Lifco AB (publ)

Welcome to LIFCO Q2 Report for 2026. For the first part of the conference call, the participants will be in listen-only mode. During the questions-and-answer session, participants are able to ask questions by dialing pound 5 on their telephone keypad. Now I will hand the conference over to CEO Per Waldemarsen and CFO Therese Hoffman. Please go ahead.

Good morning and welcome to the LIFCO Q2 presentation. And we can start as always by going into page number two in our investor presentation. And if we look at the second quarter, we are presenting a solid quarter overall with a sales growth of 11%. And in this second quarter, we had organic growth of around 5%. Acquisition contributed with around 7%. and we had a slight negative minor effect from currencies. If we go further down, we grew the EBITDA with 14% and obviously margin increased them from 22.5% in last year's quarter to 23.1%, which is a combination of organic development and also some effect of higher modern acquisitions coming into the group. And also the profit for tax, net profit grew healthy with 18%. Operating cash flow with 14% and earnings per share also grew with 18%. If we look at the first six-month period, after a little bit weaker start to the year, we grow in the first six months now with a stronger second quarter with 7%. EBITDA in sales. EBITDA grow with 10%. I can also go back and just mention the 7% sales growth in the first six months. It's also a 3% organic development and 7% from acquisition and obviously a higher negative impact of 3% in the first six months. For the six months, we grow profit for tax and net profit with around 13%. With that, we can go into page number three, the following slide, and look into the different business areas. And just to remind everyone, this is now the first quarter where we have split it out to business areas. So we have environmental technology and transportation products, which have been previously subdivisions under the CSUS Solutions. They are now sort of separated out. And the CSUS Solutions that we refer to in this page is now the remaining parts of CISO solutions or the previous CISO solutions. But going back to the first area, dental, we are reporting also here solid numbers growing in the second quarter with 5% and profit growing with EBITDA growing with 10%, obviously higher margin here, which is a combination of higher margin acquisitions coming into play and also some continued effect of positive product mix that we saw in the first quarter. And positive product mix in this area typically means that our own manufacturers or own products are gradually taking a bigger share of the dental business area. Going back 15 years ago, we were only a distribution business. We still have those companies in the group, but we have gradually, slowly, over the last 15 years, step by step, went more into own proprietary products. If we go to the second area, demolition of tools, I would say the second quarter was overall quite stable. Sales grow with 2% and profit with 3%, so stable margins here. If you take the full, the first six months figures in demolition tools, after the first quarter we had for that period, a negative mixed effect, which we also comment in our report that the demolition robots had a more difficult market conditions, especially in the first quarter, which have an impact on our margins, slightly low margins for the first six months in demolition tools. But overall, the second quarter was quite stable and in line with previous years. If we then go into environmental technology, we have quite good organic growth. leading to improved net sales of 10% in the second quarter and the growth also translates into operational leverage and higher margins. So we grew the EBITDA with 17% in environmental technology. In transportation products, the next area, we have a combination of acquisitions that are contributing and also strong organic growth in the second quarter so we grow sales with 22% and profits or EBITDA in this case with 26% also with higher margins. And I'd like to make a general comment when it comes to many of our industrial companies they had in 2025 it was probably the most difficult years for the industrial side of LIFCO in the last at least since the IPO in 2014. And this first half year has been a little bit of a comeback situation, more to normality in 2026. It doesn't mean that everything is perfect, but the suffering we had in 2025 is at least now a bit better numbers and better situation for many of the companies in 2026. If we go to the last area, the system solution, is now remaining three divisions it's our contract manufacturing our infrastructure products and our special products here we had in the second quarter also a strong growth of 19 percent also growing profit more 23 percent growth in EBITDA which is a combination of acquisitions and also organic growth in the segment overall I would say in most areas quite stable and good development we can then go into page number four which is the following slide, and that's just a slide that we take very seriously because it's measuring the most important thing, our growth in cash flow per share. And once again, the way we measure cash flow per share in this is the cash flow after capex and taxes and interest and everything. The only thing that is not included