Nederman Holding AB (publ)

Good morning and welcome to this session where we are presenting the Nerman interim report for Q1 2025. If we start with some summaries, we can say we had very strong orders received. Three or four divisions had solid order intake and two of them actually had record quarters in a very turbulent time. We continue to advance our positions in a number of areas. We have an extremely challenging macro environment. We have finalized and are still building on some further investment in operational efficiency. We do have very high level in the newly inaugurated innovation center in Helsingborg. And we do have much better presence in structurally growing industries, which has been important in order to get a good order intake. And we also, during last quarter, finalized the acquisition of EuroEquip in Spain. And a few words about Euroequip. Why did we do it? It strengthens Nerman's process technology vision in foundry, metal recycling market, and as we say, hot air applications. It's a strong market position. They are selling equipment to foundries, metal recycling, and especially aluminum smelting markets. Nederman and Eurochip has a very long working relation where we have cooperated for decades. It gives us a sales structure and a support structure in the Iberian Peninsula and parts of Latin America. They have a headquarter in Lesama, a north part of Spain, Basque country. And we paid about €50 million for a company that has a turnover of €22 million last year.

If I move on to some key financials for the Nehr Demand Group for the quarter then. As Sven mentioned already, orders received was rather strong, just over 1.5 billion Swedish kronor, a very small reduction versus a strong quarter one last year as well. It is the first quarter since Q1 last year where we've been over 1.5 billion in order intake for the group. So we're generally satisfied. And this is with obviously only three of the four divisions having a strong position. Currency neutral, we were down slightly, still 1.8% versus Q1 last year, organically minus 3%. Then if we move on to the sales, Currency neutral, I had to check my calculations to correct, but it was exactly 0.0% change versus last year. 1.4%. 0.06 billion Krone versus 1.397 billion in the same quarter last year. That's obviously lower as we were flagging already after Q4 that we were entering the year with a lower order backlog than we had 12 months previously. What is positive for us, of course, is we've built up a backlog of approximately 95 million Swedish kronor in the quarter. So that bodes slightly better looking forwards. When it comes to profitability, ultimately, EBITDA was down by 31 million kroner to 143 million versus 174 last year. There are some one-off effects that impact the result quite significantly that we ought to flag there. We mentioned already in Q1 last year, there was a comparative figure boost um q1 last year was boosted by 11 million which was a pure accounting booking relating to a subsidiary liquidation that we did uh um if we completed in quarter one last year the impact of uh swede strengthening swedish kroner as well and the rapid depreciation of the us dollar particularly at the end of the quarter also made a big impact so approximately 20 million of of impact that that hits comparability we also a little bit further down the the income statement have uh obviously some acquisition expenses we did a full thorough due diligence in relation to euro equip and that that's been expensed now so that there's nothing we apologize for although it does ultimately impact earnings per share earnings per share in the end ended up on 1.69 kroner versus 2.57 kroner per share in the very strong quarter one last year Moving on to the cash flow and net debt. EuroEquip, obviously, an acquisition for almost 150 million Swedish kronor has an impact on cash flow. We acquired them just prior to the end of the quarter. So we have the debt on the balance sheet, but very little income from them yet. That will obviously change going forwards. Cash flow from operations in the quarter was positive, 15 million, which is down significantly versus last year. The main reason behind that is the reduced order intake in process technology. Large orders in the process technology division on receipt of them, we typically see large down payments from customers as well. A lack of those has impacted the cash flow from operations somewhat. Other working capital has remained rather constant in terms of inventory and receivables and such. When we move on to net debt, I've given the figures including, you see the chart including and excluding IFRS 16. The impact of the leases on these two premises that we entered into last year is quite significant. You see the turquoise on the charts there. But net debt, nevertheless, excluding R4S16, has increased by approximately 130, 140 million kroner versus 12 months previously. During that time, we have acquired Euroequip, Duroair and Olli Semmel as well in Denmark. So three acquisitions there obviously making an impact. on the net debt um that's a brief summary of the financials for the group as a whole if we move then on to the divisions that Sven and start with extraction and filtration technology first yeah extraction and filtration technology um during the quarter we saw the strongest ever

