Lammhults Design Group AB (publ)

Welcome to the presentation of the Lambhuls Design Group for the fourth quarter of 2024 and the whole year. My name is Susanna Hilles-Govio, I am the CEO and CEO of the company and on my side I have Jesper Langebro, the CFO.

Good morning everyone.

Then we start the presentation with a summary of the fourth quarter and we state that we end the year in the underlying business in a strong way, despite the fact that we are still in a rather weak market. We have a adjusted trade result in the quarter, which increased by 64% to 22.9 million compared to the corresponding period last year. The adjusted EBIT margin thus increased by .8% and the corresponding period last year was 5.4. The adjusted BRUTO margin increased by .6% to .5% and we see a positive development for both the resumption of orders and the quarter. At the same time, we have an order stock when we leave the period, which is 14% higher than what we saw at the beginning of the previous year. We also note that both the business area Library Interiors and Office Interiors are closed in the quarter. At the same time, as we communicated during Q3, we are charging the quarter with restructuring costs related to the initiated return program. And in parallel with the overview that we have made of the entire concern, we also write down the surplus that is related to Goodwill and stock. The total result impact in the quarter for these measures is 92.6 million kronor, each of 3.3 million is cash flow impact. We will come back to these measures in the guest presentation when we go into the numbers a little closer. If we look at the business perspective of what we have worked with during the fourth quarter, we can see that the quarter was characterized internally by an intensive work with the initiated return program, which we reported in Q3. In the business perspective, we saw two of our retail stores abstract and Ragnas, which was the big Orgatek store in Cologne, together with over 700 other exhibitors from 40 countries. It was an important platform for us to show our products and readings. Ragnas was able to bring in this presentation with a new brand platform in collaboration with Orgatek and new products from prestigious projects both at home and abroad. Forra Form launched its big bid last year. Here in November we received a prize, the Lesstarnas prize, in the design magazine Bodo Bädre in Norway, which we are very happy about. We are very happy about this, because it was the Lesstarnas prize, because this is a product that is accepted by the contract market. When it comes to the digital side of the work, we have continued to work on the implementation of a new business system in the business area Library Interiors. This is for the effectiveness of our processes. When it comes to the customer journey of the digitalization approach that we are working on, we have continued with both the implementation of Pecon, Revit File, Imos for better internal management, but also, for example, an introduction of a digital platform that we will use both internally and externally, and which will have a strong support in the sales process. We have also initiated product training on the brand limits during the fourth quarter, and we are preparing ourselves for a successive transition to the national organization within the sales function for increased efficiency and synergy, as well as better relevance in the customer journey by offering complete solutions rather than individual products from individual brands. Everything with the customer in focus. We have also previously told you that we have the intention of doing some co-operation. One of these measures is the co-ordination of the market function, which was realized during the quarter through the recruitment of Joakim Spjut in the role as a business area marketing manager within Office Interiors. It is an important step forward to be able to carry out the measures that we have communicated earlier. And so I was going to leave the business itself, and then we come to some numbers, 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 mainly be about Q4. And if we start with the transition, we have a careful increase during the quarter. We have stabilized the rolling 12 sales as you can see in the diagram and stopped the decline we have had, unfortunately, successive quarters over quarters. And yes, it feels very good that we are not on our way down. With that said, we can not say that we really take the market with us, but we work with our own efforts. Take market shares and be relevant to the market. Both Office and Library increase their turnover by about 1%. And some markets that stand out for Office, it is mainly in Sweden that we have had an increase compared to the previous year, Norway a little bit down. What is worth mentioning is that from a product perspective, we see a continued positive trend for abstract pods, or what is sometimes called silent rooms. And it is in principle on all markets, including Norway, which is in total going down a little bit. And within the Library, it is the big markets, France and the UK, that show an increase. And the slightly smaller markets, relatively speaking, like Sweden and Belgium, can fluctuate from quarter to quarter, and so we have it in the fourth quarter. But all in all, the decline has stopped and we have a weak increase. If we look a little further at the annual income, we actually have an increase in the whole, and went up to 279 million in the quarter. In terms of the last 12 months, we have actually two quarters back, all in all with 4%. And that can be a bit nice to say, because we do not have so many quarters behind us of turnover, but we have at least the annual income that says a little bit about the quarter that is coming. What is also positive is that the order stock has increased by 26 million in the quarter, which gives us a certain confidence in the first quarter, 25. The order income is a bit more spread out, Office is a bit down on the order income with 3%, but also Office order stock is up with 10% before Q1. Library, on the other hand, had a really strong order income during the quarter, up with 23%, which also results in an order stock that has increased by 22%. Even if the order income was a bit

