Inwido AB

Hello and welcome to today's presentation with InVidu where President and CEO Fredrik Miller and CFO and Deputy CEO Pete Tavellin will present a report for the first quarter of 2026. After the presentation there will be a Q&A so if you're calling in and want to ask a question please press star 9 to raise your hand and then star 6 to unmute yourself when handed the word. You can also submit in questions via the form to the right and with that said I hand over the word to you guys.

Thank you very much. Good morning, everyone, and welcome to today's webcast covering Invido's first quarter performance of 2026. My name is Fredrik Møller. I'm the president and CEO of Invido since two years back. And next to me here in sunny Stockholm today is Peter Wellin, our group CFO and deputy CEO. Looking at the agenda and the material as such, we have listened to your feedback. We use today a new format, hopefully perceived as being a little bit more to the point at both group and BA levels. We will have a question and answer session towards the end of this call. And as usual, the material is, of course, also available on INVIDO's website. A seasonally challenging quarter in a turbulent context. I think the summary of that heading sums it up quite nicely. Given that and given the circumstances, I have to say that I think we do it rather well. in what has been a challenging quarter. And to some extent, we have to start already at the end of the fourth quarter of 2025. We had a record breaking December following a soft October and November. And so it was a strong finish to last year, indicating that we would have a solid start to 2026. We, of course, also need to remind ourselves that Q1 is always the quarter with the lowest activity of the year, where we also need to balance our resources for the pickup in demand and pickup in this industry early Q2. So we cannot take out all of the costs that would hamper us in Q2. But January and February were really burdened by harsh winter conditions across all of Europe, really, including our markets. And on top of that, we had some turbulence in the Danish market, which is somewhat unusual for us. lower consumer confidence related to everything from the Greenland debacle to turbulence around the Northern Nordic share, which is a major factor on the Copenhagen Stock Exchange. And on top of that, harsh winter also in Denmark. And of course, also a new election. So there's a bit of a vacuum early in January, February. Momentum, however, I will get back to that momentum, however, picked up quite substantially towards the end of the quarter. Then on top of that came the Middle East conflict spoiling the party and adding to uncertainty overall, although we haven't seen any major impact of that so far. We'll talk more about later on as well. So for us, it was to some extent back to the drawing board without panicking. We continue to align our costs, but that is not something you do overnight. So it is, of course, a bit of a lag before that those measures kick in. And it means that we've had a start to what is now de facto the fourth year of a historic industry downturn. But again, given the circumstances, I think we do it rather well. I'm quite impressed by the efforts taken across all of our four business areas. And financially, Peter will cover the details of the financials in a second. But financially, we're back to quote-unquote normal pre-pandemic QI profitability. And that's also taking into account the fact that we had some negative FX impact in this quarter as well, around 6 million SEK. on EBITDA. What is important is that because there's always a silver lining and this quarter is no exception, March was substantially better than January, February. In fact, almost record breaking. And I think overall April looks good. So some positive momentum that bodes quite well for Q2 and onwards gives us some cautious optimism. There are lots of positives to celebrate in this quarter as well. I'm very proud of the achievements that we have made, going everything from R&D, where we launched new products, to sustainability, which has been award winning in many aspects. In fact, last Thursday, Our business unit outlined in Denmark was commended as the number one company in Denmark within diversity and number six when it comes to employee engagement. We're number two in employee engagement in Finland. We're number three in employee engagement in Ireland. So there's still a lot of positive activity, and I think we handle the downturn in a very, very good way across the group. Last but not least, before Easter, we... It concluded our fifth acquisition over the past six months, not bad. Through the acquisition of Sovereign in the UK, a fine traditional InVito transaction, I would say, really, really strengthening our UK platform. And it goes to show that the road map that we are on towards doubling the size of invito by year 2030 is definitely achievable and we do it in a still in a selective way where profitability is just as important as growth now we have one slide per each of the four bas and the order is by size we're starting with ba scandinavia Whereas I mentioned Denmark was softer, meaning that that had a negative mix impact on the overall figures, not only for the BA, but for the