Idun Industrier AB (publ)

Hello and welcome to IDEN Industriers conference call here for the first quarter of 2026. My name is Carl Korsheden and I work as an equity research analyst here at DNB Carnegie with a focus on these more acquisition intensive companies such as IDEN. I would just like to remind you that there is a chat function, so if you have any questions, please feel free to send them into the chat and then I will read them out here to the management team in the room. But with that said, I will leave over to you on the first quarter.

Thank you and welcome to the presentation of the first quarter of 2026 results of Idel Industrier. And I will start for those of you who are new to Eden with a very brief repetition of who we are. So Eden is an industrial group of companies with net sales of about 2.4 billion with EBITA around 330 million. We consist of 20 group companies that we divide into manufacturing which is about 60% of sales and profit, and service and maintenance, which is about 40% of sales and profit. IDON is primarily a Swedish and Nordic organization. All of our 20 group companies have their base in Sweden, and three quarters of sales is generated in Sweden. More than 90% of sales is generated in the Nordic countries, and we have subsidiaries in all the Nordic and all the Baltic countries. A few words about Eden as an investor. We look for market leading companies. Market leading companies within manufacturing, industrial trading and industrial services companies. and if there is one thing to remember about our business model is that we really work actively with a pilot school. It is starting from that we prefer to invest in some 80-85% of new companies so we have lots of former owners on the board of directors and still operating in our companies and we have co-ownership in all of our group companies in the management. In total more than 100 shareholders in the group. And in the management team, all of us are quite substantial owners in terms of how much money we have to invest in the company. So for you as an external shareholder, there's a quite unique alignment of interest between you and all the way down to each individual group company in Eden. With that said, over to the first quarter results. So it was a strong quarter for Eden, sales growing almost 16% and EBITDA even a bit more with plus 17% in the period. We had really good earnings per share, 30% up. and also organically sales and profit is growing in the quarter. We had a solid cash flow and we made one acquisition of a new group company in the quarter in January, Muldex Sweden, which provides services and spare parts to sawmills, particularly planes and mainly in Sweden. and our group company Stega Företagen made two add-on acquisitions. Since the first investment in 2014, we have continuously made two to four investments per year up until now, and EBITDA growth from 2020 up to 2025 has actually been 30% per year. This is not a pace we can guarantee to continue with. It will be faster in some periods and slower in others, but historically profit growth has been quite strong. We are not the fastest growing compounder, so we are quite happy if we make those two to four acquisitions per year and growing sales and profit step by step. Here we see sales per quarter six years back, and to the right you see the split between organic and acquired growth. It could be noted here that it's quite a stable growth year on year, and we see some slight seasonality with typically the second and the fourth quarter being slightly stronger than the rest, but it's not so big differences. And then the same picture with EBITA rolling 12 months and profit per quarter. Step by step growing and it could be mentioned here on the split organic acquired we also added that the parent company cost... Actually, they went down by one million, so contributed positively in the quarter. And it's not that we are cutting costs in the mother company. It was the case that in Q1, we had some additional legal costs related to the central refinancing that we made end of March, and that was around one million SEK. But on the other hand, we are saving 20 million SEK annually on lower interest costs. And this slide, it shows rolling 12 months, sales, gross profit, and EBITDA-EBITDA margin, and The message here is stability. So it is not like the margins are jumping up and down. So you can see that in 2021, 22, part of 23, the growth was slightly faster. We all know that the last years have been more tough in terms of the economic environment, but we keep growing slightly slower, but the margins are really stable. With that, over to you, Oskar.