between business, we have a strong order stock.

If we talk about some kind of bottom line during the quarter, Susanna mentioned that we have started our recovery program, and we have taken over the cost of restructuring, 36.6 million during the quarter. However, only 3.3 million of those who have had an impact on the cash flow. The largest posts in the recovery program are a description of component layers on some of the factories as part of a sortiment process. It has also resulted in the writing down of some selective product development projects as part of the sortiment process that has been done. And also some writing down of machines and inventories linked to providers, in principle, the management of unused machines. Parallel to this work, we have also seen some progress in both

business sectors. We have also seen some improvement tests.

The library has managed to do this, and we have been forced to do some writing down. We strongly believe in our plans, but to be honest, we have had some bad track record historically. And it is the sum of several factors that makes us take a total of 56 million on both Goodwill and the brand. And all in all, together with the recovery program, we have compared the largest number of postings in the quarter in 93. However, adjusted for these, we have a really strong quarter. We are doing, as Susanna said earlier, a moving result of almost 23 million. Almost 9% adjusted margin. However, it should be said, as you can see on the diagram and you who follow us, that the fourth quarter is a strong quarter for us historically. We may not expect the same numbers in the first quarter of 2025, but a combination of a strong year and good underlying development, we believe, has begun. If we go into the individual business areas, we have a positive result on FIS, almost 6 million. And it is a mixture of a stable turnover, better brutto margin, and we have seen that the growth in the quarter comes both from selective price increases and improvements in the production organization, as well as the cost focus that has helped us in various parts of our upheaval or cost, which has helped us reach a positive result. If we look at the library, we can just say that it is a significant improvement, 17.4 million in the quarter, which corresponds to 19% adjusted margin. I believe that the journey has just begun. We have good underlying impact from marginal improvements, and we continue to make investments to penetrate our main markets even more. We go on and end up on the cash flow analysis. We show a little more of the cash flow, and that is because a lot has happened this quarter. And you see that we have a very negative result, including all the restructuring effects. We have a very positive effect from those that are not cash flowed, given that there are downsides. All in all, from the current business, we have a positive impact with 46 million, which has its foundation in a strong underlying movement result and improvements within the movement capital, especially the warehouse. And then I mean adjusted for the downsides that have been made. So a good development in the current business. When we look further on the investment side, we have completed a conversion of property in the Danish business of the library and various different investments, connections to the new development of products in our factories. We are working on the digital side, and also the library is in the final stages of a relatively large shift in the business system. And within the framework of immaterial access, we also have activation of product development, which we have every quarter and year. All in all, a little lower investments than last year. And these two posts, plus an adjustment of leasing amortization, as it is called in the EUFRS language, these leasing amortizations are actually rentals. So we choose to have a definition of free cash flows, including leasing, which in a good way reflects 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 has strengthened liquidity during the quarter, and we enter the first quarter with a stronger financial and liquidity. All in all, some key figures I want to focus on. No strong growth, but we have stopped the decline in turnover. We have a really strong adjusted margin of movement during the quarter, which partly comes from a strong adjusted margin of growth. A mixture of efficiencies and selective price increases. We have a slightly weakened solidity, which is the result of the declines that are made, but still at a more than okay level. The net debt has not increased by any means, that is to say, there has not been a cash effect from the results, the effect we have had of declines in the quarter. And finally, our overview of the organization continues. In the beginning of the year we were 300 employees in average, we were 285 and in the end of the year we were 281. A continued adjustment and adaptation in the organization.

