Lammhults Design Group AB (publ)

Välkomna till presentationskommuniken för Lammhus Design Group för det fjärde kvartalet 2024 och hela året. Mitt namn är Susanna Hillerskog, jag är vd och koncernchef i koncernen och vid min sida har jag Jesper Langebro som är CFO.

Godmorgon alla.

Då börjar vi presentationen med en sammanfattning av det fjärde kvartalet och vi konstaterar att vi end the year in the underlying business in a strong way, despite the fact that we are still in a fairly weak market. We have a adjusted sales result in the quarter, which is 64% to 22.9 million, compared to the corresponding period last year. The adjusted The EBIT margin goes up to 8.8% and the corresponding period last year was 5.4%. The reinvested gross margin is 1.6% to 37.5%. And we see a positive development for both revenue, ordering and the quarter, and at the same time we have an order stock when we leave the period that is 14% higher than what we saw at the beginning of the previous year. And we also note that both the business area Library Interiors and Office Interiors ends in the quarter. At the same time as we communicated under Q3, we load the quarter with the cost of restructuring, which is related to the initiated grant program. And in parallel with the overview that we have done of the entire group, we also write down The overall value is related to Goodwill and goods. The total result impact in the quarter for these measures amounts to 92.6 million kronor, each of 3.3 million is cash flow impact and we will come closer back to these measures during Jesper's presentation when we get closer to the figures. If we look at From the perspective of the company, what we have worked with during the fourth quarter, we can state that the quarter was influenced internally by an intensive work with the initiated proposal program, which we then reported on in the Q3 report. Outside the company, we saw two of our business areas, or the brands Abstrakta and Ragnas, stand out at the Stora Orgatec Mestan in Cologne. together with over 700 other exhibitors from 40 countries, so it was an important platform for us to show our products and solutions. Ragnas agreed, in connection with Orgatech, that together with new products that come from prestige-filled projects, both at home and abroad, to include this presentation with a new brand platform. Fora Form was launched in Storbad last year. In November, we received a prize, which is the prize of the readers, in the design magazine Blåbädre in Norway, which we are very happy about, given that it was the prize of the readers, given that this is a product that has been developed for the contract market. And when it comes to the digital side of the work, we have then worked with continued implementation of a new business system within the business area Library Interiors. And this is for the effectiveness of our processes. And when it comes to the customer journey and the digitalization approach that we are moving towards, we have continued with both the implementation of Picon, Revitfile, Emos for better internal handling. but also, for example, an introduction of a digital platform that we will use both internally and externally, and which will be a strong support in the sales process. We have also initiated product training on goods and brand limits during the fourth quarter, and we prepared ourselves for a successive transition to national organizations within the sales function for increased efficiency. and synergy, as well as good and relevant customer service by offering solutions, complete solutions rather than individual products from individual brands. Everything with the customer in focus. And we have also previously mentioned that we intend to do some co-operation and one of these measures is co-ordination of the marketing function. which was carried out during the quarter through the recruitment of Joakim Spjut in the role as Business Area Marketing Director within Office Interiors. And it is an important commitment for us to be able to carry out precisely the measures that we have communicated earlier. And with that, I was going to leave the business itself and then we will come to a few figures and then I will hand over to Jesper.

Thank you very much Susanna. You who follow us know that we had a tough first half year. The presentation here will primarily be about Q4. And if we start with the turnover, we have a careful increase during the quarter. Vi har stabiliserat den rullande 12-försäljningen som ni kan se i diagrammet och stoppat den nedgång som vi har haft, tyvärr, successivt kvartal över kvartal. Det känns väldigt bra i alla fall att vi inte är på väg nedåt. Med det sagt så kan vi inte säga att vi riktigt har marknaden med oss utan vi arbetar med våra egna insatser. Ta marknadsandelar och vara aktuella på marknaden. Both Office and Library have increased their turnover by about 1%. And there are some markets that stand out. For Office, it is mainly in Sweden that we have had an increase compared to previous years. Norway is a little bit down. What is worth mentioning is that from a product perspective, we see a continuous positive trend for abstract pods, or what is sometimes called silent rooms. And that is in principle on all markets, including in Norway, which in total goes down a little bit. And within LIBRARY, it is the big markets, France and the UK, that show an uptrend. And the slightly smaller markets, relatively speaking, such as Sweden and Belgium, can fluctuate from quarter to quarter, and we have that in the fourth quarter. But all in all, a stable decline has been stopped, and we have a weak increase. If we look a little further at the order entry, we actually have an increase on the whole and went up to 279 million in the quarter. From a 12 or last 12 month perspective, we are actually two quarters back, all in all with 4%. Och det kan ju vara lite grann skönt att säga därför att vi har ju inte så många kvartal bakom oss av omsättningsökning men vi har i alla fall på orderingången som säger lite grann kanske om kvartalen som kommer. What is also positive is that the order stock has increased by 26 million in the quarter, which gives us a certain prospect for the first quarter of 2025. It's a bit of a spread of the order entry. Office is a bit lower on the order entry with 3%, but also Office order stock is up with 10% before Q1. Library, on the other hand, had a really strong order entry during the quarter, up by 23%, which also results in an order stock that has increased by 22%. So even if the order entry was a bit between business, we have a...

