NCAB Group AB (publ)

Good morning and welcome to our Q1 report. My name is Peter Kruk and I'll be starting the presentation today. Again, for the new listeners, NCAB is focused, the company focused solely on printed circuit boards and these are unique bespoke products that are the heart and foundation in any electronic or intelligent product that we supply. And these are the green boards that you see to the left on this slide. We are a company present in 19 companies across 19 countries, 19 companies, serving some 50 markets with a little bit more than 600 employees and serving our customers with the help of some 33 main partner factories. We have no in-house manufacturing, but instead of working with partners and we have Out of our 600 employees, we have some 100 plus who are working specifically with developing a factory base and working on continuous improvements with our partners. If we then move to quarter one. So it's a quarter where I think they have some positive news. On the positive side, we can see an improved order intake. We're up some almost around 10% versus where we were in Q4 and Q3. So clearly improving and it's good what we can see is it's a strong order development in North America and East and also better than what was actually already a strong Q1 last year. Europe is improving versus Q4, even if it's slightly behind where they were in Q1 last year. Revenue as a consequence from our Q3 and Q4 order intake is lagging behind, but it's recovering from Q4 as we saw some of those seasonality effects that made Q4 extra weak come back in Q1 and support us. Cross margins are down a little bit versus Q4. EBITDA is recovering with the volume. We see quite a bit of FX impact in the quarter. These are predominantly revaluation effects. So nothing that is something that's going to continue going forward. And there's also some mix and also some dilution effect from the acquired companies that are part of our numbers. Alibida has recovered now with our revenue to a better level than what we saw at the end of last year. We are in a situation right now where we're handling tariffs for primarily our US customers. I think they create, of course, some challenges, but they're also opportunities for NCAB to forward its positions. Regarding tariff costs, these are costs which are transferred to our US customers. We have been living with tariffs since the previous Trump administration. But now we of course are adapting to the new levels of tariffs that are applied. But it also gives an opportunity for our US customers to find alternative suppliers. NCAB has invested over the last couple of years in building a factory base outside China, which is the main manufacturing nation. And that gives opportunities right now to help customers find new sources for supply to potentially offset some of the tariffs. Also very positive is that we have been able to continue with our M&A activities. And we two days ago announced the acquisition of B&B Leiterplatten Service in Germany. B&B Leiterplatten Service is a company in Saxony, so the former eastern part of Germany. And they had a good coverage for us in this part of the German nation. They are focused very much on industrial and energy customers working with energy metering products and so forth. A very good technical level, so we get a lot of good employees to join the company. They used to run a factory up until 2022. So a lot of skills inside the company, which is a good asset for us as we take the company forward. Revenue last year was around 150 million SEK, and they had an EBITDA, a healthy EBITDA level above 20 million. So we will gain now some 25 employees based in Germany mainly, and some in China who will be joining our business. And we expect to close this transaction here in the early part of May. If we then look at Q1 in the numbers perspective, we can see that our order intake is up around 5% versus last year. Of course, here we are supported by our acquisitions. But in order intake in US dollars, we're up 2%. And we also have a continued strong book to bill of 1.06. Net sales is up slightly versus last year, but here, of course, organic growth is down a little bit since we have the acquisitions that are supporting the year-on-year comparisons. EBITDA compared to last year decreased. We are now at 100 million SEC, but it's an improvement clearly from where we were at the latter part of last year. We're now at a margin of 10.4. This, again, is a little bit lower from the FX effects we have seen and some mix changes in the first quarter. which we expect to correct itself going forward. Operating cash flow at 53 million SEC, working capital up slightly. This is partly tied to some of our NCB1 or ERB implementation, where we are sort of cleaning up some accounts payable as we go live in new entities, and that temporarily has lifted the number somewhat. Even though we have a strong end of Q1 in terms of order intake, and we don't really see any negative news In our numbers, we have given the big uncertainty that we see in the overall market with tariffs and potential impact this could have on the general economy. We have taken the decision to, in order to sort of have financial flexibility, to also continue with an offensive M&A agenda, we've decided not to pay out a dividend in light of the current market uncertainty. With that, I'm giving the word to you, Tim.

