Lagercrantz Group AB (publ)

Welcome to Lagercrantz Group Q2 Report 2025-26. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Jorgen Wigg and CFO Peter Teisel. Please go ahead. Welcome to Lagercrantz Group Q2 Report 2025-26. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Jorgen Wigg and CFO Peter Theisel. Please go ahead.

Thank you and welcome everyone to our interim report. We do this every quarter, so this is our Q2 report. As you know, we are starting our year 1st of April, so we are concluding the numbers at the end of September as of today. Together with me here, myself, Jörgen Wig speaking, and also Peter Tissot right beside me here. When we get to the numbers, we'll let him do that part as well. So welcome, everyone. I would like to start off with just a short introduction to the group for those of you that are new to the group. And then carry on with the report soon in a couple of slides. Well, Lager Krause is the tech group or an industrial group where we are working with a buy and build model. building a group around a number of subsidiaries, currently some 85 subsidiaries or profit centers as we call them, building leading positioning, expansive niches is where we are. All companies are working autonomously, but we are gathering them into our five divisions, as you can see here, the electrified control, tech sec, niche products and international divisions. You can see the number of profit centers or companies within each of these divisions. We have been on the stock exchange since 2001. And before that, we were part of the Bergman & Dehling Group, but under our separate name since 2001. We are currently just going through the bar of 10 billion in terms of sales or revenues, and we are some 3,400 employees within the All what we're doing in the companies are B2B. So we're selling hardware and all types of industrial products in niches to other companies. So it's B2B all of it. And we are firm believers in running it in a very decentralized way with a decentralized organization with some 85 profit centers gathered in these five divisions. You can see over to the right where we have our locations. We are Northern European today, with a number of footholds around in Europe, and you can see some 30% or so is in Sweden. Denmark is our second biggest market, but then Finland, Norway, and the UK are of similar size, as you can see from one of them, if you look into it. You can also see that most of what we're doing in the businesses are also, to some extent, export related. So you can see all over to the right where we also have some footholds who are subsidiaries in a number of places around the world. So it's in the US, in China, and in India as well, where we have some footholds where we try to sort of establish ourselves and drive exports through those hubs, as we call them, in different parts of the world. So that's an introduction to the group. We are coming into the interim report then. Yeah, I think we could close another strong quarter. We could see here that we have had a strong trajectory with our profits picking up every quarter for a number of quarters now. And this was in line with before tax with around 15% and the figure now was 17% so slightly above where we have our profit targets and a strong really sort of solid report we think it was. So you can see where we have our where we've been over the years. And you can see that we have also increased our margins a little bit along the way. And that was the case also this quarter. So a strong quarter and approaching the 1.4 billion in terms of profits. we communicated a 2 billion goal some about it about two years ago and we should reach the 2 billion within within five years that we said and we are well in line with that with that pace here now as we as you can see so yeah we move to the next one I think Talking about the interim report and the Q2 and the business conditions, we noted that the market situation was generally stable and slightly better during the second quarter compared to the same period previous year and earlier on. So it's slightly better. This quarter is always very sort of affected by the summer. So it's actually not until September where we see where things are actually, where things are turning out and it looks fairly good in September. So a strong end to the quarter as well. Of course, demand continued to vary across companies and segments, but we saw some strong demand, especially within the electrified electrification and the infrastructure. within the international division and within the tech sector division that had all good order intake while demand was weaker in control in niche products divisions. We also concluded that the order intake was comparable for comparable units was slightly above invoice sales and increased organically with five percent compared to the same quarter previous year and that was also then adjusted for the currency effects with that have impacted some negative by two percent. So stronger water intake than the organic growth that we had in sales, that was only 1% really in the quarter. But we see that as more of an effect of sort of how much we managed to invoice during the quarter. So that's why we also highlighted here the percentage in water intake. can see down to the further down here the slide that we also have the net revenues by business type and it's good to see that we're also in line with our proprietary products target of reaching the 85 and we are currently here on road moving 12 months at 79 but in the quarter it was 80 so we crossed that sort of limit as well or that that bar as well now here during this quarter And you can see also that we from the far right there, you can see that we are over the years getting more and more international with the share of Sweden is growing, but as a percentage of the total, it's actually declining a little bit. But as we become more international. Peter, maybe we should hand over and look at the numbers a little bit.

Yes, thank you, Jörgen. As mentioned before, we are quite pleased to report another strong quarter with the earnings before tax up by some 17%. Net sales increased by 13% with acquisitions contributing with 14%. The organic growth in sales were 1% and the currency effects were negative 2%. The EBITDA increased 14% and the EBITDA margin improved to 17.9%. We're not entirely happy with the cash flow in the quarter, but we feel it remained quite robust. If we turn to the six-month period, the net revenues increased by 11% with, again, the acquisitions contributing with the majority of 12%. The organic growth was slightly higher at 2% and the currency effects were negative 3%. And the EBITDA increased 13% and the beta margins also improved to 17.7%. And as Jörgen mentioned before, we're well on track towards our long-term target with our earnings before tax improving by 15% in the first half year. And as you can see, cash flows in the little bit longer period increased by 11%. Return on equity was at 30% and the equity ratio was 31%. Our internal measure, the profit of working capital was at 73% compared to 75, a little bit stronger last year. And So far this year, we have completed five acquisitions, but the pace is 10 acquisitions in the past 12 months, contributing with some 12% growth in net revenues. If we look at divisions, we notice that we have a solid growth in four out of five divisions and especially strong in the international and electrified divisions. We also saw strong EBITDA growth. and margins in improvements in three out of our five divisions, that is in the electrify, control and international divisions. But we also saw some headwind in the quarter, especially for tech sec that we have seen in a couple of quarters, but this quarter also for niche products. And maybe Jörgen, you can comment by division.