Lammhults Design Group AB (publ)

Hej och hjärtligt välkomna till denna presentation för det tredje kvartalet 2025 för Lammhults Design Group. Mitt namn är Susanna Hilleskog och jag är vd och koncernchef i Lammhults Design Group och vid min sida har jag Jesper Langebro, jag är CFO för företaget. Just det. Då går vi rakt in på presentationen och vi sammanfattar det tredje kvartalet. to deliver strong gross margin and results improvement in a continuously weak market situation. We see an order intake that decreases compared to the third quarter of 2024, which reflects the continuously weak market that we have mentioned earlier. We see moving customer projects and waiting for decision-making in customer leads. And this happens despite the high activity on the market from our side. And as I said, something that we have to relate to. The order volume at the end of the period was slightly lower than at the corresponding time last year. And sales at the same time during the quarter increased by 8.9%, with a strong delivery from both business areas, office interiors and library interiors, which is exciting. We see the adjusted gross margin increase with 1.1% to 37.3% and the whole results in a adjusted turnover result that improves with 2.5 million kronor and goes up to 6.9 million kronor per quarter. If we start by mentioning some short words from the business perspective, we see that Library Interiors continues to deliver steadily with higher sales, stronger gross margin and improved sales results. Office Interiors continues its journey of change, unchanged, with the same focus and pace. With higher sales, improved and adjusted results, also here. The OTS program is fast-growing. We contribute to a gradual improvement in results, despite the challenging market that I mentioned initially. We also see that the collaboration over the company's business area boundaries creates synergies and increased customer value, and it feels more and more natural for every day that goes with this collaboration, which creates many new opportunities in the future. When it comes to our move, we mentioned on our website, in our brand promise and brand story, that we are moving towards a more unified Lammhus Design Group. We are talking about Scandinavian Design Multiplied, where we focus on creating synergies and opportunities with all the offers that we have in our portfolio. And that is something that we still believe in very strongly. We mentioned earlier in the presentation that we have implemented a new go-to-market model in Norway and it is also implemented in Sweden and we continue to see very positive results from this new business model. During the quarter, we have implemented updates to our existing showrooms in Oslo and Copenhagen and we have moved into a completely new showroom at a new address in Stockholm. And these showrooms, which are an important meeting place and an important part of our sales process, also underline the new way of working that we have, where we deliver holistic solutions rather than products, where we offer our entire portfolio. The digitalization journey continues in this quarter. We have a new business system in Library Interiors that is in place. And we have ongoing projects with the customer journey in focus in Office Interiors. And as we mentioned earlier, we are building an organization for the future. And our ambition and goal is to reach an EBIT margin of 8-10%. That is the goal. finns fortfarande i vår ambition och plan oförändrat. Jag nämnde showrooms. Viktig mätesplats. Väldigt viktigt forum för våra kunder och samarbetspartners att mötas och skapa affärer. Här visar vi lite smakprov från våra tre showrooms. Vi har till vänster högt upp vårt showroom i Köpenhamn. Efter uppdatering till höger Up and down, we see two pictures from our new Stockholm showroom. On the bottom picture, we also see the new digital support of the physical room, where we show the possibilities with our portfolio. As I said, the physical and the digital in harmony. To the left, we have our updated showroom in Oslo on Pilesträdet. An important event during the quarter was Designers Saturday in Oslo, which opened in September. And here we see a full house in our new showroom with customers and collaboration partners of all kinds. A very important meeting place and very fun to be able to show off this momentum that we feel we have on the Norwegian market with strong sales of all our four brands. David, let's move on to the figures in the report. I'll hand it over to Jesper.

