Inwido AB

Hello and welcome to today's webcast with InVido, where President and CEO Fredrik Møller and Peter Wellin, CFO and Deputy CEO, will present a report for the second 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 send 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 and welcome everyone to today's webcast covering a video second quarter of 2026. My name is Fredrik Möller. I'm the president and CEO in Vito and the next to me here at our Malmö Sweden in Vito head office is Mr. Peter Berlin, our group CFO and deputy CEO. And this is today's schedule. We will start off with a couple of key group messages, followed by deep dive into our business areas and our financials. Towards the end, we will wrap up with an outlook and a Q&A. And of course, as always, this material is also available on our website. In the months of April through June, InVido bounces back nicely from what was a challenging start to the year. Step by step, month by month, we improve our performance, resulting in our highest operating EBITDA to date for a second quarter. I think to raise profitability, to grow organically in both net sales and order intake, and to make another two acquisitions in the period, I think that really underlines the fact that our model and our strategy work really, really well. Because let's not forget that our market generally remains far from normalized. The ongoing Middle East conflict is de facto a wet blanket, hampering both demand and supply. So while fighting off raw materials surcharges and trying to pass on these costs to consumers, customers via price increases, we are, of course, benefiting from higher volumes. We have seen more operational efficiencies in our factories where we also leverage the investments that we made before, and we retain still a very healthy cost control across the group. The record-sized project order for Sidi Solutions in Scotland, of course, boosted our order backlog. which is now at an all-time high, and I think importantly worth noting as the consumer order intake also grew by 3% in the quarter. Our M&A activities continue to bear fruit. In Q2, we added another two companies to the other four we did recently, this time in the UK and in Croatia, the latter being yet another new market for InVido, making it 15 in total. Last but not least, cash flow was strong in the quarter, meaning gearing is at a good level, I think, 1.8 times on a pro forma basis, providing us with a solid war chest for further acquisitions and investments. and staying on that topic as you are aware in anticipation of organic growth bouncing back we are actively and successfully pursuing acquisitions in both existing and new markets now very pleased with our developments here adding six fine companies across two new markets and with 1.5 billion second edition top line without paying too much in terms of multiples. I'm very pleased with that and glad that our activities over the last 12 months are bearing fruit. At the moment, though, we still see, I mean, on the one hand, we see a healthy activity level across the markets that we're interested in, and we have a solid case pipeline. as the industry consolidation continues to offer opportunities for us. Still, with the prevailing market uncertainty, valuation gets kind of tricky because basically everyone has faced a very challenging Q1 this year and then a lot of the sellers are indicating some kind of hockey stick for the months to come. where we haven't seen the full impact of the Middle East conflict yet. So we are a little bit more selective than usual. And in the meantime, we, of course, also prioritize integration of the latest new family members that we have. And let's look at one of them, namely Marleks in northern Croatia, which is geographically also very close to our AJM business unit in Slovenia, i.e. this offers collaboration opportunities for these to be used. Marleks is a very fine company, ticking all the relevant boxes for us, being number one in its field, having a broad offering, a strong brand. proven track record, good profitability and offering very solid synergy potential. In short, I think it's it's an it's an exciting new acquisition. And I want to welcome them to the invito family. If we then go into the four business areas in order and we look at them in order of size, meaning we will start with Scandinavia. Well, it's a strong quarter by mass and his team building on the momentum that we saw towards the end of the first quarter. AB AB AB AB AB AB We have been fighting hard to balance the raw material energy transport surcharges linked to the Middle East conflict, balancing that with pricing, account by account, where very few, if any of our peers, have been following us. This is far from over. We have yet to see the full impact of the Middle East conflict. At the same time, we have yet to see the full impact from our price increases. But what is clear is that we prioritize profitability here, meaning that we sometimes walk away from projects, bids, tenders, where we see or feel that pricing as at a silly level. I think it's great to see that operating EBIT margin is about 15%. There's organic growth and a solid order book that now offers cautious optimism for the second half. But it really stands and falls with consumer behavior, which is still a bit subdued. We've had some negative FX translation effects from Danish krona to SEC, but at the same time, it was a bit positive from Norwegian krona. So net-net, not that much. Then moving across the North Sea to BA West, which includes the UK and Ireland. As you will recall, a lot of positives also here for Jonna and her team. Strong top line growth, both organic and via new acquisitions, where we added Sovereign Group in the second quarter, another really nice company, fine acquisition. in absolute terms we have a high profit here although the mix has been somewhat against us taking down the margin a little little bit the icing on the cake of course in the quarter is Saidi solutions 50 million pound order invito's largest to date which provides a really nice base load for the factory up in scotland over the coming five years and we're manufacturing and invoicing started now this month in the month of july England offers a tough market still. There's lots of consolidation going on and lots of price pressure, particularly in the consumer segment. It's a lot of political turmoil, as you all will have seen and read about with a new prime minister at some stage coming into office. And I think a win tonight and a win then in the final in the World Cup would be a huge boost for the entire nation. I'm particularly pleased over the collaboration and the synergy pursuit across the BU boundaries here. We have a nice critical mass in this part of Europe at the moment and some really nice companies working together, which bodes really well for the future. Moving to BA East, which is now Finland, Poland, Slovenia and Croatia. All of the Croatian numbers are not in here yet. They will be consolidated on a P&L and balance sheet basis from the third quarter and onwards. Antti and his team are still fighting a bit of an uphill battle across the BA, primarily in Finland. AB AB AB AB AB We get a broader exposure now through the Marleks acquisition, meaning we also have less dependency on Finland, which I think is good. It mitigates our risk exposure a bit. So to conclude this BA run-through, let's turn our focus on BA e-commerce, our online business, where Bo and his team continue on a very positive trajectory, again raising profitability, now actually for the fourth quarter in a row. making their margin trending up on a double digit basis on a rolling 12 month basis, which I think is really impressive. And it's really a combination of pricing, increased efficiencies and cost downs. A lean mean machine that is doing really well. As an anecdote, I visited the Copenhagen marketing office of this business recently, It's really a high-tech think tank, lots of exciting and promising AI stuff cooking in their kitchen, not only within marketing. And yes, it made me feel like a true dinosaur, but I had a great time there. So well done, guys. Now, for some more flavor on InVito's consolidated Q2 financials, I will hand over to you, Peter, please.

