Hanza AB (publ)

Really, really nice to see so many people here today. A warm welcome to you all. And of course, a warm welcome to those of you following this through the audio cast. Today, we give the presentation of Hansa's year end report live from Töxfors, Värmland, Sweden. And I'm Erik Stenfors. It will be my pleasure. I'm the CEO of the company. A pleasure to give you an update of our company together with our excellent CFO Lars Åkerblom. And we have an interesting presentation for you today. We have brought Hansa to a whole new level last year and we will walk through the major events of that year.

We have an agenda.

Looks like this. First we will go through this from the operational point of view. Then Lars will walk us through the financial development. Next, we will give our vision of the future, both in general, what you think about the market development, and in particular, Hansa 2025 and beyond. And we will, of course, end this with a Q&A session. Please use that. It will be possible both to ask questions in this room and, of course, through the web. So let's get started. To make this easy to understand this presentation, I would like just to take a minute to repeat our business model. So our vision is manufacturing made easy. It can be quite complicated with outsourced manufacturing due to the fact that you need so many different contract manufacturers, and also they might be located on different places. Result might be, as you see on this slide to the left, a very complex supply chain. So we have created an alternative, local, complete manufacturing, grouping together different kinds of factories in areas like here in Värmland, where we can do parts production and parts assembly. And by the way, we are now sitting in a new assembly hall. Sometimes still, it can be complicated for the customers, the product owners to do this transformation. because it normally includes manufacturing transfer. And that's really a science of its own, something that can be complicated. So therefore we also have something we call MIG, manufacturing solutions for increased growth and earnings, a service where we help our customers to do this transformation. We have quite good knowledge of that. So this is the theory. This is the idea behind Hansa. If we now move to execution, it's a tiny graph, but it shows the sales development of the 16 years we've been around. And I trust that this will continue to grow. We have a steady growth, both in good times and bad times. Why is that? Because the need to streamline your supply chain is almost the same. When the wheels are spinning, you like to optimize, get better delivery accuracy. When it's a little bit slower economy, you like to lower the cost. And that's also why we've been able to present new orders during 2024, even though it was a recession. Now we do a development of Hansa in very close cooperation with our customers. What we do is on demand, like the hall we are in now, the new factory, on demand from our customers. The same thing apply when it comes to our acquisitions. So we are not opportunistic trying to find a good deal rather we're looking for companies where we can really increase our customer value. We have long discussions with our customer with a potential acquisition and then we try to find companies where we really can increase customer value. And this is then the reason why we are able to grow so fast but necessary for this. The key for this is that you have a very well organized company. The organization we have made is decentralized, modular and scalable, meaning that we have created these kind of manufacturing clusters. pushed out the decisions, decentralizing the decisions, because they are much better if they make decisions here in Tuxfors of a new investment. It's much better than Lars and me trying to find out what kind of machine is needed. And then modular, meaning that the clusters, they are like siblings. So you have to manage yourself, but you also have to help each other. And this means that Hansa can grow in several places at the same time. We can expand in Germany, Sweden, Finland at the same time, thanks to this organization. Another thing that is needed if you want to be a fast-growing company is some kind of fuel. And for us, the fuel is cash flow. And that's why you hear us talking about this at every presentation. I'm sure that Lars will talk a lot about our cash flow today as well. So these are some of, let's say, the features of Hansa, what separates us from the other companies in the industry. And against this background, I think it will be fairly easy to browse through all the activities we have done in 24. We started by ending funding that was already ongoing by the late 23. And I will come back to the reason for that. Then we acquired this large company, Orbit One. One of the best EMS companies in the Nordics, highly skilled, extreme competence, however, lagging a bit behind when it comes to the margin. So it was downloading the margin of the whole group. Then also, of course, came the recession. So given this fact, the large acquisition, downturn in economy, we had to work a bit with our operational strategy. We have something called Hansa 2025. That's our core strategy. But in addition to this, we have to do, let's say, an appendix to that. We call it ONYX to handle the new circumstances. And then our financial targets, and this is important, our financial targets, they are not something just hanging in the air. We guess the future. Rather, they are a consequence of our operational targets. So when we review our operational targets, we also have to look at our financial targets. And conclusion was one year ago, we made a guidance that we will actually increase the operating margin target. We had said it that we will come back to 8% by the end of 2025. Now the new target is 8% for the full year 2025, a consequence of the new operational plan. A bit proud that we were able to guide for this already a year ago and it still remains our target.