Thank you, Susanna. As usual, we'll start with the order entry and the order block. As Susanna said earlier, we've had a slightly weaker order entry. It decreased by 15.5% compared to the same period last year. It went up to 165 million. The order stack, however, did not decrease as much, but we have had a good development on the order entry and order stack earlier, and we have also mentioned how it will be delivered and invoiced, and that is what has happened most of the time here under Q3, which we also see in the increase in turnover, which we will soon get into. But in short, per business area, we have a weaker order entry at Office and also with the order stack from those deliveries. It is mainly within Office. At Library, we also have a reduced order entry, but the order stack is on a satisfactory level and higher than the same period last year. So again, the net is a 6 million lower order stock before Q4. And that's really what we're going to relate to. On the diagram, we can see a little a curve that goes down, but we don't see it as a trend break, but it's a little hack in the curve here in Q3, which is a special quarter with semester months. And as I said, the order stock is almost on the same level as the previous year. If we then talk a little about the turnover, as I said, there was an increase of almost 9% during the year and our turnover went up to 205 million. It is an increase both in Office and in Library. And within Office it is actually now stable that Norway is our strongest market. Should we talk about the fact that the market may not be completely dampened, then it may be in Norway where we see signals to strength signs, while it is still weak in Sweden and Denmark. As for the library, it is a stable development, quarter after quarter, an increase in invoicing and shipping of installations and products. In LIBRARY, it can slightly change from market to market, which one is better or worse compared to previous years. But what is worth remembering is that France is our individual strongest and most important market when it comes to LIBRARY. If we talk about adjusted movement results, it went up to almost SEK 7 million, an improvement of SEK 2.5 million during the quarter. We are pleased with the increase in revenue and the development of our gross margin, an increase of 1.1% compared to last year. However, there are some effects during the quarter. We do not classify them as restructuring costs, but we have made extra investments on Showroom, on other market investments that have cost a little more than usual. And we have also had a periodizing effect on the joint venture we own, a library company in Norway. Vi uppskattade till kanske effekter på 2,5 miljoner som har påverkat resultatet under kvartalet. Igen, inte en omstrukturering men något av en engångshändelse som man ska komma ihåg. Så vi hade haft ett lite högre resultat annars. Vårt omstruktureringsprogram fortsätter och vi uppskattar dem till lite lägre det här kvartalet än föregående kvartal, runt 4 miljoner. Det hänger ihop med just att det är semestermånader så är det mindre aktivitet i allmänhet under det tredje kvartalet, vilket också gör att det finns mindre potential till vissa besparingar. And we already had relatively low costs last year in Q3, which is part of why we don't see the same increase and improvement as in previous quarters. But that doesn't stop us from believing that we have a good journey into Q4. Again, if we talk a little between the business areas, we have a small improvement on Office. And it is again both revenue and gross marginals despite these market investments. And in the library, we are increasing and reaching almost 8 million in adjusted turnover results and a good margin. And then it is still that we still have some, what shall we call them, after-implementation costs when it comes to ERP systems and so on. But on the whole, an improved, adjusted movement result with something we can call one-time effects of 2.5 million included in it. Kassaflödet är intressant. Vi har en förbättrad underliggande verksamhet och den vinsten tillsammans med 5 miljoner bättre utveckling på rörelseresultatet gör att vi har med oss nästan 12 miljoner från den löpande verksamheten. Our investments are not that big. It is ultimately about product development that is being activated and the implementation of the business system at the library, which has risen to 2.4 million under the quarter. And with those two positions, plus what we call amortization of leasing debt, we have a free cash flow of 6 million under the quarter. Which is almost 9-10 million better than the previous year. Which we are still quite pleased with. When we have the increase in sales during the quarter compared to Q2, we bind capital that we release during the fourth quarter. So the cash flow should look better then. In summary, from the financial point of view, some of the key figures. A good increase in revenue during the quarter and, as I said, expected, given that we have had a strong order book that we have now delivered. Skönt eller trevligt att få säga att rörelsemarginalen har ökat och att det i sin tur beror på delvis bruttomarginalen som har konstant under året utvecklats positivt. Soliditeten är något sämre än motsvarande period föregående år men det har att göra med att vi gjorde nedskrivningar i Q4 föregående år So when we get there, we don't have a comparative posture. As for the net debt, it is lower than the same period the previous year. And that basically has to do with the fact that we have a positive cash flow during the year. Then we have a division, but the underlying cash flow is positive. And when we then come to the number of employees, the average number in the group, we are almost on the same level as the previous quarter this year, 264 compared to 265. However, 30 people less than the same period last year. And it is mainly within the Office Interiors business area that we have implemented the plans that we have laid out and continue to work with in the action program. And with that I hand over to Susanna again.