Thank you so much, Fredrik. I'll start with this page. This page is showing the income statement. To the left, you can see the Q2 in the middle, year-to-date, and to the right, last 12 months as well as last year. Starting with the quarter, sales is plus 16% compared to last year. Organically, it's plus 4%. We have a material price inflation in the quarter, but that has been compensated by growth, efficiency, as well as sales price increases. Thereby, the operating EBTA margin is plus 0.1% compared to last year, and operating EBITDA is plus 0.2% compared to last year. For the first time ever, the operating EBITDA in the second quarter is above 300 million. Between operating EBITDA and EBITDA, we have non-recurring items of 11 million, whereof 8 million are acquisition costs. Profit after tax is plus 27% compared to last year, and the EPS is plus 26% compared to last year, ending up to 340 kronor per share. Look at the year to date. The year started slower compared to last year with a slower performance in Q1, but then thanks to the organic growth of 4% in Q2, we have now an organic growth year to date of 1% compared to last year. The operating EBITDA margin as well as the operating EBITDA margin is below last year, but in SIG is above last year. And not only the operating EBITDA and also the EPS has been improved and is now above last year, also on year-to-date. Looking at latest 12 months, the sales is now on 9.5 billion. The operating EBITDA is 970 million and the money is 10.2% and we have an EPS of 911. This page is showing the development in sales as well as operating EBITDA compared to last year for Q2 divided between the business areas. We have organic growth in Scandinavia and the West and e-commerce, whereas we still have decline in East. East and then mainly Finland is still challenging. But worth noting, and also Frank noted, said that the result or the profit for operating beta for East is positive in the quarter as well as year-to-date. In West, the consumer market in UK is still challenging, but nevertheless, West has improved the result by 22 million compared to last year. And we have added two acquisitions in West when compared to last year, Victorian as well as Sovereign Group. And then e-commerce is continuing to improve the profitability. Sales is plus 9 million SEK and the operating beta is plus 11 million SEK compared to last year. If you don't look at the more long term trend for the second quarter, this page is showing sales as well as the operating beta margins for a second quarter from 2020 until 2026. We have the highest result in sick this year with the first time is about 300 million when it comes to operating in beta, but it's not the highest margin. We had higher margins in the second quarter during the pandemic. due to a higher degree of consumer sales during these years. However, the margin of this year is above last year and is also the highest for the latest three years with 11.5%. Pricing, efficiency improvements and cost control had a positive margin impact in a quarter compared to last year and has compensated the material inflation in the quarter compared to last year. This page is showing the cash flow and the cash flow generations. To the left you can see the cash flow generations and to the right you can see the capex as well as the capex in relation to sales. The cash flow has been improved in the quarter thanks to cash flow from operating activities, meaning better results compared to last year. but we are also positive impact when compared to last year's related to working capital. And that's mainly due to less increase in operating receivables in the quarter compared to Q2 last year. Looking at capex level, the capex level has been increased and it's now on a late 12 months basis, 3.4% of sales and a year to date on 3.2% of sales. So we are investing more in our facilities, in our operations to improve efficiency as well as in some cases also when it comes to capacity. Then looking at the balance sheet and then specifically looking at the net debt, this page is showing the net debt including IFR 16 and also net debt in relation to operating EBITDA. Net debt has been increased during the last quarters and mainly due to acquisitions and then of course we also paid a dividend now in the second quarter of this year. The net debt includes RFA16 debt of about 475 million. Looking at net debt in relation to operating EBITDA, we are on 2.2 including RFA16 and 2.1 excluding RFA16. If we then recalculate the running 12 months operating EBITDA and include and the latest acquisitions, we have a pro forma. Then we are on 1.8, excluding IFR 16, meaning we have comfortable headroom to the target of maximum 2.5. When it comes to our financial target on return property capital, we have a target of 15%. operating capital has been increased during the last quarters mainly due to acquisitions and now in the second quarter we have also improved the return operating capital by 0.1 percent units from 11.7 to 11.8 mainly thanks to improved result in the quarter compared to last year then looking at the order intake and the backlog Starting to the right, the order intake. The order intake has been increased by 23% organically in the quarter compared to last year. And glad we can see the consumer is plus 3% and then product is plus 58%. Of course, we have a positive impact from the record order in Scotland of 15 million sterling. And thanks to the higher order intake in the quarter compared to last year, we have also a record high order backlog of 3.3 billion. Product is plus 90% compared to last year and consumer is plus 12% compared to last year. If we then dig a little bit deeper into the order intake and we start with the consumer. This page is showing the organic oil intake growth in consumer for the latest four quarters from Q2 2025 until Q2 2026. If we start to the left, we can see the group development. 25 we have minus 4% then was minus 2% in Q3 was plus 2% in Q4. It was minus 2% in Q1 and then now in the second quarter this year is plus 3%. And then you can see that the pot developments in this quarter is mainly due to Denmark as well as in Sweden. The consumer order intake is still declining in UK and in Finland. However, the decline has eased compared to recent quarters. So the driver of the consumer markets and the positive order intake is related to Denmark and Sweden, which is also the largest consumer markets of Invidium. So in total, plus 3% in a quarter compared to last year. If we then do the same thing and we look at the product orders and first thing I would like you to notice is the scale of this diagram. The scale is now up to plus 300% and the consumer was plus 20%. So the volatility is so much higher on the product markets compared to consumer markets, and thereby we divide the order intake between project and consumer. And looking at this quarter, we have, of course, the high order intake in UK connected to the order of Scotland, and they are then driving the total order intake. We have the highest product sales and most prices in Finland. It was slightly decline and UK big growth due to or thanks to the big order in Scotland. Sweden will have also slightly growth compared to last year and the other markets. They only consists of about 30% of the total product sales within NVIDIA and there we have a little bit decline in Denmark. We have a growth in Ireland and also some growth in Norway. Now I then hand over back to Fredrik for the conclusions and summary.