In comparison, we have a strong order stock.

Let's talk about some kind of bottom line during the quarter. Susanna mentioned that we have started our recovery program and we have taken restructuring costs 36.6 million under the quarter. However, only 3.3 million of these have had an impact on the cash flow. The largest positions in the recovery program are the writing down of component layers on some of the factories, som en del av ett sortimentsgenomgång. Det har också resulterat i nedskrivning av några selektiva produktutvecklingsprojekt som en del av den sortimentsgenomgång som har gjorts. And also a few descriptions of machines and inventories connected to projects. In principle, the expansion of non-used machines. In parallel with this work, we also have a transition of our superpowers in both business areas.

so-called impairment tests.

The library has been able to do this, we have been forced to do downloads. We believe strongly in our plans in the future, but to be honest, we have had a bad track record historically. And it's the sum of several factors that makes us take a record of a total of 56 million on both Goodwill and the brand. And all in all, together, In the measures program, we have a comparison of larger and larger positions in the quarter of 1993. However, adjusted for these, we have a really strong quarter. As Susanna said earlier, we make a moving result of almost 23 million. with an almost 9% adjusted margin. However, as you can see from the diagram, the fourth quarter is a strong quarter for us historically. We may not expect the same figures before the first quarter of 2025, but a combination of a strong year. och bra underliggande utveckling så tror vi ändå på en när resan framåt har påbörjats. If we look at the individual business areas, we have a positive result in Office, almost 6 million. It is a mix of a stable turnover, better gross margin, both from selective price increases and improvements in the production organization. as well as cost focus, which has helped us in different parts of our OPEX or remittances, which has helped us to reach a positive result. If we look at the library, we can just say that it is a significant improvement 17.4 million i kvartalet som motsvarar 19 procents justerad rörelsemarginal. Jag tror att den resan har bara börjat. Vi har bra underliggande påverkan från marginalförbättringar och vi fortsätter att göra satsningar för att penetrera våra huvudmarknader ännu mer. We move on and get to the cash flow analysis. We show a little more of the cash flow. That's because a lot has happened this quarter. You can see that we have... A very negative result, including all the restructuring effects. We have a very positive effect from something that is not the cash flow effect, since there are declines. All in all, from the ongoing business, we have a positive impact with 46 million. which has its basis in a strong underlying movement result and improvements in the movement capital, especially the storage. And I mean adjusted for the declines that have been made. So a good development in the ongoing business. When we look further at the investment side, we have completed a reconstruction of property in the Danish business of library and various different investments related to the new development of products in our We also work on the digital side, where also the library is in the final phase of a relatively large shift of business systems. And within the framework of immaterial access, we also have the activation of product development that we have every quarter and year. All in all, a little lower investments than the previous year. These two positions, plus an adjustment of leasing amortization, as it is called in IFRS language. These leasing amortizations are actually rents, so we choose to have a definition of free cash flow, including leasing, which In a good way reflect the total underlying business, including investments. And there we land in the quarter on a really strong cash flow, 33.5 million. Up 50% from the previous year and with 11 million. Something that is strong for liquidity during the quarter. And we enter the first quarter with a stronger financial and liquidity position. All in all, a few key words I want to focus on. No strong growth, but we have stopped the decline in turnover. We have a really strong, adjusted turnover margin during the quarter, which partly comes from a strong, adjusted gross margin. A mixture of efficiencies and selective price increases. Vi har en lite försvagad soliditet med resultat av nedskrivningar som görs men fortfarande på en mer än okej nivå. Nettoskulden har inte ökat nämndvärt, det vill säga det har inte varit kassapåverkan från våra resultat, påverkan vi har haft av nedskrivningar i kvartalet och slutligen vår översyn över organisationen fortsätter. I början på året var vi 300 We were 285 employees in the medium term, and we ended the year at 281. A continuous adjustment and adjustment in the organization.