Thank you Jesper. We are here with a summary and we deliver here the third quarter with an improved adjusted turnover result of 2.5 million kronor and thus up to 6.9 million kronor. And the improvement of the results is in both business areas. We see an increase in the adjusted gross margin with 1.1 percent unit. Sales increase in the quarter by 8.9% compared to the previous year. This occurs both in office interiors and library interiors. If we look at order inputs, we see a weaker order input as a result of a fairly dampened market, especially in the Swedish and Danish markets that Jesper mentioned here, while we have a strong momentum in Norway. Åtgärdsprogrammet fortsätter med oförändrad ambition och takt. Vi förändrar framför allt inom affärsområdet Office Interiors och vi samordnar över bolagsgränserna till en mer funktionsindelad struktur. Ressourcen har förstärkts i kvantalet inom design och produktutveckling samtidigt som vi har insatser för att skapa förutsättningar för en ökad inre effektivitet och en effektivitet i produktionsorganisationen. Och som vi har sagt tidigare, det här är inte ett läge som vi kan eller vill spara oss utifrån utan vi satsar We want to strengthen our market position in the face of a future market recovery, which we really hope will take place in the short term for the best of the industry. i allmänhet. Vår ambition och mål att både uppnå tillväxt och en ebit-marginal på 8-10% under 2026, den kvarstår, som vi har sagt tidigare. Därmed har vi väl kommit till slutet på i alla fall själva presentationsdragningen och då öppnar vi upp för frågor och svar. And then we see some questions pop in here. Ska vi försöka ta det här uppifrån ner, som vi ser det i alla fall. Då har vi en fråga, kan ni förklara lite om den ökande opväxten? Kom en fråga från en investerare.

Den kan jag försöka ta. Som vi säger så har vi gjort ett antal marknadssatsningar, framför allt i Office. Och det är ju både på design- och produktområdet, men också The showroom, we can call it the market area. There is an entry that describes bonuses to selected units that are going really well. There are also some effects in the library. As I said, the library is doing well with its EBIT, but there are also some investments that hit the quarter. As I mentioned, there are a few things about the one-time character. And then I also think that we were relativt lågt föregående år i just Q3 jämfört med de andra kvartalen. Så det blir lite oschysst jämförelse på det sättet. Vi ser inte att vi har tagit på oss några spenderbyxor. Vi håller fortfarande i pengarna och vi gör välutvalda beslut vad vi satsar på för någonting. Men som sagt, det kan komma sådana här kvartal då och då.

Satsningar kring showrooms sammanföll också med stora marknadsevent. Det gällde att vi levererade där och då. Det blev ju tredje kvartalet när det gäller både Stockholm showroomet och Oslo showroomet som är våra stora showrooms. Då går vi till nästa fråga som är från Olle. Då ligger frågan, ska man se den svaga orderingången som ett trendskift?

And the answer to that is that we don't think so. We're not going to say too much about how Q4 has started, but in general, Susanna describes how there is a little tendency on the market that some orders are shot up and some decisions are shot up. And we see it more as a hack in the curve, and it applies to both business areas. than the trend shift. We don't see the underlying business has worsened. It's a dampened market on the majority of the markets, but it's not worse than before.

Exactly. And with the investments we make, we also want to achieve a position where we become more relevant with our breadth of offer, which makes us more resistant even in a dampened market. So that All investments that are made go in this direction. So we see that there will be a certain compensation for this, even if the market will be weak.

We have a question from Jonathan. What is the background to moving forward the full implementation of the cost savings program from Q4 this year to Q1 2026? Det är så enkelt att dels tittar vi på om det finns fler möjligheter men också att några av de beslut och implementeringar vi vill införa eller genomföra har tagit lite längre tid. Det är också därför som ni ser ganska försiktiga justeringar. Det har varit en miljon varje kvartal medan vi har flaggat att det finns om jag kommer ihåg rätt, fyra till sju eller fyra till åtta miljoner kvar som vi uppskattar kostnaden att bli. Så det är egentligen att det har tagit lite längre tid än vad vi har velat.

Just det.

We have a question from Albin. Are all one-time costs adjusted for your approved, adjusted movement results? No, we have to be careful. We haven't really talked so much about one-time costs and restructuring adjustments, because it sounds like bad excuses. But the ones I mentioned at 2.5 million, it's not adjusted for that. because it has nothing to do with the restructuring program. We described it rather as events in the quarter that are a little extraordinary or one-off, and we would have had a underlying result that would have been a little higher without them. But they are not linked to the restructuring program. It is investments and other effects that came in this quarter.

Exactly. And then we have a similar question from Felix, perhaps.