Thank you very much, Peter. Yes, it's time to round things off. So let me reiterate today's key messages. Market-wise, first of all, it really is a mixed bag. Some markets are improving. Scandinavia is, of course, one of them, most notably, while some markets remain at record low levels, Finland included. We have not yet seen the full effects of the ongoing Middle East conflict. We have not seen the full impact of the EPBD, the Energy Performance for Buildings Directive that was recently implemented across the EU and should provide, of course, some tailwind in due course. But where there are challenges overall, there are also opportunities. And again, whatever is facing us, I feel that we are ready. We have a strategy. We have a business model, a governance model that works really, really well as evidenced in this past quarter. So we built a Ferrari. It's beginning to drive a little bit faster, which is making both the driver and the car smile a little bit more than in the first quarter. Outlook, yeah, there is low visibility in the crystal ball. It's, I think, necessary to be quite open about that. We continue to stick to our game plan. We execute it step by step in a really good way. The near-term priorities include, first of all, to secure the supply chain, both in terms of negotiating cost increases from the surcharges and make sure that we get the raw material that we need, i.e. secure the availability of key input. And of course, to work with value-based pricing to counteract the negative effects from the Middle East conflict. Generally continue also with the cost containment and then continue to pursue our M&A strategy in a good way. Although we are a little bit more selective at the moment. So we are also reviewing the business unit portfolio. We have some companies still on our red list. Thankfully, a lot of them are improving their performance, but I'm also not excluding any minor restructurings at this stage, but so far so good, I'd say. And as shown in Q2, we are really ready to embrace whatever the future has in store for us. So with that said, Peter and I would now be delighted to answer any of the questions that you may have, please.

