electrification business area is electrical distribution products, which consist of approximately 3,500 products and turnkey solutions for the electrical installation markets. Examples of products are components, safety switches, meter cabinets, outlet boxes, plugs and sockets, which are products used daily in different applications, such as as new building, renovation, marina, camping sites, immobility solutions, etc. This product area contributed for 45% of the group sales in the quarter. Our project business products are provided complete customized solutions for all types of power supplies. For apartments, single family homes, industry, immobility solutions accounted for 23% of total sales. The temporary power area, which is 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 areas make Goros offering unique and easy for the customer. An example of this is when the customer requires a charging solution for different charges and load balancing from immobility, and also requires power supply from the project business, as well as safety and installation products from the 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, Patrik. And I would like to start by looking at the financial summary for the second quarter. Net sales amounted to 306 million, a decrease of 21% compared to the same quarter last year. Sales within Goro electrification decreased by 5%, and the sales within Goro immobility showed a decrease in sales of 45%. The market for business Both business areas have remained cautious in the first half year of 2024. The lower sales volumes in the quarter are mainly due to a cool market in immobility, where sales have been low in Sweden, but also to our international contracts. Operating profit for the quarter came in at negative 4 million, compared with 18 million positive for the same quarter last year. And this is explained by the low sales volumes. Now back to you, Patrik, for some operational highlights. Next slide, please.

Thank you. And we go further on with operational highlights. And let's start with GORU immobility. The prevailing market situation with macroeconomic turbulence continues to affect the purchasing patterns and investment decisions. And the recovery of immobility market is proceeding slower than expected. particularly in Sweden. Moreover, some of our major contract customers still have product in inventory due to the current market climate. To summarize the market situation, we believe that the market will slowly improve and the outcome of 2025 is more positive. However, in the second quarter, the group sales outside the Nordic region again posted growth, which support our continued investment in Europe on our recent establishment in Germany and Spain. As a part in this investment in Germany, Garo has decided to obtain Eichret certification for our Wallbox Garo entity and the factory in Poland. Our long-term vision for the market remains unchanged. We believe the transition to electrical vehicles and the need for destination charging and increasing activities noted during the quarter regarding inquiries from the expansion of charging station for projects, for example, commercial property, tenant-owned association and public places. We go further on regarding electrification. A continuing weak economy climate, impacted by macroeconomic factors, has led to a low production rate in the market for construction of single-family homes and apartments in Sweden and in the rest of the Nordic region. This need is driven by new construction, renovation, energy and chasements, which turn and create a need for both standard and customized products in Garo Electrification. The weaker construction market in Sweden is expected to continue for the entire year of 2024, but is expected to recover gradually during 2025. The interest rates cuts, both from this plan and this already initiated, are expected to have a positive impact on house construction and investment willingness, and will result in a gradual increasing demand for Goro Electrification products. Demand in relatively healthy for public sector, commercial and industry purposes. That market is connected to the electrification of society and green transition is assessed to be stable. In Ireland, which is an important market for Goro, both the market of Goro performed, sorry, Sorry, something happened with the digital here. ...performed well in Q2. This trend was partly attributed to a broader product range that is able only to address a price-sensitive market, but also to create a possibility for improvement margin. The temporary power product area with power supply products for construction process Note that a growth of 12% compared to year earlier quarter. We go further on to growth and profitability. The action program at Goro Electrification completed in autumn 2023 had a desired effect and the business area was able to present an improved EBIT margin of 9.2% in the quarter. This will still be a focus area for the business area. In addition to already implementing an efficient program in mobility during Q1, and as a result of the current market situation, we will continue to adapt cost and other part of the organization to demand in various geographical markets. Within the business area, we're also placing key focus and reducing our inventory level. The three product areas include GORO electrification, together with GORO immobility, create synergy effects and provide a stable foundation for GORO operation, which is particularly important during times of sluggish demand in some product areas. Small and large complex projects or require product and service from several of our products area. And now over to Helena. Next slide, please.