Nolato AB (publ)

Hello and welcome to today's call with Golato where CEO Kristi Holqvist and CEO Per-Ola Holmström will present a report for the third quarter of 2024. After the presentation there will be a Q&A so if you're calling in and want to ask a question please press star 9 to raise your hand and then star 6 to unmute yourself when you're given the word. It's also okay to send in questions through the forum to the right and with that said I hand over the word to you guys.

Thank you and welcome to the presentation of the third quarter of the Lotto Group. This is Christoffer who is speaking. If we start on page two with the summary of the third quarter, we saw a quarter with an increased sales, approximately 5%, and the growth was across both business areas. We saw an increased EBITDA that rose by 22%. ending up at 235 millions. That, of course, corresponds to an increased margin, ended up at 9.8, and we saw this situation in both our business areas. The strong financial position with a relation EBITDA towards financial liabilities ended up at 0.6 times. This is enabling us to act together with customers and continue to build our global offering to the market. Turning to page three, summarizing the two business areas, we saw the good growth and focusing on offering on two different markets, but with the same offering across and enabling and creating synergies between the business areas. Jumping into the medical solutions business area, on this slide you will see the long-term growth, continuous growth over the 20 years shown on the graph. Building strong footprint together with customers on a long-term basis by continuous growth together with these customers across. On page five, we are showing our focus products areas within the medical solutions business area. If we start on the top right corner in vitro diagnostics, this area saw growth in the quarter after some sluggishing volumes or low volumes after COVID. This area has been affected by COVID with strong growth early on in the COVID situation and then some supply reduction or stock reductions across the full scope. And now we see growth again. The second one, cardiology, has been affected also by the COVID. And we've seen first slow volumes in the early days and then some supply chain buildups and now some reductions in the supply chain. Pharma packaging, it's a stable market. It contains dry containers for liquid and solid drugs based on an offering to big pharmaceutical companies. Then continence care, it's of course a high volume market. with the high usages of these products for people that have some difficulties with the continence situation. Endoscopy and general surgery, it's an interesting market with some changes coming with more optimization of the surgical business. These business areas also have had some sluggish volumes during COVID and after COVID with build-up and long supply chain disruptions. The drug delivery market, long-term growth market, stable and continuous, not affected by COVID at all, not in any directions. So it's more of a home care business. You get your drugs and continue to use these drug deliveries. We see a long-term potential in this. Looking into the financials of the third quarter, we saw an adjusted, currency adjusted growth of 5%. And within that situation, we saw a good growth for the IVD business. We saw healthy volumes within the drug delivery. We saw, on the other hand, lower volumes in other category. And we've been communicating about the customer product recall affecting this year. We saw within the pharmaceutical packaging some lower volumes. There were some customer inventory adjustments and also some geopolitical effects in this quarter. This total sales ended up at 1.355 million and an operating profit of 145 million, creating a margin of 10.7%. If we look on the pie chart on the right corner, we see some movements between different segments. We saw, of course, in vitro diagnostic growth growing as a total percentage of our cells. We also saw drug delivery growing. Then on the other hand, we saw some decline in the percentages for pharmaceutical packaging, also on the other segments in this quarter. If we then jump to page seven, focusing on engineered solutions, on this 20-year graph, we see some heavy growth over some years, and then a downturn with the phase-out of our VHP business. We are building a solid and strong footprint within multiple areas, so that's what we are doing at the moment with this business. If we look on the focus product areas within the engineered solutions, starting at the right upper corner on the consumer electronics, this consists of different wearables, smart home, connected Wi-Fi systems, and the different type of products. Then we have our automotive area, where we focus on very technology advanced product, but mostly based on the Scandinavian automotive market. Hygiene products are different kind of devices and such things that are around the hygiene area. On the other area, we see some household appliances, furniture, and some cleantech products. Then we have the materials selections, which consist of electromagnetic shielding products of communicating devices and thermal management product protecting electronics. This area is a little bit different in the business setup than the rest. It's more our own platform products that are applied in different areas. Jumping into the third quarter of engineered and the financial side of the business, we saw an increase in the quarter 4% if we adjust for currency. We saw during the quarter temporary rise within the hygiene segment. We saw also signs of the decline in volumes within the automotive based on a lower end customer demand. And we think this will negatively impact the fourth quarter as well. Within the materials, we have generated increased volumes and a growth of 17% adjusted currency. We saw growth across, but also healthy growth for the telecom in comparison with the slow quarter last year. So the margin ended up at 9.8%, of course, based on our cost adjustments in our Asian operations, but also a favorable product mix. If we look on the sales per customer area chart, we saw a decline of the automotive. Other area was growing good, and of course, materials were growing good in the quarter.

Good morning, Per-Ola Holmström commenting Group Financial Highlights on page 10. Net sales was a growth quarter by 5% and sales was 2.4 billion compared to 2 billion 340 millions. Operating profit rose 22% to 235 millions compared to 193. totaling an EBITDA margin of 9.8%. The effective tax rate was 21.8%, very similar to the Q2 number. Cash flow from operating activities increased to a strong 327 millions compared to 280. However, net investments increased to 136 millions, which is higher than the previous quarters this year, as the medical expansion in Hungary for the new project has started, and we are paying out money for that equipment. For the full year 2024, we expect around 700 millions in capex. Adjusted earnings per share rose to 0.61 sec compared to 0.48 in the quarter. Return on capital employed increased to 11.5% as a combination of the improved profitability and a more slim balance sheet.