Thank you so much for the presentation here. And as you mentioned, now it's time for the Q&A. So if you're calling in and want a question, please raise your hand by using star nine and then star six to unmute yourself and hand the word. The first caller here is Johnny Yin from SCB. You have the word.

Yes, good morning, Fredrik and Peter. Hope you can hear me. I have a couple of questions. Good. Starting off with the gross margin it looks very strong here despite these higher raw material costs and I think that you said last time that you were expecting some quarterly lag before it's fully compensated in Q3 so now you're actually performing better than I thought so I suppose this is mainly a reflection of you driving higher volumes of beneficial mix is that the correct interpretation and if not is it possible to split the sort of price effect and organic growth in this quarter?

So if we look at what we define as gross margin one, meaning we take sales minus material costs, then the margin has declined. Then we'll be able to compensate that when we look at gross margin two or gross margin as in the public report. We have been able to improve the gross margins thanks to higher efficiency in the productions, meaning we have been able to increase the volume in the factories without increasing the cost so much. So we have been able to compensate the material price inflation, which has been negative in general for the group, by higher efficiency and a better cost control, mainly in the factories.

understood so one should read this maybe that yeah this is volume organic growth mainly in this quarter down and it's high utilization rate and better profitability

Yeah, and also in some markets and some production units, we have made some investments and we see that we also have been able to bear fruit from those investments. So we have improved efficiency. In Vido has, during the last year, even though the market has been quite challenging, we have been investing quite a lot of money into our factories to improve efficiency. In some countries we have been able, or some production units, we've been able to see improvement in efficiency thanks to all investments. so yes it is volume and efficiency improvements so if you just take sales prices and material price inflations then there's a negative impact in the quarter understood so i suppose that the price effect will be more visible forward in Q3 and onwards then maybe is it possible to say something how much you have increased prices on average

We can take... It's a relevant question, of course. We can take Elite Fönster in Sweden as an example. And that is, of course, a positive example. But it's been a lot of blood, sweat and tears, and still is, actually, to a large extent, as we negotiate contract by contract. But they have, as most of our business units, sort of an annual price increase. I'm not talking primarily on... Yeah, link to price list, etc, which is roughly 3.5% for 2026. And then on top of that, they have been out again balancing these surcharges initially, also, of course, trying to negotiate them down and being quite successful with that. but then on top of that added added uh yeah it varies a bit but let's say three and a half to four percent in additional price increases we do not exclude further price increases either if this conflict continues and and at the moment it looks as it will then of course we will do our best to cover any additional price increases on the raw material or energy or transportation side. That's not easy. It hasn't been easy yet, but it's something that we're in a way forced to do and committed to do. So that's a Sweden Elitefenster example that I think is rather relevant for at least the Scandinavian BA, to some extent the e-commerce BA. When it comes to the UK, when it comes to BA East, it's been much more tricky because of the market conditions and the fierce competition.

Okay, understood. And just one more on the raw material. When you talk to your suppliers now, are you feeling that raw material prices are still climbing so that you're sort of chasing prices or have they sort of took a leg up and then settled at a higher level from here? What's your feeling there?

