Indutrade AB (publ)

Welcome and good morning on our behalf as well. As usual, let's start with some overall highlights from the quarter. We can begin with the demand situation. Order intake continued to improve versus last year. Organically, the order intake increased with plus one. Good morning on our behalf as well. As usual, let's start with some overall highlights from the quarter. We can begin with the demand situation. Order intake continued to improve versus last year. Organically, the order intake increased with plus 1%, with slightly more than half of the companies showing a positive order intake. The strongest segments were medical technology and pharmaceuticals, energy, and parts of the process industry. Net sales were unchanged from last year, both in total and organically. Contributions from acquisitions improved compared to the last quarters and was at a good level. EBITDA margin came in at 13.3% in line with the underlying margin last year and we will comment more on this further on in the presentation. Operating cash flow was also in line with last year. Our companies continue to improve management of working capital Inventories are lower than last year, and the inventory in relation to sales is on a historically low level. In Q1, we managed to acquire two larger companies, and we also made one more acquisition in April, adding 625 million second revenue on a yearly basis, and the pipeline is continued strong. We are obviously not satisfied with the overall performance in the quarter. However, there are good progress in several areas, which I will comment more upon throughout the presentation. Looking more specifically at the order intake and sales trends, demand was stronger than last year, but still varied across companies, geographies and segments. Book-to-build is seasonally strong in Q1 for us, but improved from 105% last year to 107% now. As mentioned, companies with customers within medtech, pharma, the energy sector experienced a strong demand and also parts of the process industry. Order intake for companies with customers in infrastructure and construction and engineering was aggregated slightly down compared to last year. In terms of sales, acquisitions contributed positively with plus 5%, a sequential improvement from the plus 4% we had in Q4 2025. However, currency movements had a negative impact of 5% and organic sales was flat. leading to an unchanged top line development in total. We had a stronger order book coming into the quarter but the sales development was impacted by a weak start of the year mainly due to the challenging weather and also by the composition of the order book with a higher share of orders connected to the energy sector and the process industry with longer lead times in general. The sales development gradually improved during the quarter, starting with a weak January and ending with a strong March. Moving into sales per market. In the Nordics, sales was up in Norway, flat in Sweden and Finland, and down in Denmark. Float technology for marine applications, water treatment and the energy sector were drivers for the positive development in Norway, while the lower sales to Novo Nordisk was the main reason for the decline in Denmark. In the rest of Europe, starting with the Benelux, sales was lower within engineering and in some of the life science companies. UK, Ireland, was a good development within, for instance, railway rolling stock, and in Germany, flat overall, but slightly improved situation in the engineering sector. Switzerland and Austria was weaker, mainly due to lower sales within valve for power generation and within the construction segment. In North America, sales improved compared to last year due to good development within medical technology. In Asia, sales declined due to difficult references from last year in the marine segment. In terms of profitability, total EBITDA decreased 2%, corresponding to an EBITDA margin of 13.3% compared to 13.6% last year. However, in Q1 last year, we had some positive one-offs, so the underlying EBITDA margin was 13.3% in line with this year's EBITDA margin. The main reason for the EBITDA margin not being on a higher level is the organic sales development in combination with slightly higher expenses. Underlying expenses grew around 1%. But on top of this, we also had some non-recurring cost for downsizing. Patrick will explain more details in his presentation. But perhaps good to elaborate on the type of companies we have and why some of them haven't reduced more. If we go back to the situation late 2025, Then I would say that expectation was that in 2026 we would see better and better order and sales situations and this could be based on that we had an organic order intake improvement of plus 3% both in Q3 and Q4 last year. So most companies had a somewhat positive outlook I would say for 2026 and We have, as you know, quite a lot of trading companies and they are in general people lean. It's difficult to find qualified replacements. Hence, there was not sort of on top of their agenda to downsize. And there is some hesitation to downside if they don't really need to in order linked to sort of to the situation that it is difficult to find really good replacement employees. In addition to this, we obviously also have