orders received which is a good thing it was boosted by in major orders and it was particularly strong in america in contrary to what we will see in process technology We also have been working with highlighting that for a long time, the aftermarket and service and we have here in the quarter double TD growth also for the service segment, which is important. We did have a much lower order backlog moving into this year. And that means that sales are lagging behind the comparative quarter. eight out of ten major orders were in us as i mentioned before they are doing well in welding wood defense and green energy ev batteries etc we are now also further negotiating to exchange some asian filter supply to either batteries in u.s when they realize that they are not compliant and not working very well. We'll see how that comes out. EMEA saw stable order flow during the quarter and there was a solid base business. APEC noted a slight slowdown, but we grew a little bit versus last year's Q1. And if we talk about the attitudes, it's quite interesting. It seems like Germany are getting more, they're getting a backbone now and starting to talk about future instead of being over depressed. So we'll see what that will lead to during the rest of the year. The key activities relocation of production in Helsingborg was completing and we had February 11 full inauguration. We have also seen that when we look at the tariffs and so on, division has a very significant manufacturing presence in the US. The vast majority of materials are sourced in the US and we will of course continue to monitor the effect of the changing tariffs. roughly 85 percent of the content is america origin for this division in u.s of course for on the financials for extraction and filtration technology orders received obviously a strong increase 10.7 versus last year up to 684 million krona versus 615 616 sorry last year sales

50 million lower than the order intake. So 635 million was almost in line with the same quarter last year. And with the acquisition of DuraWare, they have a cost increase that means that that results with the sales being flat, a reduction in profitability. I can't blame the fuller beta reduction on the DuraWare, it must be pointed out. big positive here 11% increase in order intake quite clearly very strong for the division process technology then yes process technology we had

low ordering take in the quarter. There's a lack of major orders in the first quarter here comparative to a slightly better Q1 2024. We have seen that there has been a hesitancy to sign the final papers for large orders especially in us and we've seen a few orders that we expected in the pipeline to maybe be materialized orders during this quarter that has been pushed forward So we also had a lower order backlog when we moved into 2025. And then again, of course, since this is long term and long cycles, we have lower sales as well in Q1. And as mentioned, there is a very cautioned customer base, especially in the US. And it's not so much the tariffs in itself, it's more the uncertainty that is spread. We do have a very strong quotation pipeline, and it's also so that we are entering into negotiations with lost orders or orders that we walked away from due to the fact that competitors have filed for Chapter 11, they have not been able to finalize the project, etc. So there are a few that we are coming back to again. We are cautiously optimistic that we will see some change during the later part of the year as long as the fog is lifting from this turmoil around tariffs and so on. If we look at textile and fiber, There's a continued overcapacity in spinning and we can see that has an impact. However, sales were in line with Q1 2024. We are taking market share. There are competitors that are leaving us. Foundry and smelters, Euroquip acquired and is a very good strengthening on market areas or especially geographical areas where we haven't been as strong. Low orders received but the profitability is still solid. When it comes to customized solutions, we had low orders received and sale. And this segment is particularly reliant on major capital investments. So it's a clear risk of continued damp demand in this segment. Key activities, of course, integration of EuroCrip. And as mentioned, the use tariffs have not had any material impact on the division's product flow, but we will continue to look at it. Where it has the impact is the uncertainty that it creates.

financials for the process technology division then order intake 344 million versus 486 so that's it's down currency neutral nearly 30 percent that is they must be pointed out q1 2024 was the strongest quarter i think in the last two years so it's tough comparatives but nevertheless 344 is low for this division in order intake sales 354 million versus 392 again we were flagging for this but with the backlog going into the year was low this is the lowest sales quarter for since almost since pandemic pre-pandemic times adjusted a beta still at 6.8 percent 24.1 million but that's clearly down versus the versus the 31.5 million and eight percent that we did in the in the quarter one of last year and a little look on on the top the chart on the top right of the process technology slide you can see the black backlog has has is lower than it has been for quite some time but uh nevertheless is still there is still a backlog there If we move on to duct and filter technology, Sven.