group as a whole. But I think, you know, solid performance also here, given the external factors. It's largely a volume and gross margin one matter, particularly in January, February, Denmark was softer, meaning that there was increased price pressure. March, much, much better. We came out of the doldrums. And as I said, that offers some cautious optimism for Q2 and beyond. Elite Transfer, to mention one specific BU, continued to gain share already late last year. And they have also launched a new precision range. I myself actually attended a two-day training course at our Leonhovda site. And walked away with a big smile on my face, feeling that we have a fantastic BU with fantastic products and people. So that's important for the future. If we move on to what is now a BA called West, previously Western Europe. West was in this quarter one of the stars, together with our e-commerce business. We have concluded three nice acquisitions, one of which after the quarter end, as I just mentioned, and they're all contributing nicely already. So great to see the integration happening and with quite attractive synergy potential upside as well. Saidi Group in Scotland bucked the poor weather and the cycle and in fact had their best Q1 to date, which makes a big difference positively to the whole BA. Worth mentioning more from a structural point of view in the UK and West market is that minimum wages have been raised yet again in England by 4.1% as from 1st of April. We've also seen a positive reaction from the cold and wet and windy and snowy winter that people have become and consumers have become much more aware of the fact that their electricity bill has gone up and the fact that they need to renovate their windows. And in addition to that, there is now something called the Warm Home Act in the UK, where the government is providing some incentives for renovation. In Ireland, we have seen the equivalent of the root subsidy in Sweden now being implemented, which of course provides some tailwind for our consumer business. Moving on to business area East. Finland, on top of very, very challenging macroeconomic conditions, had an unusually prolonged and cold winter. We had temperatures of minus 25, minus 30 degrees for several weeks in a row, meaning that it's not easy to run a window business during those conditions. And certain projects were, of course, deferred and some projects pushed to the sideline. Having said that, we have continued to shave off costs in a creative way, painful as it may be, and I'm genuinely impressed by Antti and his team and how they try to manage the situation. Price pressure is immensely fierce. given the fact that the market demand is just so low. So given the circumstances, I think we've done a good job. As a sign of the times, worth mentioning is that one of our larger competitors, Finestra, two weeks ago announced their bankruptcy. So it just goes to show that these are exceptional market conditions. Who knows? Hopefully it takes out capacity from the market. So hopefully that's in a way something that we can reap the benefits of as well. Poland looks solid. And of course, we've added AJM, the acquisition in Slovenia, making it our 14th market in terms of manufacturing and 18th market in terms of manufacturing and sales. So that's really great to see. Worth mentioning regarding Finland is also that as late as last week, finally, at last, the government is talking about implementing measures and relatively soon implementing measures. Again, similar to the route set up that we've seen in Sweden and that has been beneficial in Sweden. They're talking about implementing some of that in Finland to get the renovation and the consumer side going again, which would of course be extremely welcomed by us and everybody else in the industry. Last but not least, our e-commerce business is really going from strength to strength. I'm very pleased about the development here. It's the third consecutive quarter that we raised our profitability in what is de facto still a tough segment. Also here, of course, we saw some tougher conditions in Denmark at the beginning of the quarter, but quite a nice rebound towards the end of the quarter. And a 191% higher profit is not bad. 4.5 percentage points on the margin side, I think says it all. It's very impressive. It's a combo of cost efficiency measures that we started to take already one year ago and that we continue to take throughout 2025, but also very dedicated efforts within the field of value-based pricing. So these measures are kicking in quite nicely and In addition to Denmark, Germany is improving, and we have seen that we've gained market share in Q4 last year in Sweden, meaning that we are now number one in Sweden. And last but not least, we can see, judging by crossed pilot scores, which are quite important in this business, that we score far, far higher than our peers. And I'm not surprised. I visited our Glodene factory in Romania recently. Fantastic factory, great people, great products. So we have a bit of a lean and mean machine now when it comes to online in our e-commerce business, which is great to see. Onwards and upwards for Bo and his team. Now for more flavor on Indiro's consolidated Q1 financials, I hand over to you, Peter, please.