Yes, and then we have gone through the figures and would like to summarize the quarter again. We conclude, as we have mentioned here a few times, in a strong way in the fourth quarter in the underlying business. We see a adjusted return result that amounts to 64% in 22.9 million in the quarter, which gives an EBIT margin adjusted to 8.8%. We see a positive development both in revenue, gross margin and order entry. And we go out of the period with a rate that is higher, with 14% than the previous period, i.e. the start of 2023. Both business areas and areas performed well, and we continue to work with the needs for improvement in the critical areas that were initiated in connection with the recovery program. Unfortunately, we do not expect any special help from the market this year. We see no strong signals or hardly any signals at all on an increase in the market in general. From our perspective, on the other hand, we focus on what is in our own hands and that we ourselves can influence. That is, we see a long list of possible measures and adjustments that can help us strengthen our position. And as we have said a few times before, we expect the effects of the collected measures forward and we strive for a desired position in 2026 in line with our financial goals of 8-10% EBIT margin. And that's what we had from our side so far and then we open up for questions.

Yes.

And then we get some questions in here.

Yes, we have a question about adjusted movement results. All year round, 4.1 million kronor. A target of 8 to 10 percent movement margin. Let's see here. Where do the remaining improvement results come from to reach our goal after the savings program? Okay, so here's the question. If we are to reach 80% of the operating margin, we have to go up by around 8% with a turnover of around 1 billion. We believe that we have good plans to be able to increase the turnover. både med marknaden och lite bättre än marknaden. Så det är nog en blandning av fortsatta effektivitetsinitiativ, marginalförbättringar och en försiktig uppgång i omsättningen som kommer att ta oss hela vägen till de åtta. Vi har en annan fråga. Kommentar. Bra marginalutveckling i library. Till en stor del av detta är bestående. Vilka marginaler kan vi förvänta oss från library framöver? Jag skulle svara det på följande sätt. Som jag sa, Q4 är ett starkt kvartal för både library och office. Fördelen med library är att vi har egentligen ingen egen produktion utan allting sourcas effektivt och det innebär att vi är mindre känsliga för volym upp och ned i gångar. Så marginalen är bestående i library. Det är vår värdering av situationen. än från utdelningsbeslaget. Hur har styrelsen resonerat? Det har varit en bra diskussion i styrelsen. Styrelsen... which also has the leadership backing, think that we should be a sharing company. And with the strong conclusion we have this year, which we do not think is a one-off, with both strong liquidity and a good underlying business, there is confidence in the company and the leadership's forecasts and plans in the future. Så med alla styrelser så först en diskussion då, ingenting är självklart men med bestämdhet så har styrelsen rekommenderat det här utdelningsförslaget. Vi har en fortsatt fråga som kommer från Smålandsposten. Den lyder så här. Hur påverkar åtgärdsprogrammet abstrakta och landbruksmöbel- -"när det gäller verksamhet och antalet anställda?" Vi skriver i kommunikeringen att vi inte är helt färdiga med åtgärdsprogrammet. Så vi ska inte utlova att det inte sker mera. Men vi är ganska komfortabla med de delarna vi har initierat. Och vi ska väl så att säga inte egentligen utlova varken det ena eller det andra. Men våra planer är ju att initiera de sista delarna under första halvåret. Och då får kommunikationen kring de initiativen, får vi vänta med helt enkelt.

Yes. Are there more questions? Those are the questions we see from our side, right? It doesn't seem to flow into any more questions, as we see.

Maybe it's a little while more.

You may be wondering about further questions. Exactly. Som vi i pausen här, medan vi väntar på eventuella frågor, vi vill som sagt understryka att vi ser inte direkt någon större ökning i marknaden, men vi gör väldigt mycket av åtgärder som vi kan påverka själva. Och vi arbetar väldigt mycket av olika åtgärder och initiativ som har samarbete över varumärkes- och bolagsgränserna. So part of what we mentioned as well, we expect to affect the results forward, it is precisely these initiatives that are a little difficult to put numbers on, but that we see to make the business more effective and more possible, which is more close and relevant to the customer. So we have, as I said, the customer in focus and our financial goals. Det är väl det som är utgångspunkten för det arbetet som vi gör tillsammans på ett väldigt bra sätt i hela koncernteamet och hela gruppen. Ser vi faktiskt inga fler frågor? Ska vi dra den slutsatsen Jesper? Jag tycker vi gör. Vi har förhoppningsvis de frågorna som finns annars är vi alltid tillgängliga även efteråt om det är så att någon... någon känner för det och vi vill också gärna påminna om att vi deltar i Stock Week och ni som är antingen på väg till stan eller bor här är hjärtligt välkomna att besöka vårt showroom. Det finns också en app som man kan ladda ner och planera och välja emot besökare som vill titta på vad vi har att erbjuda. Och därmed skulle jag vilja säga att vi Absoluta för idag. Tack för uppmärksamheten.