Yeah, duct and filter technology for Q1. Again, strong orders received and it was in many areas, but mainly driven by North Hub US. We had a continuous flow of major orders from manufacturers, even batteries. We have sharply improved sales. We have a solid backlog. continued positive trend in the quarter so if we go to especially in the north where orders received and sales in the u.s grew sharply versus the comparative q1 2024 and we have strong profitability we had new record order intake for ducting to the ev battery segment Orders and sales grew in EMEA versus a modest comparative quarter. And there are still clear fluctuations in orders and sales between quarters in APAC. Positive development in Australia, a new laser welder installed in Thailand to improve efficiency and quality. Minarders orders received increased weld versus Q1 2024. And our rapid delivery capabilities have resulted in several new orders during the quarter. We are a niche player and we focus to support our own business. And when we are close to the market, manufacturing is mainly in US. We can supply on short notice. Key activities is the expansion of the facility for larger dimension ducting. And we have, as you possibly remember, already earlier last year, inaugurated a completely new addition to the facility where we do the traditional QF ducts. Now we are expanding also where we do the large dimension ducting. We have also during the quarter inaugurated the completely automated warehouse in Thomasville which is another efficiency booster which you can see drives also up profitability. At present the impact of tariffs is very limited and most of the manufacturing is local for the market where we are operating.

If I run through some very strong financials for Duct and Filter, then $224 million in external order intake is up from $184 million up 19%. Sales at $240 million versus $207 million last year is 14% growth, and then the EBITDA increases from 43 to 53 million kronor and a margin a beta margin for the first quarter of the year of 22.1 percent which we are obviously very happy with um if we move on to monitoring and control technology then yep uh again strong orders received and again a a divisions that had a new record order intake for a single quarter

January was very slow, but picked up in February and especially in March. NeoMonitor is starting to benefit from increased production capacity and efficiency. We are continuing to shape up that manufacturing site in Oslo, Norway. Profitability clearly up versus Q1 last year. EMEA, we have seen order intake growth. We do have a strategy to grow in service business and that is developing well. We started when we started and we acquired these companies. It was a very low portion that was repeat business and service. We have gradually increase that and we also incorporate our digital solutions that enhance the capability of doing remote service remote calibration etc Collaboration between the business units is increasing further and we have an ongoing adaptation of Orban FilterSense product line for Europe. We have also a full test set up in the new innovation center here in Helsingborg where they have a long-term test capability we didn't have a year ago to do in-house so we are looking forward to see the capabilities here and the result we will also start selling in larger scale AFS products in Europe end of the year. In APEC several major orders received especially in China and we have here an increased focus on direct sales especially near Montessori, performed very well with orders and sales going up. The local service grown for new hub in China. We have set up a small service hub in our factory in Suzhou where we can do service, we can do calibration. And instead of having to send and ship over to China, Oslo, we can now do the basic service in China, which has been received very well among our customers. In America, orders received increased sharply. All business units reported favorable growth. Urban filters, hence, delivered in line with its current capacity. So we come then continued key activities is to increase NeoMonitor's production capacity. It also been taken decision to increase the production capacity in Boston US and it will commence in near time. Production in US is in one site, and we have in Europe two sites. It's, as I mentioned, Boston, and it's Oslo and Helsinki. There's no major changes to product flow currently planned, and there are contingency plans in place for change in tariffs, including for some component sourcing, if deemed favorable and necessary.

financials for the division then orders external orders received 249 million which is very strong for for them uh up a record quarter as Sven mentioned up from uh up 6.6 percent from a strong quarter one last year of 234 million total sales clearly below uh a long way below orders received almost 50 or 50 million below 198 million in sales versus 187 million is still an increase of 5.8 percent so uh on sales of less than 200 million the division has managed to do an 18 to beta which is 35.6 million swedish krona The outlook going forwards then, Sven, the crystal ball.

Absolutely interesting to try to do. But demand continues to be slightly slower. Investments are a bit slower. Investors are a bit hesitant, but our base business, our growing service business and the very strong digital range enable us to assert ourselves well in current market. We do take market share. Even if the performance of divisions are largely positive, there is a risk that current very uncertain market environment can continue to impact customer investment decisions in the quarters ahead. We don't know. Some are doing very well, some are doing less well. And I think that we have to see and we will see that pattern. Our order backlog remains good and we have a strong offering enabling us to advance our position even in this challenging macro environment. And again, in a world with growing insight into damage and poor dust to people, Niedermann, with leading industrial arbitration offering, has a key role to play and good possibilities for continued growth.