No, I feel that it's still moving materia, to be honest, Johnny. We've had a first wave of increases or attempted increases. And then, as I mentioned, we've sat down account by account and been rather successful so far in negotiations, in some cases even totally avoiding surcharges or at least mitigating them, decreasing them a bit. which offers comfort, but we haven't seen the end of this, particularly if the conflict continues. So it's still a top priority for us. And at the same time, I think it goes to show that in Vido, we have the economies of scale. We are big and important customers for these suppliers. And we don't stand and fall with one supplier. We have a rather healthy exposure that is balanced across several suppliers, particularly for the critical input goods. So I think we are probably faring better than many of the others in our industry. But it is a tough battle.

Understood. Then I want to move to demand a little bit, because I think Yeah, in your last quarter in Q1 you said a stronger exit into Q2 here and it seems like it materialized as well. What is sort of your gut feeling when you look at your momentum here entering the second half of this year? Is it sort of, yeah, these organic growth rates, are they fair to continue to expect in Q3 what you're seeing now or elaborate a little bit more there?

You're right in saying that we did capture a lot of the positive momentum primarily in Scandinavia from the end of Q1. And then of course the weather improved quite substantially and that's made a difference. And then Q2 is always going to be a stronger quarter than Q1. But we've seen a gradual improvement from April to May and from May to June. So that's of course promising. But it varies a lot still from one market to another. Denmark stable at the good level. Sweden gradually improving. But so far more on the project side actually than the consumer side. where if you read the war-linked headlines in the newspapers, of course, of inflation potentially going up implicitly, then indicating that also your interest rates on your mortgages will go up. Then, of course, the households become a bit more sidelined again, and the whole Middle East conflict becomes a wet blanket still on consumer purchases. Norway... bottomed out but not really taking off either Finland super tricky Slovenia Croatia Poland rather cautiously optimistic about those as well as Ireland and then UK is really patchy Scotland perhaps a bit better than England but the difference is really between consumer and project where consumer is still really pressed, I would say. But of course, I mean, to answer your question, the order intake that we saw now and the organic growth gives us some comfort. And the order backlog is, as Peter mentioned, at a record high level. but it of course also includes this sidey solutions order in Scotland. So yeah, cautious optimism, I think both in terms of volume and in terms of profitability. But the pattern over the last six to 12 months has been extremely bumpy. It's literally been from one top month to one all time low month and then back up again. So it will be a bumpy ride also going forward. And I think that's, It's quite important that we keep our eye on the ball and we execute on our plan. It will not be a walk in the park. We work with scenarios rather than anything else. And of course, in a positive scenario, the Middle East conflict fades out in some kind of fashion. And hopefully also the Ukraine war, of course, not to be forgotten. And that would be, I think, quite a nice boost to demand across both projects and consumers. Meaning, as Peter said before, we will have a very nice leverage from the investments that we've made in the past few quarters where we're really stepped on the gas pedal. And I think we've done a good job holding back costs, holding back additional resources already now in the second quarter. It's very easy to when you see demand going up all of a sudden that you start adding back resources again. But that's not really been the case for us so far. And so that's a priority to really leverage the efficiency enhancing investments that we've made in the past.

I understand. It's a very tricky market right now. But as you said, it's a very bumpy between the quarters here. So I just want to make clear that the organic growth in this quarter at least is it's a fair representation of what sort of the underlying demand was in this quarter because you also said you had some delays of deliveries from last quarters and and stuff like that. So, I mean, there's no unusual timing. We should read this as the actual demand in this quarter.

Just one thing that, John, is, of course, that Q1 was very, very weak. We had a cold winter this Q1, especially consumer market. It's impacting consumer market. So some consumer were then postponing both when it comes to sales as well as the order intake, not placing the orders, not taking the sales in Q1. It was then postponed to Q2. So we have some of extra Q2 related oil intake as well as sales due to the lower Q1. So it was compensating Q1. So it should not be very hard for us to exactly calculate how much. But still, we have a positive oil intake as well as sales in the consumer market for the first six months. But some of the growth of Q2 should be related to Q1 if the winter has not been so cold and so long as it was.

I understand, so maybe it's more fair to look at them combined to see the underlying demand.

Yeah, that's a good point.