Can you clarify a little about your joint venture in Norway? We have a 50-50 ownership in a sales company in Norway. And in short, we are exactly year-to-date with the share of the profit that we take in in our results. But there has been a small periodization error between Q2 and Q3. And when I mention the 2.5 million, it is not just Joint Venture. It is in total when we have mentioned some extra investments and costs we have had. But yes, if we were to adjust even for the one-time effects, we would be at 9.4 million in the result in the quarter instead. Torbjörn has a question here. Q4-24 was a significant reduction and reduction in structural measures. Hur mycket finns kvar av dessa avsättningar av reserver? Den frågan kan jag inte i huvudet, men jag kan väl säga så här att vad vi gjorde var att titta över produktsortiment och lager och liknande poster på tillgångarna och de skrev vi ner. And they are not something we expect to use, but it was an established need to make that kind of signature given our future plans. There were also inscriptions of trademarks and goodwill. And it's nothing that we get back either. So if I'm going to answer here and now, it's not that we're sitting on reserves that are going to be resolved, but the costs we took last year in Q4, those were costs we needed to take, quite simply. Johan from Smålandsposten. What measures do you have left to implement in your restructuring program? What do you expect to happen to the cost and number of employees? We can't go into that, and we will present that when we have decisions and implementation in front of us. I think we can just say that. Yes, exactly.

Målsättningen att uppnå våra finansiella mål kvarstår och då får vi hantera situationen därefter. Vi återkommer som sagt, Johan, när vi känner oss redo. Då har vi en fråga från Olle här. Vad är ni speciellt nöjda med i Q3? Finns det något som överraskat positivt operativt? When it comes to the financial aspect, as Jesper mentioned, we are very happy with the continued increase in the gross margin and that we have a continuous improvement in the adjusted turnover and sales. But if we look at it from an operational perspective, så är vi väldigt glada för den kraft vi ser i organisationen, den resan som vi gör där vi har med oss teamen som jobbar så hårt och är på något sätt med riktig pionjäsanda liksom trampar då nya stigar och skapa momentum i en tuff marknad och vi är oerhört glada. Kanske inte så överraskade för vi vet ju vad styrkan finns men vi är väldigt glada för den utveckling vi ser i Norge där vi får också bekräftelse på att den affärsmodell som vi har valt och sett som nödvändig för att göra oss mer relevanta för att den biter, den ger resultat, den stärker alla våra varumärken, den ger vår säljkod a broader and more relevant offer. Och det är väldigt glädjande att se med vilken entusiasm det norska teamet har tagit till sig det här arbetssättet. Och som sagt, Norge var först ut, det är där vi börjar se de första resultaten. Vi ser redan nu också positiva resultat i Sverige, framför allt trots att vi har en mer dämpad marknad som vi har nämnt. Men vi är väldigt glada för det och vi är väldigt glada också för det ansvar som alla tar. In summary, I would say that.

If I may add something, it is that we see the same potential as before. It has not happened in Q3, but we see that the choices, alternatives and opportunities we have in front of us are intact. They have not worsened. Det är också en bra känsla att vi arbetar åt rätt håll i allmänhet.

Just det.

Vi har en fråga från Torbjörn. Förbättrade rörelseresultat per affärsområde, men ökade centrala kostnader med 50 % i Q3. Finns det åtgärdsprogram för att reducera de centrala kostnaderna? Svar ja. I don't want to go into details, but that is something we are looking at. In the form of OPEX, all OPEX or all costs are equally interesting for us to look at. Of course, we want the majority of our investments to take place in our business areas, in our business. So I repeat, answer yes.

Then we have another question from Torbjörn.

Torbjörn's questions. How has Office managed to increase its prices in relatively weak market conditions, in parentheses, with reduced order intake? It is not that we have increased prices during the year, but when we compare with the corresponding period last year, we still have it with us. But some of our companies increased already in the fall last year, so the effects are a bit disappointing in Q4. The majority increased during the change of year, so that's what we still have with us when we look quarter by quarter. So that's not what affects our order entry. You always have to balance your portfolio. We have relatively high end products, but they also have a value and we sell them to the customers who appreciate that value. So I would say I think that our appreciation is that it is not a en prishöjning från föregående år som vi nu ser in i Q3 utan det är det här kvartalets egen affär.