The upcoming financial calendar for the upcoming period then. The annual general meeting is next week on Tuesday, the 29th of April at 4 p.m. here in Helsingborg. The preliminary record date for the dividend that is proposed to the AGM is the 2nd of May and the distribution is scheduled for the 7th of May. The interim report for quarter two will be released on the 15th of July and the interim report for quarter three will be released on the 23rd of October this year. And with that, I think we can open up for any questions that listeners may have.

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 Lena Bloom from Handelsbanken. Please go ahead.

Good morning, Sam and Matthew. Thank you for taking my questions.

Thank you.

Good morning. As you mentioned in the report, good morning. As you mentioned in the report, it is expected that the growing political uncertainty will have a negative effect on order intake in the coming quarters. But is it possible to say anything about the current order trend if you're already at the end of the quarter or now in the beginning of Q2 have noticed lower activity?

I think that it's been a very interesting Q1. Started very slow, turmoil in February, very good bounce back in March when it comes to order intake. And you can see that because it came fairly late. It continues, but it's very volatile. And you see how good these specialties that MCT is doing, duct and filter is doing, and order intake also in EFT has been on a record level. then pt had suffered has suffered both in december and the first quarter that these mega large projects where we are a small portion of has been pushed forward and we don't know when they will start again on the other hand we are coming back to and are invited again to orders where we clearly said to a customer or potential customer we can't do it this cheap we cannot do it on on sort of this light model that has been because it just won't work and we have three actual cases where we are now re-invited because One doesn't work. Two, the supplier has gone bankrupt during the meantime. So we still stick to our price discipline, high quality supply. And we believe that that will be rather effective. rebounds later on. But the coming two quarters can be very, very volatile with the 90 days of tariffs and so on. Investors want to see or the boardrooms want to see that we have the fog is lifting, we know what we can expect in that. So it's been very interesting period where we have growth in three divisions, record order intake of two of them, and one that has had a very, very weak order intake.

Okay, perfect. Thank you for that. and then in the extraction application division you mentioned that profitability was dampened by fewer medium-sized orders which usually have higher margins is this a trend that you expect to continue like in the order trend or is it usually something that can differ quarter to quarter

it's um it's um if you look at the extraction and filtration technology they did they grew their backlog by approximately 50 million in the in the quarter they were lacking these these mid-size orders that were in the sweet spot but we have had we've had a very good order intake this quarter so we are expecting these will also these orders that we've received will also boost the utilization in our factories as well and we fear i think there will be you'll see some bounce back on the profitability going forwards that is of course dependent on the continued order intake which is the big question mark but uh those mid-size orders are are nice to have and we we flagged already after q4 that they were we were lacking a bit of background going into q1 this is i think this is quite low margins in the quarter and you should not expect that level going forwards. Anything to add on that, Sven?

Yeah, but I think it's the volatility. If you look on the last month of the quarter, the picture would have been significantly different if I put it that way.

Perfect, that's clear. And then just a last question for me. Also in extraction and filtration, you mentioned that orders were secured in data centers. Could you give some color on what you're offering is to the data center industry? And would you say that this is a growing industry for you as a share of SAFe?

I wouldn't say it's a growing industry for us. We have some niche products that we are, but we again, we have high quality product that that can be in some areas be used. I would say the key developments is rather that we are now getting into battery manufacturing where the normal Asian supply has not function as it should it's not fulfilling all the regulations so that is an area we are also coming back into other areas where we have not been traditional being present. As you know, we have been very strong and still is in welding, wood, composite, etc. We are now coming into more areas like food mixing stations, chemistry and so on as an alternative to a weaker demand in the traditional industry like wood you all know about the the housing market the furniture market windows doors etc has not had a good demand and we have altered that into a number of others and broaden our scope because it's the same product it's just a different application and So we are always cautious. So when we go into new applications, we try and put a foot in the water and see, can we handle this? And how do we do it? How do we know and handle the processes? But generally speaking, it's exactly the same product. It's just how you build the system around it.

Perfect. Thank you for that. And that was all for me. So thank you for taking my questions.

Thank you. Thank you very much. Thank you for taking the time listening. And the takeaway from this is that it's turmoil, uncertainties, but we are very have a very strong order intake and we are committed to continue to develop and we see that despite the turbulence we are continuing to strengthen our position as the market leader and We therefore have a positive view for the rest of the year. However, the turbulence might make it a bit bumpy on the way. So thank you for taking time listening.