Thanks, Henrik. Startinging off with our business area manufacturing. We can see that both sales and EBITDA are increasing. Sales up by 15.8% from 366 million to 424 million. And for EBITA, we went from 52 million to 64 million with improved margins. As mentioned in the CEO letter, Fredalder Dens that deliver Koffin and Ernst had a strong performance in the quarter, also our group company Turab. Turbines for hydropower plants achieved improved results. This is also the first quarter where we had Tricobi, our acquisition from the fourth quarter 2025, contributing in the full quarter. And can be mentioned for Tricobi that they have a lower gross margin, but the EBITDA margin is better than the group in average, so that helps us going forward. And the other companies within manufacturing they face, some group companies face markets where the customers tend to remain cautious and continue to work on the market there. Our other business area Service and maintenance Also here we see that net sales goes from 203 million to 235 improving 15.6% and the EBITDA margin it goes down a bit from Q1 2025 it's in the same level or almost in the same level as the year before 2024 14.2 compared to 14.4 but then last quarter was up on 16.4 And last year was a strong quarter. Stega företagen that has a lot of car washing had good volumes throughout 2025, but also in the quarter and with good gross margin and EBITDA margin. So hard comparison period. In the quarter, here in 2026, Ståtöga Embateknik, maintenance for heavy industry here in Sweden, so they started the year very strong and hopefully that can be seen as a sign of a better economic environment going ahead. We have also mentioned in previous reports, we have had some struggling with profits in Triton, still black figures, and we can see that they continue to improve profitability and we are glad to see. On the other hand, ILEMA, Air Emission Measurements and POL Nordic, a competence tool system for industrial companies and also service program for practical upper secondary schools in Sweden have met lower market demand mainly from the end users within pulp and paper industry. But all the companies still achieve good profitability and are also well placed to meet further demand going ahead. Looking at our cash conversion and net debt, net debt increased by 66 million in the quarter and mainly due to the acquisition made in the quarter mainly with Moldex Sweden AB mentioned by Henrik and also that Stega företagen did to add on acquisitions. Jomi System & Ecosign. Since we have done quite a few investments during the last 12 months we have another 40 million in EBITDA that is not in the books yet so looking at the leverage at the moment reported is 2.5 but given that extra EBITDA into account we will end up at around 2.2 or 2.3. We also lowered our interest cost by another 7 million in the quarter. So from a rolling 12 months period we have went from 75 million to 55 million on an annual basis. We also have the opportunity to redeem our last outstanding bond here at the 30th of June this year and if nothing changes we have the opportunity to save another 8 million SEK on an annual basis. Looking at the cash conversion, rolling 12 months we are at the level of 58%. We see going ahead that we should be able to go above 60% so over the next 12 months we see that we should be able to increase this level from this point. Just a reminder of our financial targets. We have a beta growth of 15% where we see that 10% should come from acquisitions and 5% from organic growth. As mentioned in the first slide, looking at the 2020 to 2025, we have achieved 30%. and we hope that we can continue to deliver on high levels but at least these 15% over a period of time. Net debt under 3.5 times and at the moment we are reported at 2.5 but then taking into account the new companies we would go to 2.2 or 2.3. And dividend policy this year we have a dividend of 1.15 SEK per share.

So the last slide, and let's repeat some key takeaways from the first quarter. Sales growth 15.7%, EBITDA growth 16.8%, earnings per share growth 30%. We invested in one new group company and two smaller add-on acquisitions. few words about the future and when we all Read the newspapers and listen to the news and there are obviously significant uncertainties in the macroeconomic environment especially regarding what will happen in the Middle East and But assuming that that will stabilize or calm down in the coming months, we have positive indications from the group companies and we believe that the development could be quite good. And we also think that the operating margins should be able to increase slightly in 2026. We have a strong group of companies. They all have strong market positions, high market shares, and we are convinced that they will be able to manage even in a more negative scenario. And finally, Eden still has a strong financial position and we see good opportunities for more investments. Yes.

Thank you very much for that so again if you have any questions feel free to type them in the chat but we've received a couple of them so far already so let's go through those. One question is on seasonality aspects in recently acquired entities are there any quarters that are particularly strong particularly weak or so on?

No, not really. Tricobi, the biggest one, is not really a very seasonal company. Moldex, not many. No, the short answer is no. There should not be any additional seasonality effects.

Got it, thanks. You also mentioned in the report that competence development across the group companies including within AI. Could you elaborate on how you approach AI implementation?

Well, I should say that we The typical group company within Idun is not that big. It has maybe 40 to 50 employees and it's a factory somewhere. And we manage each company individually through the board of directors as well. You know, that's our business model, meaning that we don't have one way of implementing it. It's company by company, but it could be in the way we, I guess, most of us use AI in preparing, doing market research, preparing documents, taking notes in meetings and so on. But we are sending people on training, we are having the discussions to make sure that AI is being more actively used, but it's not one way of doing it for even.

And we are also looking with external cooperation to implement AI within production to see efficiency within the production as well. And I think a lot of us both at 8th Quarter and Indie Group companies use it for office work and co-pilot, ChatGPT, Claude and so on to get better efficiency in everything we do.

Yeah, that's clear. I also have a question here on your comments in the report regarding M&A. You mentioned that you are in several promising dialogues regarding new investment opportunities and if you could share any more detail on that and potentially if that primarily refers to new platform acquisitions or if it's add-ons and if it's in any particular, I guess, end market or category you are particularly active in at the moment.

No, it is both. It is both new platforms and add-on acquisitions. Well, no, it's... I don't think I can be more specific than that. And as you know, we are at IDON looking quite broadly. It is manufacturing, for example, which is the biggest part of what we do, that's broad. And I don't think it would be right to start specifying what kind of manufacturing, for example.

As Henrik mentioned, we have two business areas, but we do three things. Manufacturing with our own products mainly, and then industrial services for industrial companies, and also industrial trade. Going ahead, we will see that we will continue to do acquisitions within these three areas. Yeah, that's clear.

And just on the organic growth in the quarter, quite strong. If we look at each of the business areas, could you give any indication how roughly that has developed per business area, if we look at organic growth?

We can see a small trend shift. I would say that in, I think, 2022, business area manufacturing had a better EBITDA margin than service and maintenance, but then the last Three years service and maintenance have had a better EBITDA margin. But now for the first quarter we see that manufacturing has a slightly better EBITDA margin. But I will also say that it's a mix from the acquisitions made. And also, the last couple of acquisitions, I would say that they have a higher EBITDA margin than the rest of the group in average, so that can also add something.