Good, okay. Just one final on profitability on EBITDA margin here. One on Western e-commerce because in West, the EBITDA margin looks to be down despite organic growth and better gross margin. So can you give us some comment on what's happening on the operating expense side there? And secondly, the e-commerce looks very strong in beta margin here, 12.6% in this quarter and over 10% in the only 12 months basis. So do you think that these levels in e-commerce is sustainable or do you see any signs of increased competition or similar pushing down the e-commerce margins from here onwards?

Starting with East, we still have a very challenging market when it comes to the consumer markets. The project market, especially in Scotland, is doing well. The acquisitions are doing well as well, but the consumer market is very challenging. Due to the consumer market, the market has then declined in the quarter compared to last year, even though it was a good sales growth, but the sales growth was mainly on the project markets. The second question you have when it comes to e-commerce. So before the pandemic, the e-commerce had an operating beta margin between 11 and 12%, around 11%. And the target is, of course, to come back to that level now in the future. So we are on a good trend when it comes to e-commerce and profitability. We have taken down costs. Last year, we took some restructuring costs within e-commerce. We closed down some areas, and we were more focused on pricing instead of volume, and that has then been a positive impact. So, yes, we continue to see improvement on the margins, and the target is to come back to the same level as we were on pre-pandemic.

Maybe I can just add to what Peter said on the last topic of e-commerce. For them, it is a rather tricky balancing act between top line growth and profitability because entering new markets, which is part of their ambition and part of the group's ambition, is at least in the short term, rather costly. It requires a lot of upfront marketing costs to to just gain a foothold and to maintain that foothold. So that will be a balancing act also going forward. The good news is that right here, right now, we have a very lean and mean machine all the way from operations and manufacturing to cost-efficient high-tech marketing to value-based pricing. And I still think that there is, and I know Bo's ambition is to capture even more. And on top of that, they're doing a fantastic job with their working capital. So hats off for that team. It'll be, of course, very exciting and quite promising to look at the performance ahead as well.

Okay, I understand. Thank you. That was all from me. And have a great summer, Fredrik and Petter.

Thank you very much, Janne. Same to you. Thank you for the questions there. We'll now go ahead with the next caller, which is Linus Alentum from Nordea. You have the word.

Perfect. Hi and good morning Fredrik and Peter. Just starting with the follow up question here on the raw material prices. Maybe you already answered it, but I mean if the pure price cost effect was negative here in Q2, should we expect that gap to narrow in H2 as pricing catches up here? Or do you still see a negative net effect here also in H2?

H2, perhaps not really, but in Q3, I foresee a negative impact. And then I submit we are on the right path as a right level in Q4. Some of the material inflations has been maybe also postponed. So we foresee a higher material inflations also coming into Q3. But in Q4, we will be on the back to basis, if you know what I mean.

All right, back on track. Perfect. Then just a question here on Finland. I mean, it remains weak here with low volumes and price pressure that continues, although you're still profitable here. I mean, are there any signs here of any stabilization here? And under what conditions here would you consider further restructuring of the smaller loss making units? And if so, what would be the timeline for this?

Yeah, I mean, there are some lights at the end of the horizon. I think also as one or two of our peers disappear into Chapter 11 and are not being picked up by anybody else, that of course offers opportunities for us. We have some hopes for additional tailwind coming from implementation of the EPBD in Finland. And there are talks, early talks about maybe implementing something similar to the root program that we have in Sweden, i.e. some more incentives from the government to boost both new build and particularly renovation. But it's early days. When it comes to, and again, at the same time, given all of that, I think we're done and are doing a really good job. in terms of cost alignment. I'm rather impressed by that, actually. When it comes to portfolio evaluation, yeah, that's something we do on a continuous basis. As I said earlier, we've seen some positive movement, generally speaking, when it comes to the companies listed on what we refer to as the red list, i.e. being in the red on a last 12-month basis. In Finland we have some small entities of course that have lost some 50-60% of the volume where you simply cannot counteract that from a cost alignment point of view. So they're literally down to the bone chewing. At the same time, some of them are rather dependent on a project here and there. So the picture can change quite dramatically actually from one month to another. But yes, I wouldn't exclude additional restructuring. And if that happens, it would be at the earliest, I think in Q4 early next year. And again, we're literally only talking about the smaller entities here.