Yes, and then we have gone through the numbers and please summarize the quarter again. We have concluded, as we have mentioned here a few times, in a strong way in the fourth quarter in the underlying business. We see a adjusted growth result that increases by 64% in the 22.9 million in the quarter, which gives an EBIT margin adjusted so to 8.8%. We see a positive development both in turnover, gross margin and order input. And we go out from the period with a order stock that is higher, with 14% than the previous period, that is, the outcome of 2023. Both the business area and the industries perform well and we continue to work with the improvement needs in critical areas that are initiated in the context of the recovery program. And we unfortunately do not expect any special support from the market this year. We do not see any strong signals or hardly any signals at all on a rise in the market in general. From a good perspective, however, we focus on what is in our own hands and that we can affect ourselves. We see a long list of possible measures and adjustments that can help us strengthen our position. As we have said several times earlier, we expect the effects of the collected returns in the future. We strive for a desired position in 2026 in line with our financial goals of -10% EBIT margin. And that is what we had from our side so far. Thank you very much and then we open up for questions. And then we get some questions here.

Yes, we have a question about adjusted movement results. The whole year 4.1 million SEK. A goal of -10% EBIT margin. We will see here. Where will the remaining improvement result come from to achieve our goal after the saving program? Okay, here is the question. If we are to reach -10% EBIT margin, we must be up by around 8 with a turnover of around

1 billion. We do -10% EBIT margin. We do -10% EBIT margin. We do -10% EBIT

margin. We continue to make improvements in purchase. We believe that we have good plans to be able to increase turnover both with the market and a little better than the market. So it is probably a mixture of continued effectiveness initiatives, marginal improvements and a careful approach to turnover. That will take us all the way to 80. We have another question. Commentary on the marginal development in the library. Most of this is permanent. What margins can we expect from the library in the future? I would respond in the following way. As I said, Q4 is a strong quarter for both library and office. The advantage with library is that we do not really have our own production, but everything is sourced effectively. This means that we are less sensitive to volume ups and downs. So the margin is permanent in the library. That is our evaluation of the situation. Another question from the distribution panel. How has the board responded? There has been a good discussion in the board. The board, which also has the board's backing, think that we should be a distributed company. With the strong ending we have on the year, which we do not think is a one-off, with both strong liquidity and a good underlying business, there is trust in the company and management's forecasts and plans. As with all boards, there is a discussion. Nothing is clear, but with determination the board has recommended this distribution proposal. We have another question from the small country post. How does the distribution program affect the abstract and land use furniture when it comes to the number of employees? We write in the communication that we are not completely finished with the distribution program, so we should not promise that it will not happen again. We are comfortable with the parts we have initiated. We should not promise one or the other. Our plan is to initiate the last parts during the first half of the year. Then the communication about the initiative will be waited for.

Yes. Are there more questions? Are those the questions we see from our side? Yes. It does not seem to flow into any more questions, as we see. Maybe

it's a little while more. Maybe you are thinking about more questions.

As we are in the break here, while we wait for any questions, we are understated that we do not see any greater growth in the market. We do a lot of measures that we can influence ourselves. We work a lot with different measures and initiatives that have cooperation across the products and companies. Some of what we mentioned also affects the results. The next step is this initiative, which is a little difficult to put numbers on, but which we see to make the business more effective and more possible. Which places are there and relevant to the customer? We have the customer in focus and our financial goals. That is the starting point for the work we do together in a very good way in the whole concern team and the whole group. We do not see any more questions. Should we make the final decision? I think we should. We will hopefully answer the questions that are there, otherwise we will be available afterwards. I am not sure if anyone knows about this. We would also like to remind you that we participate in Stock Week. You who are either in Sweden or live here are very welcome to visit our showroom. There is also an app that you can download and plan. We would like to invite visitors who want to see what we offer. I would say that we will end for today.

Thank you for

your attention.