Indutrade AB (publ)

Welcome to the Indutrade Q2 presentation for 2026. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to CEO Bo Anvik and CFO Patrik Johnson. Please go ahead.

Welcome and good morning on our behalf as well. We are glad to present a strong quarter and let's start with the overall highlights. We had a good development in many areas in the quarter, starting with the top-line development. Demand continued to improve and total order growth was 14%, of which 8% organically, with the majority of our companies growing. Continued positive book-to-bill of 105%. And the strongest demand was with companies having customers within the medtech and pharma area and also the energy sector. Net sales increased 11% in total to record high 9 billion SEK with strong organic growth of 5%. EBITDA was also on a record high level and EBITDA margin improved to 14.7% with good operational leverage on the organic sales and margin accretive acquisitions. Cash flow from operating activities increased and inventory levels were flat from last year organically. We continued being successful in terms of acquisitions. Nine companies acquired in 2026 so far and slightly larger companies on average. Our pipeline remains strong. As mentioned, top line development was strong and demand improved. However, still varies across companies, geographies and segments. Companies with customers within medtech and pharma and the energy sector experienced the strongest demand, but all major customer segments improved compared to last year. Despite the strong net sales, order intake was even higher, resulting in a positive book to build in the quarter. The order backlog is now 8% higher than the same period last year. In terms of sales, acquisitions contributed positively with 6%, a sequential improvement from the 5% we had in Q1 26, and currency movements had no impact in the quarter. The organic development was good, plus 5% benefiting from the increased order backlog development the last few quarters. All in all, a very good top line situation, strong sales, but even stronger order intake. If we move into sales per market, sales improved in the Nordic countries with a broad positive development in many companies and segments, except in Denmark, which were down due to lower deliveries to Novo Nordisk. In the rest of Europe, the situation was mixed with slightly negative development in the Benelux region, mainly due to lower construction activity and some tough comparisons in a few companies. Sales was flat in the UK, Ireland and Switzerland and Austria and up in Germany. Development in Germany was mainly driven by the engineering sector and companies within MedTech and Pharma. Sales in North America and Asia is more volatile. This quarter it was flat in North America and up in Asia. Development in Asia was mainly driven by valves for power generation. Total EBITDA increased 19%, corresponding to an EBITDA margin of 14.7% compared to 13.7% last year. One of our companies in the final earn-out stage has performed better than expected. Their earn-out became larger than the provision we had, so the additional amount we had to pay to them impacted our profit negatively. Excluding this revaluation, the EBIT margin was 14.9%. EBITDA margin was positively affected by the organic sales development, continued strong gross margin and margin accretive acquisitions. Regarding the gross margin, there have been price increases in many areas during the quarter, especially connected to freight, certain raw materials, semiconductors and some electronic components. But our companies have done a really good job in passing price increases to the customers and protecting their gross margins. Looking at the sales development per business area, four out of five business areas had organic growth in the quarter. LifeScience stands out with really strong development and it's mainly connected to broad positive development for many companies within medical technology distribution. We have, for example, deliberately invested in the Polish LifeScience market since some time back and see some really good progress there recently. Processed energy and water and industrial and engineering had good development for many companies and segments. Processed energy and water benefiting from the large order book built up the last quarter. And within that sector, it was predominantly the energy segment broadly increasing. And for example, investments in gas powered power plants. but also cooling applications for data centers, and we see some emerging defense orders coming into this business area as well. In terms of industrial and engineering, it was rather broad in terms of sales improvement. To mention some areas, we had good progress in terms of hard metal tools, specialty chemicals, and the automotive aftermarket. Infrastructure and construction was down 3%, still impacted by the weaker general demand and thus lower order book values coming into the quarter. But I would say that the outlook for the second half of the year is cautiously optimistic. And technology and system solutions had a positive development with 2% organic growth, however, from somewhat lower levels, but nonetheless good progress. And also, I would say that many companies are delivering in a good way and stepwise increasing. And I would say that also there we have a cautiously optimistic perspective on the second half of the year. Four out of five business areas improved the EBITDA margin in the quarter. Industrial and engineering and life science were positively impacted by the organic sales growth, gross margin improvements and also margin accretive acquisitions. Infrastructure and construction has for a longer time worked with cost reduction measures and some divestments to improve its margins. And margin accretive acquisitions contributed positively in process, energy and water. And technology and system solutions had a lower EBITDA margin compared to last year, impacted by weak performance in a few project oriented companies, mainly in the UK, as we have talked about earlier. Acquisition pace was good in the second quarter, and we have so far this year welcomed nine companies to Indutrade with a total annual turnover of 1.5 billion SEK, continuing the successful trend we have had since the second half of 2025. Looking at the rolling 12 months, we have formally closed 16 companies with a total annual turnover of 2.2 billion SEK. During the quarter, we announced the acquisitions of AXOTAN in Sweden, FACOTECH in Germany, VALVCO in the Netherlands, CREATECH in Germany and OTEC in Norway. And after the end of the period, we announced two add-ons, DORTE EGELUND in Denmark and ALBIOX in Finland. All business areas except infrastructure and construction have done acquisitions. Infrastructure and construction continues to prioritize organic operational improvements. This year, so far, the average company size has been on a slightly higher level. This should not, however, be seen as a strategic shift. We are opportunity-oriented and act on the opportunities we believe to be accretive and successful. Consequently, there will be times when we have periods of larger acquisitions and also periods with smaller acquisitions being made. The acquired EBITDA was in a high level in Q2, as can be seen on the graph to the right, at 85 million SEK. Also looking at the EBITDA margin of the acquired companies, it was on a margin accretive level of 17.6% for the quarter and 17.5% rolling 12. Good to note that this includes transaction costs, so the underlying margin is even higher. Our business areas are proactive in the acquisition work 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.