Precis, just det. Och då har vi en fråga från Marcus. När rullar ni ut Norges strategin till flera länder? Och det gör vi egentligen. Vi gjorde det som sagt med en viss fördröjning medvetet eftersom vi vet att den här Affärsmodellen kräver ganska så hög servicegrad från back office, från alla våra specialister som ska samtidigt lära ut nya säljarkollegor. på fyra varumärken istället för bara det som man kan från början, ett varumärke i det här taget. Vi visste att det skulle bli en anstormning av både frågor, förfrågningar och fälter, anbud av olika slag. För att hantera resurserna på så bra sätt som möjligt, även om det här har inneburit initialt väldigt mycket utbildning och arbete, så har vi fått ta en marknad i taget. Vi håller på med Sverige. Där har vi även tillfört två nya säljare i Stockholmsområdet som börjar här under Q4. Så att när vi landar dessa nya personer som vet att de går in på en ny affärsmodell som innebär just den affärsmodellen som vi har i Norge, så kommer vi då successivt landa här även i Sverige hela vägen. Men ute i Sverige, i södra Sverige, kör vi ganska så Stockholm will land when we have our new colleagues on site. We have partly already started in Denmark, while we have one of our abstract brands that is extra strong in Denmark, and then it becomes very natural that the focus is there. And other markets are not as big as these Scandinavian markets, but even there we take with us the entire offer geographically on the employees who work on these markets. So successive transition to create stability and good service level to customers. Våra kunder är väldigt mycket i fokus på den här resan. Det är väldigt viktigt för oss att vi förblir och uppfattas också som specialister. Vi blir inte generalister som inte har svar på frågorna. Med respekt för det sortimentet vi har, de frågorna som ställs, så vill vi också säkerställa att våra kunder får bra servicegrad från oss även framöver. Hoppas det var svar på frågan, Marcus. Let's go to the next question from Johan. Can you quantify the investments made in the quarter? What does it look like with investments in Q4?

We can't go into details, but as Susanna said, we make investments in design. We went out with a press release about cooperation with Note. We have a new team when it comes to product management, product sorting and P.U. management for Office. Vi har uppdaterat och förnyat våra showrooms. Det innebär både möblemang, inredning och iordningsställande.

And the digital investment.

And the digital investment. In showrooms. And that is mainly in office. Then we have, as we have also said, investments in libraries with newly employed sellers in some selected geographical areas in respective countries. We are dealing with some costs for business system implementations that cannot be activated as access without comes directly as a cost. So there are different things that happen to have come under Q3, you could say. And as for the future, we can just say, don't talk so much about the future, we don't give forecasts, but it's not the same type of investments in Q4, except for, as Susanna says, some new positions. It's more about delivering on that order book, delivering on what is normally a strong seasonal quarter, especially for office. And that's what we're running for right now.

Yes, then a question from Olle. Are you still confident that the current warehouse levels are sufficient for the current sales?

Yes, as all companies we think we have too much in stock. But it's not that we need to write down anything, this is more about to increase our efficiency and constantly look at improvements in that area in order to successively reduce our moving capital that we bind. And we have managed to reduce it during this year. And it is not in any kind of deductions, but it is organic improvement of moving capital. And we are going to continue with that. Felix has a question. Would you be able to give the results of the different markets, for example, Norway, Sweden, etc. It would have been interesting to see the effects with everything you have done in Norway. We do not share that information in that way and that is something we have to think about. We have sales data in our report, but we do not have EBIT or the like. Johan has a question. Do you think that you reach the goal of 80-90% with the existing market situation or do you need a significantly improved market? Let's put it this way, that we believe in our food program. We have stated that it should give 30 to 40 million per year when it is fully implemented. And I think we are fully capable of that. And this is happening within the office. And we have a relatively stable, good development in the library. We are also looking for improvement opportunities there. Yes, we believe that by the end of 26, we will have a pace that will lead to the result from that point. Of course, it's nice if the market turns up. It doesn't have to be that many percent before it gives an effect. But we will succeed with this ourselves.

Yes, a question from Olle. How is the work with getting libraries to sell more furniture from other companies going?

Yes, we can briefly say that we have identified an internal possibility to sell more Office Interiors furniture through the library business area. And we have initiated that on the French market. Vi tror att det kommer att ha bra genomslag. Vi är på den franska marknaden i en position att i större utsträckning än andra kunna faktiskt specificera produkterna och därmed våra egna produkter. Nu är det inte så att det är en gigantiskt stor del av Libraries produktportfölj, men vi ser fram emot den It's the transition, if you put it that way, and then successively take it to the other big library markets outside of Scandinavia, which are the UK, Belgium and Germany. So in short, it has been initiated. We have good internal interest and we will succeed with this.

Yes, as far as we can see, we have come to the last question, in and with Olle's question here. So it seems that no new ones have come in for a while, so it seems that the flow may have stopped.

It looks like that.

It looks like that, right? Och då hoppas vi att ni har fått svar på de frågorna ni har ställt. Och vi tackar för visat intresse. Alltid extra roligt med frågor. Och som sagt, vi tackar för oss. Och vi ser fram emot förhoppningsvis att höras när vi levererar nästa kvartal. Då önskar vi en fortsatt trevlig dag. Och tack från oss båda.

Tack så mycket.

Tack. Hej då.