a lot of growing companies and they need to add people in order to manage their businesses in a professional way. So that's a bit of an explanation, I would say, to why we had a plus 1% expense increase year over year. Positive, though, that the gross margin was continued strong, amounting to 36%. Very well managed. There will be some more challenges going forward now in quarter two, raw material price increases. But I am optimistic that our companies will handle this in a good way. We have done that for very many years historically. Looking at the sales development per business area, two of them grew organically. industrial and engineering and life science, mainly as a broad result of the strengthened order book coming into the quarter. In industrial and engineering, for instance, railway rolling stock was a sort of positive situation with, they have had large orders from companies like Alstom, Porterbrook in the UK, They also had a good situation in terms of specialty chemicals. And I think it's worth to note that they had actually an all time high order intake in March in the quarter. In life science, particular companies within the medical technology had a good development. We usually comment on the single use business. I think that's still good. And we made a Spanish acquisition, our first company in Spain last year, and they are into single use. And the first quarter was all time high for them. So good start this year for them in Indutrail. Just to give some other flavors, we have a broad portfolio of medtech companies. It's everything from, we sell communication equipment to Swedish hospitals and that business has grown really well. We have a growing business in Poland. We sell medical equipment to hospitals, also consumables to hospitals. And that's also a growing situation. We have companies on Ireland which sell medical technology to large international customers and in the quarter now sold successfully to the US. So it's not sort of single companies, it's a broad base of companies doing well in medical technology. Infrastructure and construction and technology and systems solutions continues to be weaker due to demand being subdued on the back of the general market uncertainty and lower investment levels in some customer segments. Process, energy and water had a good order book coming into the quarter, but there are generally longer lead times within the energy sector and the process industry so the minus three percent is more of a timing effect they now have a record high order book and a good conditions for stronger development going forward and march was actually the second best month ever in terms of order intake for for process energy and water in general i would say that the challenging weather in the beginning of the year also impacted the sales development negatively mainly in infrastructure and construction and process, energy and water. If we then turn to profitability for the business areas, it was three business areas improving the EBITDA margin in the quarter. Industrial and engineering had the strongest margin development supported by the gross margin improvements, leverage on the organic sales and margin accretive acquisitions. Infrastructure and construction has for a longer time worked with restructuring measures and keep costs in a really good way and some divestments to improve its margin. In life science, the gross margin further strengthened due to good sales development within the MedTech cluster, as I mentioned, as well as margin accretive acquisitions contributing positively. Processed energy and water was impacted by the lower sales, as I talked about earlier. And the EBITDA margin development in technology and system solutions was mainly driven by lower organic sales together with slightly higher expense levels. Acquisitions, positive situation. So far this year, we have acquired three companies. of which two slightly larger companies for us, with a total annual turnover of 625 million SEK. We are very glad to have welcomed Bellman, Katarikambi and Axoton to the group. They have all good track record of sustainable profitable growth and are also margin accretive to the group. In 2025, the average company size was slightly lower than a normal acquisition year for Indutrade. And this year so far, it's slightly higher. This shouldn't be seen as a strategic shift. We are opportunity oriented, as you know, and we act on opportunities we believe to be accretive and successful. Consequently, there will be times when we have periods of larger acquisitions and periods with smaller acquisitions being made. The acquired EBITDA was in a high level in quarter one. as can be seen on the graph to the right, just over 70 million SEK. Also looking at the EBITDA margin of the acquired companies, it was on a strong level of 19.5% for the quarter and above 17% for rolling 12 months. Good to note that this includes transaction costs, so the underlying margin is even higher. Our business areas are successful in the acquisition work. being proactive and building pipeline. Our business segment leaders are spending more time on acquisitions now compared to a year ago. And the current acquisition pipeline is on a high level. By that, I leave the word over to Patrick to comment more on the financials.

