Nolato AB (publ)

Good afternoon and welcome to the presentation of Nolato's first quarter 2023. This is Krister Walkie speaking. I'm starting on page two in the presentation with the summary of the first quarter of Nolato Group. During the quarter, our sales amounted to just shy of 2.5 billion. which is a decrease of approximately 20% if we adjust for currency in comparison to the first quarter 2022. Below, we saw a strong growth for our business area medical solutions, but lower volumes within our integrated solutions business area. The operating profit EBITDA amounted to 193 million in comparison to 267 in the previous quarter. The cash flow amounted to negative 46 million because of an increased working capital requirement mainly within the integrated solutions business area. We have sustained a strong financial position enabling us to continue with acquisitions for building for the future. On the right part of the page, you will see a graph of our 20-year growth from a lot of group going in different phases. First, we were balancing the group and enabling us to have a three equal size business area. The second step was then balancing the business area integrated solution, building up our EMC business within that. And then over the last years, it's been growth across the different segments. Turning to page three, looking into the different three business areas we have. Medical solutions amount to 1.3 billion approximately, being grown steadily over the years. And within this business area, we work as a development and manufacturer of complex product systems. for the medical device industry, pharma industry, and diagnostics. Integrated solutions business area, it's design development manufacturer of advanced devices for the consumer electronics, as well as EMC thermal. Industrial solutions on the 740 million, working as development manufacturer of product systems for automotive, hygiene, packaging, garden forest and different industrial segments. Turning to page 4, medical solutions business area. On this slide you will see a graph of the 20-year development of this business area. It's been a long stable continuous growth. Approximately half of that growth is organic and approximately half is inorganic. a good continuous growth for the business area working with global expansions. If we turn to page five and look into the different product areas within medical solutions, we have in vitro diagnostics amounting to approximately 15% of the total business area. That is diagnostics products for testing things. You take your blood sample and then you test different things. Cardiology, approximately 8% of the business area sales. This is different things for pacemaker industry and different heart surgery and things like that. Then we have the pharma packaging, approximately 13% of the business area. This is the segment where we do liquid and solid packaging for drugs. This business area, or this segment is something that we entered into. We saw the development of drug delivery technology that was coming from both packaging side and the device side. Then we have the continence care business, and that's a different kind of high volume products for taking care of continence, incontinence problems in the body. We have the endoscopy and general surgery at approximately 22% of the business area. And then we have the drug delivery systems at approximately 14%. So those are then the auto-injectors, injection system, and so on to get the drugs into your body. If we turn to page six, looking into the first quarter for medical solutions, during the quarter, we saw a strong growth in most areas, giving us a total growth of 13% if we adjust for currency. We saw the IVD sector at the low unchanged level during the quarter. The margin ended up at 10.0% with the operating profit of 132 millions in the quarter. If we turn to page 7, looking into the integrated solutions business area, in this business area, We are expanding ourselves into new market segments and have been doing that for a period of time. And we have seen over the last years very strong growth for the BHP part of that business. Now we are in a different situation, enabling us to focus on growth in other areas. If we turn to page 8, looking into the different parts of the integrated solutions, On the left-hand side of this picture with the reds are the consumer electronic part of this business area. So here we are doing complex modules. We are doing different kinds of speakers. And then we have the BHP area, different kinds of in-over earphones, wearables and handheld well-being devices, and then smart home and home security. But up until now, the BHP has been growing for a long period of time, creating a situation where we are focusing very much on maintaining that growth and delivering to the customer. But now we are in a position where we can put more emphasis and grow in the other areas, creating a more stable business area long term. On the right-hand side of this picture, we see the EMC and thermal part of the business, where we are producing different kinds of materials and solutions in order to shield electromagnetic influences and taking care of heat distribution from electronic components. If we turn to page 9, focusing on the first quarter for integrated solutions, During this quarter, we saw a decrease of 66% adjusted for currency in the sales numbers. And we saw the consumer electronics volumes on the level that was previously announced. And the effect of the decrease is, of course, the change in sourcing strategy from the significant customer. but also lower total volumes for that customer due to the situation in Ukraine and Russia. On the other hand, EMCs continue to perform well with sales increasing to 171 million in comparison to 153. The margin ended up at 5.3%. And of course, the model was affected by the lower volumes. So the first quarter ended up with the sales of 440 million and an operating profit of 22 million. If we turn to page 10, focusing on industrial solutions, in this business scenario, we are on the technology and geographical expansion journey. And if we look on page 11, we see some of the different product areas. So these are domestic appliances, hygiene products, furniture, different automotive things, and garden forest equipment, and of course packaging and other industrial segments. If we then turn to page 12, focusing on the first quarter for industrial solutions, In this quarter, we saw a 7% increase if we adjust for currency, and we saw that the automotive volumes increased, and we saw that the supply chain disruptions have less an impact than we previously seen. We saw also demand for products in consumer discretionary sector slightly lower due to weaker economy. So the first quarter ended up at 740 million in sales, an operating profit of 46 million, creating an EBITDA margin of 6.2 percentages.

Good afternoon. Per-Ola Holmström presenting Group Financial Highlights on page 30. Net sales ended up at almost 2.5 billions, which was a 20% increase decrease adjusted for currency compared to last year. Operating profit went down from 267 millions to 193 millions, giving an EBITDA margin of 7.8% compared to 9.3% last year. The cash flow after investments was minus 46 millions compared to minus 41 millions we had a situation during this quarter where we built up additional accounts receivables because of leaving the supplier finance solution with one of our main customers so that is the reason for that and other areas in the cash flow were more similar to last year. Earnings per share ended up at 0.5 SEC compared to 0.75 SEC last year.

If we then turn to page 14 and look into the current situation per business area, starting with the medical solution, we have a maintained growth strategy lot of focus and emphasize on innovation based on strong customer relationships on the integrated solution side we have established position in new product areas we have a base in a flexible production structure and we see progress in the automotive area that is very positive for the emc but overall we see some geopolitical concerns affecting integrated solutions On the industrial solution side, we have advanced our market positions, a lot of emphasis on sustainable solutions, but we see weaker economic conditions. We will now open up for questions.