We have said internally that the business areas, they take turns in leading, but also, as Oskar said, also individual companies. And we really see, especially during the last years where the economy has been a bit more challenging, that we benefit from the diversification that we do have, that the group companies are active in very different end customer markets. And that's good for us. So it's not like it's only construction or only a certain industry, but many.

I see. And on the roughly 5% organic top line growth, is that Which is primarily driven by service and maintenance this quarter or is it more manufacturing or is the split fairly even contributing to that overall 5% growth figure?

The sales come from both business area but then the EBITDA would come more from manufacturing than service and maintenance.

Yeah, that's clear. And did you observe any, I guess, signs of hesitancy among your customers, if we speak more broadly based in given, I guess, the macro backdrop? And you mentioned the, I mean, conflict in Middle East in the report, for instance, and so on. Has that, have you seen any signs of slowdown among your customers? And also, if you have seen any shifts in, I guess, organic momentum throughout the quarter, i.e., did it become better or worse at the latter part of the quarter compared to the initial cases?

One specific industry where we have some exposure and we've seen some hesitance or tougher circumstances is the pulp and paper industry, where a couple of our group companies are delivering products and services to them. Here we have observed with declining sales and they have laid off people. For example, P&L Nordic, we provide education and training systems and trainings for pulp and paper workers, and they have stopped these kind of trainings for the moment as a part of cost-cutting measures. So that could be one thing. But to the second part of your question, We did see, for example, in Storthöga EMMA Teknik, that provides heavy maintenance to industrial companies, pulp and paper mills, but also steel mills, that the march was strong. But then we shouldn't make, it's too soon to say that, to make the conclusion that it's turning around, but still, it was stronger in the end of the quarter than in the beginning for this company.

That's encouraging. I have another question here on even though you only own 49% of Stega företagen, could you say something about the potential in that business both organically and through M&A?

We have Magnus the CEO and the main owner and Daniel who is the CFO for the company. Very good entrepreneurs and continue to build Stega and they see a lot of investment opportunities going ahead. So a strong pipeline also for Stega företagen.

And organically, I would say that Stega Företagen is a group of company in its own right and active in different areas. So the potential for organic growth differs from part to part in that group, in addition to the M&A opportunities that Oskar mentions. But there are opportunities in Stega, absolutely.

Yeah, that's clear.

And maybe on Stega particularly when you talked a little bit about it now in the quarter that may have hampered margins a little bit. I guess there were quite tough comps year over year given the weather and so on. Is that... Yeah, is that something that also affected you throughout the remaining quarters of 25? So are we still meeting sort of toughish comps there over the next few quarters or is the situation more normalized?

Still tough comps, but I would say that one of the toughest ones were here in Q1. But Stiga Företagen delivered solid results during the whole 2025. So strong comparison periods, that's correct.

Yeah and do you believe you can still achieve a similar high level or is it more of a, yeah that was maybe a little bit extraordinary strong and now maybe a little bit back to normalization or how do you think about that?

We will see how many will wash their cars and how frequent during the year and time will tell.

Yeah fair enough, fair enough. Yeah, you also have been talking a little bit I guess a couple of quarters ago about some cost savings initiatives mainly I guess in the service and maintenance division. Is that something still currently ongoing and can we expect anything more from that and on the ones you have already I guess taken are you seeing any effect from those or yeah is there more to do there do you think?

This has to be answered almost on a company by company basis. But yes, we have taken out some costs and we will see that in 2026. We are already seeing it actually. So a number of employees have left in those group companies where it has been necessary. So not for all of them. Going forward, I would say there are a few group companies. I should maybe not mention which ones, where some more people will leave. But I hopefully think we have most of this actually behind us. But again, back to the uncertainties, it depends. I mean, if the Middle East crisis will grow worse and continue, this might of course change. But provided that it will calm down, we have most of the cost savings actually behind us.

Yeah, that's clear. Yeah, I mean, you have obviously done quite a lot of acquisitions recently, some of them, or at least Trigobi, a little bit larger one. Can you say anything in terms of the multiples you've been paying for these more recent deals and how if that stands out anyhow relative your history?

No, it's still within the history, as we say, between five to eight times EBITDA and all the three most recent investments or acquisitions have been within this range. And exactly where you are in that range depends on the size of the exact business and whether real estate facilities are included or not. But no, we are still paying the same multiples.

That's encouraging. You mentioned you did two smaller bolt-ons within Stega this quarter. Is it possible to give any magnitude or numbers there on sales or margins? How much can we expect from that?

around 30 million in sales each and 3 million of EBITDA each but then we only take into account 50% of that so I would say for EdenShare we add another sales of another 30 million and EBITDA of 3 million.

Thanks and maybe one last from my side also if we look at these acquisitions conducted now coming into the group have they been performing according to plan or exceeded or yeah came in worse than expected or how have those developed?

I would say it's a short period of time for those three in November, December and January, but all three companies have come on board in a good way. They are performing according to plan and we are really happy so far, but it's also too early to tell. In a year's time we will know more, but so far so good.

Yeah, encouraging. I think that was all the questions we had. So, yeah, maybe you want to wrap up the quarter and then we can say goodbye for today.

No, a really good and strong quarter for Eden. We are happy. Thank you for listening and have a nice Valborg.