Karnell Group AB ser. B

Good morning all and welcome to Canell's first quarter of 2026 earnings webcast. I'm Petter Wallenius, CEO of Canell and with me today I have our new CFO Niklas Svensson. As usual we'll begin with an overview of the quarter and how our strategy continues to drive profitable growth. Niklas will then walk you through the financials and segment performance in more detail After that, I'll return to present the two acquisitions we have completed during and just after the quarter before we wrap up and take key takeaways and open the floor for your questions. For those of you who are joining us for the first time, Carnell is an active and long-term owner of industrial technology companies. We focus on acquiring small to medium-sized businesses with strong positions in niche markets. We are guided by a disciplined acquisition strategy that prioritizes quality and industrial leadership. Following our most recent acquisition, Carnell now comprises of 20 companies across Finland, Sweden, the UK, and for the first time, I'm happy to say, in Italy, employing roughly now 800 people. As always, our goal is transparency and focus, highlighting what matters most to value creation in our group. And with that, let us turn to the Q1 results. We started 2026 with a strong quarter, delivering broad-based organic growth, margin expansion and a clear step up in cash generation. Net sales increased by 27% to 457 million SEK with an organic growth of 13.1%. That is the strongest organic quarter we've had and delivered since we became a listed company. EBITDA rose 73% to 66 million corresponding to an EBITDA margin of 14.5% up from 10.7 a year ago. Importantly, organic EBITDA growth was 43%, so the margin expansion is real and operationally driven, not just a mixed effect from acquisitions. Cash flow from the operating activities reached 59 million SEK. That's more than four times the level we had Q1 last year, supported by both higher earnings and improved working capital versus last year. Net debt to EBITDA, excluding leasing, remained low at 1.4 times. That's well within our financial framework, even after completing the OBA acquisition during the quarter. Overall, this is an unusual strong start to the year, and importantly, it reflects strong execution in our existing companies rather than a broader market improvement. Turning to the next slide, if we look at the last 12 months, our EBITDA margin now reached 14.6%. That's a new high for Canel and a clear step up towards our medium term target of 15% EBITDA margin. LTM net sales now stands just under 1.8 billion SEK, up from around 1.5 billion a year ago. This improvement reflects the combined effects of operational discipline across our group companies and the continued positive contribution from recent acquisitions. The broader market environment remains mixed and the visibility is still limited. The strength of our Q1 reflects strong execution in our companies, some of which are outperforming their respective markets. This is rather so than the broader market improvement in demand across the board. Our decentralized model and the quality of our businesses allow us to develop the group somewhat independently of short-term cyclical conditions. Our focus remained unchanged, profitable growth through operational improvements and carefully selected acquisitions that strengthen our industrial technology platform. And with that, I'll hand over to Niklas, who will walk you through the financials and the performance of our two business areas in more detail.

Thank you, Petter. So let me walk you through the financials for the quarter and starting off with the group. Net sales increased 27% to 457 million, with an organic growth of 13%. Acquisition contributed 16%, while currency effects were negative 2%, where the Swedish krona has strengthened against both euro and sterling during the quarter. On the right hand side, EBITDA increased 73% to 66 million and organic EBITDA growth was 43%. Acquisitions contributed 34% and currency was negative 4%. The EBITDA margin improved from 10.7 last year to 14.5% this quarter. And the margin improvement was broad-based, supported by strong organic development, especially in niche manufacturers, and also continued positive contribution from last year's acquisitions. During the quarter, the quarter also includes 1.3 million in acquisition costs. So moving on to our segments, product companies delivered net sales of 224 million, which is up 30%. This was primarily driven by acquisition, which accounted for 28 percentage point of growth. Organic growth came in at 3% against the strong comparison quarter last year, and currency effects were marginal at minus 1%. EBITDA increased 71% to 30 million and organically EBITDA grew 8% with a margin of 13.4%, which is up from 10.2 last year. The recently acquired companies continue to perform in line with our expectation and contributed with stable margins. And product companies represent around 50% of group net sales during this quarter. Niche manufacturers had an exceptionally strong quarter when net sale increased 25% to 233 million and with an organic growth of 23%. Acquisitions contributed 6% and currency was a negative 3%. EBITDA increased 62% to 51 million with organic EBITDA growth of 61%. The margin reached 21.7% up from 16.8% last year. All companies in the segment developed well with stable demands and good cost discipline. I should also note that the quarter was supported by non-occurring project activity in one of our larger units, which contributed meaningfully to the strong organic development during the quarter. And niche manufacturers represent the other 50% of group net sales during the quarter. Turning to cash flow, operating cash flow for the quarter came in at 59 million compared to 13 million in Q1 last year, which is a significant improvement. Cash flow before changes in working capital was 62 million up from 40 million and is driven by the higher result. And the working capital change was a negative 3 million, which is a considerable improvement from the negative 27 million we saw in Q1 last year. On an LTM basis, operating cash flow reached 265 million, an increase of 51% compared to LTM Q1 last year. And this is the strongest level we have reported to date and is, of course, also partly driven by acquisitions. And finally, our capital structure. Interest bearing debt at the end of the quarter was 512 million, up from 370 million at the year end, and reflecting the debt drawn from the UBA acquisition done in March. Cash and equivalents stood at 98 million, giving us a net debt excluding leasing of 413 million. EBITDA excluding leasing adjustments on an LTM basis was 299 million, resulting in a leverage ratio of 1.4 times, which is well within our financial target. Total financial net debt, including also leasing liabilities, continuous considerations and put and call options related to non-controlling interest was 727 million. And overall, this position as well to continue investing in both organic growth initiatives across our existing companies and also new acquisitions. And that concludes the financial overview. And I'll now hand back to Petter before we will open up for questions.