Thank you so much Fredrik. I'm starting with this page. This page is showing the income statement for Q1. As Fredrik mentioned before we had a good momentum end of last year. So when this year started we had a positive order intake in December and then the cold and long winter slowed down the market performance in the beginning of the quarter. Meaning we had too high capacity in the beginning of the quarter because we had forecasted with a higher activities which didn't occur. Thereby, we had a lower gross margin this year compared to last year, a decline from 22.9 to 22.1. Because we don't have the time, we didn't have the time to adjust that quickly in the beginning of the year. And it shall be noted that everything we do is made to order. If we could be able to produce an inventory, then we could have been running the productions fully, just producing the inventory, but we can't do that. So sales in the quarter was up by 4%, organically it's down by 2%. We had a slow start in the quarter, but more positive end of the quarter. The EBITDA was down by 6% compared to last year, and the operating EBITDA was down by 19% compared to last year, from 111 million down to 90 million. And here it's also including a negative FX impact of 6 million. Further down income statements, we can see that profit of the tax was down by 55% and the earnings per share was down by 73%. Of course, we have a higher minority stake in the quarter this year compared to last year. This page is showing the sales development as well as the operating beta development in Q1 from Q1 last year to Q1 this year. We can see that we have a lower resource in Scandinavia and in East. And we have a positive improvement or positive result improvement in West as well as in e-commerce. In West, we have a positive improvement due to, of course, acquisitions that have positive contributions to the result in Q1 compared to last year. But we have also an organic improvement in West when compared to last year. And then e-commerce has continued improvement as Fredrik mentioned before. Looking more on long-term perspective, this page is showing the sales and the gross manual one development from 2020 until 2026. And this year we have a higher seasonality impact in this quarter compared to last five, six years. A manual 4.3% is quite normal if you compare the margins pre-pandemic. Pre-pandemic, we were running between 4% and 5%. And in 2020, we had a margin of 3.3% in Q1. So we have a higher seasonality impact in the quarter. And it should be mentioned that the seasonality impact doesn't mean that there's an impact of the total year. It's just a shift between Q1 and the remaining quarters. Looking at the cash flows, the cash flows development is always negative in Q1 because our seasonality this year was no exceptions. So the cash flows before finance activities, excluding financial assets and acquisitions. was negative by 212 million this year compared to minus 187 million last year negative delta of 26 million due to the lower operating operating results so cash flow of operating activities was down by 24 million looking at the capex level and the capex level is slightly higher this year compared to last year but not a large a large increase Then looking at the net debt, the net debt has increased during the last months due to acquisitions. We have made five acquisitions, but only four have been paid for. The latest acquisition sovereign will be included from April and paid in April. So the total net debt end of March is 2%. 0.6 billion, including 490 million of IFR 16 debts and an acquisition debt of 586 million. Net deficit EBTA is 2.0, including RPAS 16 and 1.9, excluding RPAS 16. However, if I then calculate with a performer basing, meaning I calculate for 12 months running rate for the acquisitions, when I calculate the net deficit EBTA is on 1.7, meaning we have still a good leverage and a healthy position to make more acquisitions. Jan-Willem Wasmann, Return operating capital has declined in the quarter, mainly due to the lower operating result, but we also have a higher operating capital due to the acquisitions, so we have a decline from 12.4 in Q4 last year down to 11.7% in Q1 this year, rolling 12 months. looking at the order intake and the order backlog. On this page, you can see to the left, you can see the order backlog and to the right, you can see the order intake. I will come back more when it comes to the order intake on the two following pages. But starting with the order backlog, the total order backlog is 1% lower compared to last year. Project is minus 5% and consumer is plus 11%. Looking at the order intake, the total order intake is plus 3% in the quarter. Organically, it's minus 3%, where consumer is minus 2%, and project is minus 5%. So if we then dig a little bit deeper into the organic order intake consumer project started with consumer, this page is showing the organic developments, order intake developments of the consumer. From Q1 last year to Q1 this year, meaning the latest five quarters. To the left, you can see the total development of the group. You can see that in Q1 this year, we have minus 2% in Q1 and Q4 last year was plus 2%. Starting with Denmark, Denmark is quite stable. And then you can ask me, have you forgotten Q1 this year? No, I have not. The Q1 is exactly on the same level as last year organically, thereby there's no staple for Q1 for Denmark. So Denmark is quite stable. In Sweden, we had a higher oil intake, all the quarters in 2025. We had a really strong end of Q4, and then we had a little bit weaker Q1 this year. And of course, the winter has an impact, but also the root program has some impact for the order take. The root will not have an impact on the total sales or total development at 12-month basis, but it's a shift between Q4 and Q1. So higher order taking Q4 and a bit less order taking Q1. The consumer market in UK and Finland are still very challenging, and then the rest, which is only 30% of sales, there we have growth, and we see growth in Poland as well as in Germany. And once again, this is organic, so meaning the latest acquisitions are not included and also adjusted for FX. So in Q3 and Q4 last year, the UK and the Finnish markets was negative, but that was compensated by the Swedish, by the order intake in Sweden. And then it's Q1 this year, Sweden has not compensated the development of UK and Finland, and thereby we have a decline of 2% compared to last year. The product market. This page is showing exactly the same as consumer and organic developments of the order intake of the product market. But I can say this is so much more volatile. On the previous page, we had a scale from minus 25 to plus 20. Here we are more or less a minus 100 to plus 300. So the order intake within the product market is more volatile. And in total, it was minus 5% in the quarter compared to last year organically.