Thank you Bo and Bo has already talked about many of the KPIs but good to highlight is also the year to date numbers with order intake and net sales up 8% and 6% respectively. Gross margin strengthened in the quarter and also year to date and as Bo described our companies they are successful in transferring price increases to the customers so that's really good of them. EBITDA and EBITDA margin was strong in the quarter and even if and even higher actually if you exclude the negative effects Bo described regarding revaluations of earnouts and they are connected to one company performing better than expected which of course clearly is a good thing and if you exclude this revaluation the EBITDA margin would have been then 14.9 in the quarter Year-to-date we are on 14% in line with our financial target. Finance net decreased 4% in the quarter and 11% year-to-date mainly due to lower interest rates. Tax cost increased 22% in the quarter and 14% year-to-date as a result of the higher profitability mainly. Strong growth in earnings per share of 23% in the quarter and 10% year to date and I will talk about that a little bit more on the coming slides. Return on capital employed same level as we had in Q1 on 18%. Operating cash flow improved on the back of the higher result that was up 20% in the quarter and is up 10% year to date. And finally Nettet EBITDA was on a controlled level of 1.7. So let's look in more detail on the cash flow. Cash flow from operating activities improved 20% as I said mainly due to the higher result. Inventories were in line with last year, but working capital in total is up slightly, primarily due to increased receivables coming from the higher invoicing pace. Cash conversion continued to be very strong at 137% in the quarter and working capital efficiency took another improvement step. And looking at the EPS, following a soft development for some time, EPS improved significantly in the quarter, up 23%, actually on an all-time high level. And of course taking historical share splits into consideration. Main reason is obviously the higher operating profit but also the lower finance net that I talked about helped as well. And looking at the more long-term perspective the three-year CAGR it was minus two coming from a strong level than 2023 and plus seven percent looking at the five-year CAGR. and lastly looking at the financial position and the net debt that is seasonally high in quarter two and due to the dividend payout of course it increased versus last year because of the increased acquisition pace however our net debt ratios are stable and on a controlled level net debt equity on 55 percent compared to 52 last year and net debt EBTA slightly higher than last year and it came in at 1.7 and if you exclude earnouts it is on 1.6 compared to 1.4 last year and the financial net debt which is then the part of the debt that relates to borrowing that needs to be refinanced is also low at 1.2 In conclusion, our financial position is strong, creating good room for continued value creative acquisitions and also organic growth initiatives. I think this is also confirmed by S&P who actually upgraded their outlook for us from BBB- with stable outlook to BBB- with a positive outlook. So by that I leave over back to you Bo.