Yeah, the smaller loss-making ones, I guess. Perfect. A question here on the side order. I mean, it gives you strong visibility here for several years in Scotland. I'm just wondering how large is the pipeline here for similar social housing tenders? And I mean, should we think about this win as something that can be repeated here in the future? You've talked about a lot of the pipeline in Scotland of these types of projects.

Yeah, it's a relevant question, Linus. I mean, you will recall that in December 2024, we announced what was then to date the largest order for Inbido Group, again, coming from SIDI Solutions, actually, it was 22.5 million pounds at that time and that was the first part of a two-stage deal where the second part is actually up for confirmation later this year or maybe at the latest early next year so that would theoretically be if we win it or if they confirm it that would be another 22.5 million for Saidi I think the pipeline looks rather healthy. And of course, it sometimes comes across perhaps as we have, you know, that there are no other actors in that market. But there are. The competition is actually quite fierce. But the supply is rather healthy. There's a lot of social housing, not only in Scotland, but also in England. And we are AB AB AB AB We remain quite optimistic about the exposure here. Let's not forget that sovereign group that we added now in the second quarter is also active in this field, but primarily within England, whereas side solutions together with Walker Profiles in the west of Scotland are active primarily in Scotland. So we have really good coverage here and yeah so the guys are they're doing a fantastic job well positioned for additional projects again these are 50 million pounds it's not something we get every week or every year perhaps but there are I mean the projects that are out there and that will come up for tendering have a decent size we're talking a few million pounds here and there and over a shorter time frame sometimes. So yes, it is an attractive market. But the competition is very fierce.

And you have capacity in sovereign group as well if tenders would appear in England as well.

Yeah, that's a very good comment, actually, that I forgot to mention myself. And I think it's linked also to the fact what I mentioned earlier, that we have critical mass, generally speaking now, from both the manufacturing but also market coverage point of view in both the UK and in Ireland. And the collaboration between the entities is going steadily up, which is really promising. And on top of that, I think these entities are doing a really good job with their project orders. AB AB AB AB POCKET MARGIN WHAT YOU ACTUALLY END UP WITH TOWARDS THE END OF THAT PROJECT IS AT LEAST AS GOOD AS AND HOPEFULLY AND HAS PROVEN HISTORICALLY BETTER THAN THE TAKE ON MARGIN SO AGAIN THE PROJECT MANAGEMENT SKILLS HERE ARE REALLY REALLY IMPORTANT AND THANKFULLY IN THE CASE OF BOTH SOVEREIGN AND SIDE AND WALKER PROFILES THEY ARE REALLY REALLY GOOD ALL RIGHT THEN

On synergies here, let's change subject. You mentioned that you have made some integration improvements here. Could you give a more concrete update perhaps on what has been implemented here? Is it sourcing, manufacturing, cross-selling, overheads and maybe quantify it a bit?

The biggest synergy we have are within procurement materials and purchase have not yet really started. Cross-selling is very little within this group because we have a decentralized model where each business units are focusing on their own productions and their own sales and their own branding. So cross-selling and demonstration costs is quite limited. So our main synergies are within purchase as a procurement and has not really have started for the latest acquisitions. Some acquisitions we did last year when it came to SNIC, when it comes to Aaron Fenster and FastFrame, there we have started to see some impact, Victorian a little bit also, but the other ones, quite minor changes so far. It will come more It takes roughly three to four quarters before we can see some impact when it comes to procurement. Then when it comes to productions and production efficiency and how to run the factories, that takes a bit longer time. In some cases, we have to make investments. Normally, it takes one to two years before we can see some impact on the efficiency improvements.

All right so still more to come here and just one last question here from my side I mean you mentioned that the competitors have lowered prices here while you have been more selective in the quarter would you say that you have lost the market share in the quarter or what are your views here?

It's tricky to say right here, right now. Where we do get that kind of market intel, particularly in a market like Sweden, there's always a lag of at least a quarter for that data to arise. In some cases, I think the short answer is yes. Am I worried about that? The answer is no. I'd rather continue to walk away from some larger projects or tenders where we believe being on top of our own cost base and given the uncertainty that's prevailing that where we actually walk away instead and have somebody else take a loss on it. So I'm not at the moment and nor are my BU or BA presidents I'm overly concerned about market share, to be honest. In this market, there are a lot of challenges, there's a lot of uncertainty, but there's also an opportunity to work with value-based pricing in a really solid way. At the end of the day, in our business, it all comes down to OTIF, i.e. on-time, in full, i.e. delivery precision. And there we score really, really high also in terms of quality. And so that gives us a really, a really solid starting point to charge a decent price for the value that we bring to the table.

