speaker
Susanna Hilles-Groh
CEO, Landhut Design Group

Hi and welcome to this presentation of Landhut Design Group's second quarter 2024. My name is Susanna Hilles-Groh and I am the CEO and CEO of Landhut Design Group. And on my side I have Jesper Langebro from Nye CFO.

speaker
Jesper Langebro
CEO of the concern

Thank you Susanna. My name is Jesper Langebro and I have been here for a little over a month and I look forward to being Susanna's horse in the future.

speaker
Susanna Hilles-Groh
CEO, Landhut Design Group

Great. And then we go into the first picture that presents the short concern here. You who follow us know who we are. We work in the furniture industry, design furniture, 280 units. We work with two business areas and the warehouse. If we go on to the first half year in 2024, we can only see that we have both a very weak quarter and also half a year behind us with a result that we are really not satisfied with in any way. At the same time, we see that we do a lot outside the business for both result improvement and growth forward. These activities and initiatives and measures really cover all parts of the business. And here on the picture you see examples of what we are addressing. It is both the revenue side with revenue from sales that makes us relevant to the customers. The cost side, both OPEC but also the way to work and buy in and to work. We are aiming at marginal improvements that we have already seen in the last quarter. We work hard on working capital, supply chain production. We look at the organization, we deal with the question of digitization and with direct efforts with the customer in focus. And we also look at how we present ourselves on the market. With these words, I want to say that we follow the plan that we have set up to aim at a result improvement in 2025 and then create the conditions to achieve our goals by 2026. And then the question is what happens in the business when we say that a lot is happening and maybe not so much is seen in the numbers yet. Then we give here some examples of the larger questions that we address and that we have passed or are ongoing. We went out with a decrease in the production capacity of the agricultural furniture for an adjustment to the sales rate today. We did that here during the spring after Q1. We also now notice that we have finally a complete concern team in place per June when Jesper started June 1. This means that Beatrice Gottenhendriksson, who started in February as CSO within the concern, as I said, came in here during the first half of the year. Beatrice has also got a double role here during the June month, which you have probably seen in the press releases. She goes in as the temporary CEO of the agricultural furniture. We have Heidi Nist on the spot, who started in March, comes almost from Vitra and is now more CEO of Furaform in Norway. And we have Jesper who was presented here in the presentation, who started June 1 as the CEO of the concern. So with that we feel quite complete and feel that we can move forward with a focus on the improvements and changes that we have addressed and address. We also have here during the June month, a second part of the agricultural furniture was completed. And because of that, we have also mentioned Mathias Ekvall, who is the interim CEO of Namhull. We are working on effectiveness in production, lean here, and production administration effectiveness with the help of the software Imos and Ragnar. These measures are ongoing and have come a long way. The goal is to create significantly more production capacity for future investments. We have also carried out a branding strategy project on Ragnar, which we have been doing since last fall. And it creates the conditions for Ragnar to improve its position as a premium brand in the international premium market. We are also working on targeted efforts in digitalization, where we have the customer in focus all the time. It is an area that we unfortunately are a little behind on and feel that we need to get to the top of it in a short time. We are working on the relevant, easy to access and fast-firing when we are in the sales process towards customers who are then both sellers and architects. We will work with Pecon, we are working with Revit files and we, as I said, improve the effectiveness in the preparations with the help of Imos and Ragnar. And this is all the efforts that will support us on our way towards increased availability, effectiveness and sales. We are also working on a business system piece at the library, in the business department library. And it is then linked very much to the internal effectiveness that will benefit the customer. And apart from these measures, which are a little more inward-looking, which are given behind the scenes, but which create the requirements for growth and improvement in the future, we have seen in many contexts, both at fairs and various events out in the world. It has been very heavy half a year here when it comes to marketing, we see that on the cost side, but it is something that must be handled with the measures we make on the effectiveness side. And with that I leave the floor to Jesper to come in on some numbers.