Thanks, Peter. As you hear from Peter, about 1% up on the sales side versus quarter one 2024 in US dollars down about 2%. And we had EBITDA come in around 30% lower at 100 million sec in the quarter, but sequentially up. And we also landed the quarter at 10.4%, as you heard from Peter, with some FX effects at 10.4%. When we look at how the top line has now stabilized a bit and you start to see order intake posting some better numbers, we also see gross profits stabilizing a bit around the 35, 36 level in the last 12 months. And the other thing that we see on the order intake side is around a 5% growth. in total and in comparable units in US dollars down by about 5%. We do see some positive developments, some positive lights on the Nordic side, especially versus recent quarters. And East has also been quite positive within the quarter, but we still see some weak demand on the European side. Net sales up by about 1% to around 958. and in comparable units down by about 8%. We see a positive book to bill of 1.06 and continued good trends in new part numbers and new customers one. So overall, that puts the EBITDA to 100 million sec. We see that when we compare versus the prior year cost by lower revenue in gross margins, We also have gross margins at around 34.7% compared with 38.1% prior year. Part of that is pricing, but part of it is also higher freight costs as well. That puts our earnings per share at 0.28 SEC versus 0.48 prior year.

Thank you, Jim. Moving over to a little bit closer look at the segments. So the Nordic segment had a little bit of a weaker order intake in the quarter, also slightly down both versus Q4 and also down versus last year. We can see some mixture of activities here. I think we can see positive trends in countries like Denmark and Finland, for instance, where we see growth both sequentially and also versus last year. Norway, the market was quite a bit weaker. We had in the beginning of last year still quite strong EV business. I mean, we have talked about the EV business being an important part of the Nordic business. that has been quite slow during 24 i mean we are we're happy to see that our customers in this field are ramping up and are delivering our product during this year but they still have had some work to get through their inventory so we're expecting this to start recovering here later in the year for us as well Net sales was up a little bit versus last year, so up 4%. But what we've seen on the margin side, we have quite significant effects. I think for the group, it's around, I think, 1% year-on-year on the gross margin impact. But for the Nordic segment, it's significantly more. We see that some other segments, maybe it's been slightly positive. And this is purely related to revaluation effects of the existing AR and AP that we have. So nothing that has a long-term impact. And I think with the big swings we've had in the currencies during quarter one, this has created extreme effects in the specific quarter. And that also then has trackled down to the EBITDA level. So EBITDA is down to 24 million SEC versus 41 last year. And the margin is down to around 11% versus 19 of last year. Looking at Europe, we are positive to see that the order intake is continuing up. We are now up from in last quarter, we were around 430 million. So a big step up on the order intake sequentially and also close to where we were last year. Although if you take out the acquired companies, we are still some 30% behind what was still a strong start of last year in the European markets. But it's positive to see that say that the trend sequentially is positive. And we can also see that year on year we also see positive development in a number of markets in Europe like Spain and Benelux. So I think the trend and the momentum is moving in the right direction or have been in the last in the first quarter. Net sales down 1% versus last year. But a big jump up, of course, versus Q4 where we had net sales of 365 million SEK. And this is a large part of that was seasonality, which made Q4 extremely low. and now we gained some of that back in Q1. Organically, revenue is still down and connected to the low-order intake that we saw in last year. So EBITDA decreasing versus last year to 55 million SEK, but with a margin of 11.2 versus 15.2, but a big step up from the Q4, where it was just a small positive number. Going to the US, order intake very strong, so good positive development here. We had a slightly weaker order intake during Q4 after, I say, overall a good year in terms of order intake development. Q4 was a bit weaker. And this is also reflecting into our net sales numbers, which are a bit lower. And also here, one needs to factor in when one compares the 188 with 191 of last year, that we had overall in the quarter a higher US dollar, which actually means that in US dollar terms, the revenue was actually slightly lower than last year and that means that also has had an impact on the margin in the business in addition to some product mix where we have seen some more of our certain product or technologies that we supply which has been higher in the share of the overall business. The tariffs are being transferred to customers, effects in Q1 are still very very small as the So the new tariffs start to come into effect from February and then March. And this is based on orders hitting the ground in the US. So we'll really start to see the impact on top line in Q2 from the tariffs. So EBITDA is down to 18.2 million SEC from last year's 24 and predominantly driven by lower gross margin but also in relation to sales higher SG&A due to the fact that say in US dollar terms our sales were lower. And then moving over to East, where we can see also here strong order intake. And here we also have good order intake in Q4, which is also helping the net sales development. So the market in China, you can see, has been slowly improving. We have still seen a good influx of new customers in high technology applications. We can also see that, say, lead times for high-tech material is starting to grow. And this might then spread to other markets going forward. and might also be a sign then that prices might start to move up. Overall in the business, healthy margins, EBITDA increased to 8.2 million SEC versus six, and the EBITDA margin at 16% versus 15 last year. And we continue to run the business here with good gross margins connected to the high tech services that we are providing in conjunction with these sales. Okay, over to you. Thanks, Peter.