Nolato AB (publ)

Hello and welcome to today's webcast presentation where Nolato will present the Q2 report for 2024. With us presenting we have the CEO Krister Wahlqvist and CFO Per-Olo Holmström. If you're calling in and would like to ask a question please press star 9 to raise your hand and then star 6 to unmute yourself. We will then announce if it's your turn by saying the last four digits of your phone number. You can also use the form that is located to the right. And with that said, please go ahead with your presentation.

Good afternoon, everybody, and welcome to Nolato's presentation of second quarter 2024. This is Krista Walkie speaking. Starting on the second page of the presentation deck, we can conclude that the sales amounted to a little bit more than 2.4 billion Swedish krona during the second quarter, which is a decrease of approximately 2% if we adjust for currency and acquisitions. We also see that the VHP effect will be phased out during next quarter. And if we would exclude the VHP effect from this quarter, we would have seen growth. The operating profit ended up at 245 millions in the quarter, and we see that our margin improvement initiatives yields desired effects. During the quarter, we had a very strong cash flow from operating amounting to 434 million. And of course, the improved profit, but also reduced tied up working capital created that situation. We have a very strong financial position and the financial liabilities in relation to our adjusted EBDA amount totaled 0.8 times. If we turn to page three in the presentation deck, showing the two different business areas within the group, across the two areas, we have the same offering to the market, but of course, with different dynamics, creating different key drivers for the two areas. The medical solution is now the largest part of our group and engineered is in the re-focusing phase of the BHP business. Turning to page four, showing a 20 year of medical development and it's a continuously growth over the period with some good growth situation across the years. The quarter ended up just shy 1.4 billion Swedish, and it corresponds to 56% of group sales. These are the, on page five, we will see the focus product areas within the medical division. And of course, we've seen a good growth within in vitro diagnostic and some small decline within pharma packaging. On page six, we summarized the medical solutions business area for the second quarter. The sales was unchanged. And then, of course, we saw that IBD grow compared with the week quarter last year. We saw lower volumes within our other category. And it's the customer product recall that we have informed previously about. And the pharmaceutical packaging experienced lower volumes. We saw inventory adjustment, but also some geopolitical effects affecting the business. The margin improved to 10.9%. And of course, our continuous focus on improving margins is generating good results. And also the strategic price revision and cost savings, creating the margin of 10.9%. So the operating profit EBITDA ended up at 149 percentages. On the right lower corner you can see the split of the sales between different product areas and in that sense we can see the other category decreasing two percentage points according to in the second quarter. Jumping over to engineered solutions, on page 7, we have seen volatile development but underlying growth, but over the last period a decline due to the BHP downsizing. On page eight, we see the split of the different segments. We see the materials that is a little bit different business than the rest. It was formerly called EMC, but the other four categories are very similar in the nature. On page nine, we can summarize the engineered solution second quarter. We saw a decrease of 4% adjusted during the quarter. And of course, depending on the volumes within the consumer electronics, declined this quarter as well. And if we would exclude the VHP from the situation, the rest of the business is growing approximately around 5%. The automotive area continued to grow, but on a lower growth level than the first quarter. We saw also good growth in the hygiene area. in comparison to, of course, a weak quarter last year. And in the other category, we saw also some good growth with the recovery of consumer discretionary sector. The margin ended up at 10%, of course, driven by a favorite product mix, but also the cost adjustments announced previously. So the quarter ended up at just shy of 1.1 billion with an operating profit of 108 millions during the quarter.

Hello, everybody. Per-Ola Holmström commenting key performance indicators on page 10. Net sales was 2,439,000,000 A decrease of 2% from the effects of the BHP business, except for that effect, the group did have growth. Operating profit rose 24% to 245 millions, now totaling an EBITDA margin of 10.0% compared to 8.0% last year. The effective tax rate was 21.9%, which we consider to be in line with the full year rate. Cash flow was strong from operating activities, 434 millions, supported by higher results and less working capital need. After investments increased as well, as CapEx was slightly lower than last year and totaled 336 millions. For the whole year, we expect around 750 million SEC in CapEx. Earnings per share increased to 0.63 SEC compared to 0.58 SEC last year. We have a solid financial position with net financial liabilities of just above 1.1 billion and an adjusted debt ratio of 0.8 times.