Nolato AB (publ)

Hello and welcome to the presentation of Nolato's second quarter 2023. If we start on page two in the presentation deck there's a summary of the second quarter for the group. We had sales just shy of 2.5 billions during the quarter and we saw decreased volumes within our VHP business but good performance or positive performance within industrial and medical. The operating profit EBITDA ended up at 198 million in comparison to 264. The EBITDA margin was affected by the lower volumes within the VHP sector. We saw good cash flow during the quarter and it rose to 224 million if we exclude acquisitions. And we have sustained our strong financial position. If we then turn to page three in the presentation deck and look at the different overall picture of the different business areas, starting with the medical, we had sales just shy of 1.4 billion during the quarter and then the beta of 138. And that is, of course, then more than half of our sales within medical and two-thirds of the group EBITDA result coming from the medical division. On the integrated solution side, we saw the heavy decrease due to the changed purchase and different volumes for the BHP. So it ended up at 392 million and then EBITDA of 16 million during the quarter. On the industrial side, we saw good performance and sales ended up at 724 million and then a beta of 56 during the quarter. If we then turn to page four, starting with the medical solutions business area, we are continuing our profitable growth journey. And you see on the graph the development of the sales of the business area over the last 20 years. So it continues good. development of the business area. On page five, we see a split up of the focus product areas within our medical solutions business area. So most of the areas were performing good and the exception was the in vitro diagnostic where we still see some lower volumes due to the supply chain adjustments after COVID in that business area. We then go to page 6, focusing on the medical solutions for the second quarter. We saw a 6% increase of sales if we adjust for currency. We saw, as I mentioned, good growth in most of the market areas, but the IBD is on an unchanged level, and we see still inventory adjustments in the total value chain. The margin ended up at 10.1%. giving them the overall development of the medical business formulator. On page 7, focusing on the integrated solutions, here we have seen a dramatic growth over the years within the VHP. We are now in a situation where the VHP has been decreased due to the new sourcing situation and also the lower total volumes in that business. and enable us to grow in other market areas and market segments, which we are focusing on. If we turn to page 8, you will see those areas that I mentioned. So the BHP is now decreasing as a total share of the total, and we are focusing very heavily on growing the smart home and home security part of the business, the wearable, the well-being devices, the in-ear phones, speakers, and the complex modules on our side that is the consumer electronics side. On the right-hand side of the page, we see the EMC part of the business, and that is then, of course, sort of a little bit of a different business model in that. If we turn to page 9, summarizing the integrated solutions business area, During the quarter we saw a 63% decline if we're just for currency and of course it's low volumes and the change of sources strategy at the previous significant customers within the BHP area and that the BHP within Nolato is now approximately 5% of the group sales. The EMC sales increased to 174 millions and we saw a The automotive area increases significantly while we saw the telecom area had lower volumes as a total. The margin ended up at 4.1% and we are working with cost cutting but maintaining our strength in order to build new businesses within the other segments of the consumer electronic area. So sales ended up at 392, as mentioned, and the operating profit 16 million through the quarter. If we turn to page 10, focusing on the industrial solution, here we are on the technology and geographical expansion journey. And if we look on page 11, we see the split down of the different product areas that we are focusing on. So these are then the different segments within the industrial sector. If you look on page 12, summarizing up the industrial solutions business area, we saw during the quarter a 1% increase in our sales if we adjust for tenancy. We saw volumes in the automotive have risen, and also we saw less disruption in the supply chain. compared to previous quarters. We saw also that the margin for products in consumer discretionary sector slightly lower due to the weaker economy. So the margin ended up at 7.7 percentage points and due to the less destruction in the supply chain movement of course more efficient production for us.

Good afternoon. This is Per-Ulla Ormström presenting Group Financial Highlights on page 13. Net sales was almost 2.5 billion in the quarter. The 20% decrease adjusted for currency compared to 2.9 billion. Operating profit was 198 millions. with an EBITDA margin of 8.0%. Cash flow was strong in the quarter. After investments excluding acquisitions, it rose to 224 compared to 71 by more favorable working capital and less capex. Earnings per share was 0.58 SEC compared to 0.71. Dividend was paid out with 512 millions in Q2, and net financial liabilities increased to almost 1.2 billion.

Turning to page 14 and focusing on the current situation per business area, starting with the medical solutions, we are on a maintained growth strategy, a lot of focus on innovation, built together with strong customer relationships. On the integrated solution side, we have established positions in new product areas. We have a very flexible production structure in the base, and we have good success within the automotive area that is positive for the EMC, but generally speaking, lower volumes within the telecom area. Overall, there are some geopolitical concerns that affect the global supply chains. On the industrial solutions, we have advanced market positions, a lot of emphasis on sustainable solutions and overall a general weaker economy. We will now open up for questions.