Yes, thank you Bo. Total growth for orders and sales was plus 2% and 0% respectively in the quarter. Book-to-bill was positive as Bo talked about. Orders 7% higher than sales and on or above 1% in all business areas actually. Strongest performance in process energy and water. As Previously mentioned, our gross margin was strong at 36% compared to 35.4% last year. Total EBITDA declined 2%. Acquisitions had a strong positive impact of 7%. But this was offset by currency movements and slightly higher expense levels in combination with the positive one-offs we had last year. And these ones, they were primarily connected to earnouts. and amounted to net plus 27 million, which corresponds to around 2.5% on the EBITDA. If we comment a little bit more on the expense situation, then total increase in expenses, fixed currency excluding acquisitions, was around 45 million. corresponding to 2% on the total expense base. But underlying, as Bo already mentioned, it's only half of this, around 1%. We have had some one-offs connected to layoffs, personnel reductions in several companies. And also last year, the cost level was somewhat pushed down, actually, because of some LTI issues. provision releases we had. So underlying it is plus 1%. EBITDA margin came in for the quarter at 13.3, which is then the same as the underlying EBITDA last year. We are, of course, not satisfied with the margin, but it's important to note that Q1 is historically a seasonally low margin quarter for us. Going down further, the P&L finance net decreased with 18%, mainly due to lower interest rates. Tax costs actually increased 5%, but it's mainly due to some one-time effects underlying the tax rate, I would say, is the same as before. Earnings per share was down 4%. Return on capital employed declined slightly to 18%. Capital employed end of the quarter increased with eight percent because of the higher acquisition pace since second half of last year and slightly higher working capital also mostly connected to increased receivables at the end of the quarter cash flow from operating activities seasonally low also then in quarter one but was in line with q1 last year all in all group financial position is Still very solid with the net debt EBTA ratio of 1.5 at the end of quarter. So let's elaborate a little bit more on the cash flow. As mentioned, cash flow is seasonally low in Q1, which you clearly can see from the graph. But it was stable. And after CapEx, it was actually slightly higher than last year. Companies continue to show progress in the management of working capital. I think inventories are lower than last year and inventories in relation to sales on a rolling 12 months basis is actually now on a historically low level. Overall working capital efficiency is also then slightly better than last year. Cash conversion continue to be on a stable high level and even even slightly improved versus last year. Continuing to the EPS earnings per share situation that has developed in a bit weak way the last couple of years as you know. The driver has been a weak organic development, which is mainly due to the general weaker macro situation that we have experienced and the lower general demand from that. But also worth to note that the higher interest rates compared to a few years back and currency headwinds lately has also then have actually a significant impact on this situation. In the quarter specifically, EPS was down 4% because of the lower operational result and lower interest cost compensated slightly. And we are obviously not satisfied with this, with EPS development, but we are now fully focused on coming back to good growth levels in line with our targets. And with that, we will also for sure deliver EPS growth. And then lastly, the financial position, the interest bearing net debt increased versus last year and also slightly sequentially because of the increased acquisition pace. However, the net debt ratios are stable and low from a longer historical perspective. Net debt equity ratio at 45% versus 47% last year. Net debt EBITDA was slightly higher than last year at 1.5, but still on a comfortable level. And if you exclude earnouts, it was on 1.3 versus 1.2 last year. The financial net debt, which is then the part of the debt that relates to borrowing that needs to be refinanced, is also historically low on a level of 1. So all in all, in conclusion, our financial position is very strong and that creates a good foundation for continued value accretive acquisitions and also room for organic growth investments and initiatives. I think I end there and leave back to you, Bo.

Thank you. So let's summarize some of the key takeaways before we open up for questions. The demand situation improved and the order backlog was further strengthened. Good acquisition contribution, but total sales were negatively affected by currency movements and the flat organic development due to a weak start of the year and longer lead times in part of the order back in part of the order book. EBITDA margin was in line with the underlying margin last year. The gross margin was on a continued high level, so we expect a good leverage on the organic sales growth when the market improves. Looking ahead, as said, we have the larger order backlog and we saw clear improvements throughout the quarter, which is positive. But the general market uncertainty remains on a high level linked to the geopolitical situation. We have a good momentum in terms of acquisitions and a strong pipeline, providing good conditions for a gradually increased acquisition pace. Finally, we are not satisfied with a quarter, but there are positive signs in many areas and we are fully focused and determined to deliver in line with our financial targets. By that, we end our formal presentation and open up for potential questions. Thank you.