Thank you, Niklas. In March, we completed the acquisition of UBA, our first acquisition in Italy. And it's also a meaningful expansion of our niche production business area. OBA is an Italian company based out of Bologna, and it's built a strong position as an approved tier one supplier of premium exterior and interior accessories for leading automotive OEMs. The company is deeply embedded in its customer development processes, working with them from early design all the way through to mass production. That's the kind of partnership that is hard to replicate and exactly the type of niche position we're looking for in every acquisition we make. The company generates around 11 million euros in annual sales and it has consistently delivered strong margins. We acquired the company from the second and third generation of the founding family, with the second generation stepping back as the next generation now takes over operational leadership. This is a familiar setup for us. We step in as long-term industrial owners alongside the team and the family that knows the business best. Italy has been a focus area in deal sourcing for some time. It's a deep pool of family owned, technical, strong industrial businesses where our long term ownership model resonates well. We acquired 90% of the shares with an option to acquire the remaining 10%. complemented by a performance-based earn out between the years 2026 to 2028, ensuring continuity and alignment with the next generation of leadership in the company. Turning now to our latest And after the period, we completed our most recent acquisition in Flex7. It's a UK-based niche specialist who specializes in modular lightning connectors and control systems. Flex7 was founded in 1998 and is headquartered in Tyreford, just outside of London. The company designs and manufactures plug and play wiring systems used in the electrical fit out of commercial and public buildings. For example, in schools, hospitals, offices, retail and hospitality. It is an end market that benefits from structural demand around energy efficiencies and smart building infrastructure. The company has built a leading position in the specialized segment with a recognized brand and loyal installer base. Margins have been strong and consistent. We acquired 98% of the shares from the founder and other shareholders with the managing director retaining 2% stake and continue to lead the business. As with OBA, this is a transition from a founder ownership to a long-term industrial ownership And that's exactly the type of situation that we are built for and cater for. Flex7 fits squarely in our product company's business area and is a good complement to our existing portfolio there. Looking at the broader pipeline, activity remains healthy, particularly in the UK, Italy and the Nordics. And as always, we'll stay disciplined on valuation and structure. We will walk away when the terms do not match our return expectations, and we have done so multiple times in recent quarters. OBA and Flex7 are both good illustrations of how we want to grow selectively with quality and long-term value creation at the center. To sum up, Q1 was a strong start for 2026 for us. The broad base organic growth, a meaningful step up in profitability and one of the strongest cash generation quarters to date. Both businesses areas contributed positively. Niche production delivered exceptionally organic momentum supported by in part some non-recurring project activity in one of our larger units. The product companies delivered stable organic performance against tough comps and a strong contribution from recent acquisitions. We have strengthened the platform in a meaningful way, completing our first acquisition in Italy with OBA and adding Flex7 in the UK shortly after the period end. Both are high-quality niche businesses with strong margins and are structural demand drivers, and both brings us closer to our long-term ambitions. M&A pipeline remains active and is broadening across geographies and end markets. Our balance sheet provides the flexibility to stay selective yet active. We entered the rest of 26 with confidence in our strategy, in our team, our ability to continue to create sustainable long term value creation for our shareholders. Thank you for joining our presentation today. And with that, let's open the floor for any questions you may have.