is dividends to shareholders and payments for acquisitions. So it's the pure cash flow of the operations in our view. And since the IPO in 2014, we have grown the cash flow per share with around 20% CAGR, also improving slightly in this year. Of course, cash flow can vary quite heavily between quarters, and you have to look at this in a very long-term perspective. We can go in then to page number five and look a little bit more into our financial position. we have a stable situation. We actually have a lower net debt to EBITDA of 1.8 times EBITDA. It was 1.9 a year ago. And that's the net debt including all the option debt and also the leasing liabilities. If you look at the pure interest bearing net debt to EBITDA, it's also down from 1.3 last year to 1.2 this year. And this As I normally say, this also leads to plenty of room for further acquisition and we are, as always, continue to increase our capacity, our way of finding great companies in many different geographies and different sub-sectors and that work is continuing step by step. However, as I always say, the timing and how and when the acquisition materializes can vary and will vary within you know quarters and even six months period. So we continue and have many interesting discussions as always ongoing and the timing is always difficult to predict as we are extremely focused on buying really good companies for reasonable valuation. And with that we can move a bit further down to page number 13 which is a little bit lifting the high-level picture of LIFCO again. I just want to remind everyone how we work and also especially give a huge credit to the entire LIFCO team and all the great people that are working around LIFCO. This is a slide that we've had for many years describing how we work. Before we even get to this page, everything starts with selecting highly differentiated companies to acquire. that have a sustainable business model and very interesting subsectors that we believe can be interesting to develop over long periods of time in the future. And then the second point is that we have a very good team of senior, experienced former or current manager-directors in our subsidiaries. that gradually take the coordination role and the cultural leadership role in all our different subsidiaries that we have. And the job of these people is the most important job is to recruit and coach new MDs into each and every subsidiary. So we have a potential for very good growth of these highly differentiated companies. And then obviously we come into this slide and then we Number one is that we have to have very motivated managers and we work very hard to ensure we have that. And once we have them and the coaching has taken place, we let great people have a lot of responsibility in different subsidiaries. And we've seen over now several decades that they can lead to very good results, both in terms of growth and margins. The second point here is extremely important for us. As I mentioned, we focus on highly differentiated companies and we try to make them even more differentiated over time. we focus on customers and product areas where there is the potential for sustainable profit growth. And we also are willing to sacrifice situations where there is more competition or where we cannot be as special as we want to be. And there we sometimes shrink out of these segments and continue focusing on areas where we can make the biggest difference. And I like to emphasize how important this is. In a decentralized model like LIFCO, an industrial conglomerate like us, it's very, very important that we focus on areas where we can make a huge difference and not go into segments where volume is the only way to make models. And that's very important for us. And then we have a situation where we can have these decentralized models that really work efficiently and have very simple, efficient, and entrepreneurial companies. And we try to have in each and every company a very strong focus on sales, on product development, and assembly. and the people that are doing this job should be the shining stars in our model and not have a bureaucracy level in between. We try to outsource as much as we possibly can, which leads to an asset-light business group. Most of the companies we acquire, they're already outsourced from day one. If they have some insourcing, we try to, over decades, step by step, make them more efficient. The focus that that creates is very important because you can spend more time in the company developing new products that are better and more valuable for customers, you can also think more about how to do global safe expansion of the products that you have developed instead of focusing too much on what machinery that is going to be installed in the production. And then we have a very strong focus on cash flow. We have different measures to implement that and also incentives in the system for that. And maybe the last part, the most important, we are doing this as a multi-decade project. So we don't, even though we focus very much on the profits every month, We also invest time step by step in activities to create long-term growth in all our companies. So with that, I would like to open up for any questions. Thank you very much.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Opo Tani from Goldman Sachs. Please go ahead.