All right, that is very clear. Thank you very much for taking my questions here, Fredrik, Peter. I'll let the next one in.

Thank you very much and have a great summer, Elias.

Thank you so much for those questions. We now go to the next caller, which is Igor Tubic from DNB Carnegie. You have the word.

Thank you. I just have a couple of follow-up questions. If we just start and look at the Danish market, you mentioned that there was some pricing pressure in Q1 and I just wonder how do you manage that so to say in Q2 and should we expect or have you been able to increase prices there as well or can you just elaborate a little bit more about the Danish market?

The Danish market had lower prices in the first quarter but we decided not to reduce the prices as much so we went more for profit before volume and that meant that our our factories was we had a little bit too low productions compared to our capacity in the first quarter but we have gained that in the second quarter so thanks to we're not reducing the prices in the Q1 we could then had better margins on the orders we came into in the second quarter and the reason the main reason was as what happened in Denmark was many things of course we had a cold winter and that impacted the whole markets and we had an election in Denmark but also the the problem with with and with Greenland and US and the conflict and that impacted the total market in the first quarter and the total market went down and then then starts a price fight to to buy in orders to the factories but we decided to hold on our prices more lost volume in the first quarter but thanks to that we gained margins in the second quarter okay and if we i mean in terms of the trend you mentioned that the consumer is starting to improve in Denmark then I assume that we should not expect any price increases for the Danish market just more volume driven exactly so the mark the prices went back to a more normal level in the second quarter so we foresee a more stable pricing development in Denmark so it's more related to volume in the future

And in terms of the EPBD law that you mentioned also, when do you expect to see some sort of effect from that? And have you started to see an effect in any of the countries that have implemented that?

Very limited, if any, effect so far. The deadline for the EU member countries was 29th of May. Still, there was an opportunity here, if you want to call it that, for each member country, if they had legitimate reasons, they could postpone the implementation of the directive, i.e. into legal text, national law. And Sweden was one example of that, but a few other countries as well. where you have lower use of fossil fuel for your heating and where your energy efficiency is already deemed to be at a decent level, then you could postpone the implementation. So I think we'll see limited impact for the full year at all in 2026. However, I mean, I mean there is a discussion in Sweden again using Sweden as an example of the 17th of August where Boverket will discuss and hopefully take a decision about implementing a similar to root an incentive on renovation of houses private houses built before 1989 AB AB AB AB We've seen a general increase in awareness of the fact that windows and doors have a huge impact on your quality of life, but also your electricity bill. So I think that has helped us a bit. And to some degree, it explains why we've seen an uptick in demand now in the second quarter. I think that awareness is quite important and it's become higher in countries or markets like England, for example, where we still use a lot of single glazed windows rather than double or triple glazed. So a lot of upside potential. I don't think we should expect too much coming from the EPBD this year, but hopefully more tailwind in the coming years.

Okay, thank you. That was all for me.

Thank you so much for the questions there. We'll now round up this Q&A session with some questions that have been sent in to us. And the first one is, could you provide more details on the growth outlook for the Nordic markets in the second half of 2026? Yeah, thank you.

My feeling is that we've actually covered that one through questions from the analysts here. So I'm not ducking it. I just feel that we've already responded to it.

Thank you for that clarification. Maybe this one. Do these long term contracts in the West have price escalation clauses?

In some cases, yes, and they are related to some index. If some indexes are going up a certain level, then there is an opportunity to have a price discussions with the customers.

Thank you. That was all the questions we had for today. So thank you so much, Fredrik and Peter, for presenting here today. And thank you all for calling in and sending us questions. And we wish you a pleasant summer.

Thank you very much. Just to round things off, first of all, pencil these dates into your calendar, please. And don't forget to follow us on LinkedIn. Last but not least, on behalf of Peter and myself, thanks, everyone, for attending this call. We wish you all a very nice and relaxing summer. Bye for now.