speaker
Jesper Langebro
CEO of the concern

Yes, I will take you through this journey. As Susanna mentioned, we have a result, or rather a turnover, which is a little lower than the previous year. We reached 212 million on the entire concern, down 8%. And if we look at the different business areas, it is divided into 151 million for office and 61 million for library. Where we have unfortunately a slightly larger reduction in library than what we had seen before. And it is a trend we see in the library that it takes a little longer to get the orders we are out there working with. We already saw that in Q1 and it has continued in Q2. However, in the office where the reduction is not as large, it is the same pattern from Q1 that almost the entire reduction is in the library and especially in the Swedish market. In Q1 there was a big drop from Q4 the year before. We do not see the same pattern and if you look at the diagram you will see that Q2 is in line with Q1. And it is a good sign, but it is at least that the reduction we have seen has not been as drastic as in Q1. If we go further in the presentation and look at the order, there is also a reduction. It is an increase of 241 million, a reduction of almost 3%. However, here we see a small turn for Office, which realizes an increase of 4% to 162 million. And it is abstract, which is going very well in the last few months. And again, Landshut furniture, which has a weaker development. On the library, which we also mention at the order, there is a slower pace, a certain doubt on the market, which makes the decision take longer and what we register as orders. And there we reduce by 14% units. And again, we work on these questions and look forward to working with more orders during the next quarter. If we look at the order log, for Office it is also an increase, just like the order entry, and goes up to 120 million. And for the library, we have this reduction we are talking about, even at the quarter exit, and we are up to 69 million. All in all, a development that we are not really happy with. If we move on to the result, we unfortunately end up with minus 13.6 million. It is in line with the same quarter last year, but of course in no way something we are happy with. If we are to highlight a few things, it is actually that the brutto margin is improving. And if we look at Office, we have an increase of .2% units, which we are very happy with, because it gives us a good place to stand when we work to increase sales. And of course, it is the volume loss that affects us the most. And the result is that we reach 9.3 million minus for Office. A small improvement compared to the previous quarter. If we look at the library, we have a small improvement on the brutto margin, but the library has had a tougher sales quarter, a greater reduction, and unfortunately it takes them just below zero in yesterday's result. If we move on, we come to the cash flow. And it is not something we are really happy with, to be honest. It is divided into three parts, you could say. And what about the running business? When we have a bad result, it also gives a negative cash flow from the running business. It is basically the result and a little less supplier debt that affects us. A little better than the same quarter last year, but it is still not something we are happy with. When it comes to the investment activity, we have not had as big investments as last year. It is mainly an installation of solar cells on the shaft, which stands for the large parts. And when it comes to the financial activity, we have continued to make the amortization that we will do on our bank loans and had the share of the shares during the second quarter, which are the major factors that affect us. All in all, it leads to a cash flow of minus 41 million. Looking at the numbers historically, we believe that we are starting to get out of the situation after Q2. We are working to focus on our liquidity and other assets, such as the movement of capital and the like, to ensure a better cash flow during the second half of the year. To summarize the quarter, we have a negative growth of minus 8%. We have an improved gross margin of .3% in offices and a little less in libraries. When it comes to the growth margin, we have the positive gross margin with us, we have a little lower cost, but the loss in sales affects too much and we end up with minus .4% in the growth margin. The net margin after financial posts and taxes is minus 7.5%, a little worse than the same period last year, and also negative figures on the transfer, minus 10% of capital and minus 6% of the capital. Not so big changes compared to the previous quarter. To summarize the first half of the year, we had a low order already in Q4 last year, which we knew, but we knew that the sales in Q1 would be weakened and when we had the same lower order input in Q1, the sales in Q2 had also been affected. So all in all, we have a sales that is 14% lower during the first half of the year and as mentioned, some price increases and other improvements in the supply chain have led to the gross margin not only increasing in Q2, but throughout the first half of the year and increase by 1.7%. The positive gross margin, as I mentioned in Q2, was also affected by a negative volume effect and also to a certain extent increased costs, which led us to a negative gross margin of 5.5%. And again, a little worse net margin of minus .6% and the transfer of both capital and capital is also negative. I think that was the last page on the financial side.

speaker
Susanna Hilles-Groh
CEO, Landhut Design Group

And then we are at a conclusion, we are happy to have a low order input and at the same time a heavy cost quarter, which results in a result that we are absolutely not satisfied with. But we also want to make sure that we do a lot of operational work for both the results and growth forward. The gross margin is also further strengthened in this quarter, which we are happy for and it also creates the conditions for a reduction effect forward when the sales go up. We note higher order input within the business sector, which we are happy for. We have one of the organizational improvements, or changes I would say, we have three people in place here during the second half of the year. Jesper's new CEO Beatriz, who is the head of the company, on the household furniture company, combined with her role as CSO in the company, and Mattias Ekberg, who focuses fully on the sales of household furniture, where we also, as Jesper said, have been suffering a lot in recent times when it is actually the household furniture that is the biggest deviation in sales. We are working on a balance between gas and brake in a still weak market and we are focusing on the measures that we can affect. And we feel that the changes in activities and initiatives that we do in line with our plan they lead to a result improvement that we definitely look at by 2025 and we also want to create conditions to achieve our goals in 2026 in line with what we have communicated earlier. And we are committed to our ambitions of -10% marginally in 2026. And so I think we are at the end of the presentation and open up for questions. Thank you. No, there seems to be no questions. Then we end here with the presentation of the second quarter of 2024 and thank you for your interest and attention and wish you all a happy semester and summer. Thank you for your attention and see you next time. Thank

speaker
Jesper

you.

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