Nordrest Holding AB (publ)

Good morning. Tomas Dahlstedt is here. I am the CEO of Nordrestkoncernen and co-founder. I started this company ten years ago. A few months ago, we were listed on Nasdaq.

My name is Mattias Huckell, CEO of the company. I'm also here for today's presentation. It's going to be fun. This will be our first presentation, so please join us.

And the agenda we have is, we are going to talk a little bit about Nordwest again, because some of you have probably not heard, and it will take a few minutes. And then we will go through the quarter and the period. And then there is the opportunity to ask questions for about 10 minutes if you are interested, and you do so in the chat. Vi kommer inte svara på några frågor under själva presentationen utan vi drar igenom den först och sen efter vi är klara så kommer vi att plocka ut de frågor som har kommit in och förhoppningsvis så hinner vi med allihopa. Gör vi inte det så försöker vi välja ut de som är krispigast och där vi har möjlighet att svara. Vi kommer inte kunna svara på alla frågor förmodligen heller. But if we start with Nordest, it is a company that was founded about 10 years ago through a number of acquisitions. After that, we have grown incredibly much over 10 years. From roughly zero to, when we now noted, we were at 1.8 billion for the year 2023. We work within food service and our business is mainly based in Sweden in the current situation. But we have plans, which we also communicated in connection with the ICOs, to grow outside of Sweden and then especially the Nordic countries, Norway, Denmark and Finland. We have a business model that is systematic entrepreneurship, which I will talk a little more about. And we work very much in a value-driven way, where we have three values. Spread joy, surprise positively, and be accessible. So if we communicate to our staff and talk to them in general, every day, and that is what I would like to claim makes the difference in everyday life, and that is why we have such a high customer inflow of new contracts in our business, because we are good at delivering systematic entrepreneurship and living as we learn in the form of our values. If you look at the breadth of what we do, then we have a slightly larger breadth than what many of our competitors have, and we work with school food, older food, patient food, personal restaurants, model simpler personal restaurants, model more qualified. We are in Arlanda, we work against the defense forces. We have been in Sälen, among other hotels. We have a hotel that we run in Ulriksdal, in some parts of Stockholm. And we have also been in business for more than a year and a half, since we acquired Dinners Vägerestaurant. Overall, we would like to say that we are very uncomfortable with the fact that we have a wide sales mix and we managed to actually get through Covid with black numbers, although it was in some parts incredibly tough. I forgot to mention campus, which are universities and universities. From one month to another, from April 2019 to April 2020, we went from 18.5 million in revenue to 457,000. So it was of course a tough time. But we made it through Covid. We had plans to register for the stock market, I can also mention. Before Covid, we had planned for June 2020, but because Covid came and it was so difficult to predict our industry, we interrupted that notation. We are very happy and proud to have succeeded in noting this during May 23. Kollar vi på kärnan i det som är Nordwest och där vi tycker att vi sticker ut mot våra konkurrenter och definierar oss så är det ett antal saker. Den ena är affärsidén och det är att leverera eller tillhandahålla en schysst måltidsupplevelse. Och där trycker vi på då att We work with good quality, and good quality for us is a little bit of an uptick. It's also a level. We usually say that we are a 4 on a 5 degree scale. We don't want to be a 5, because that's usually not what the customers want to pay for. And we want to be a little bit better than average, so not a 3. And there we have defined ourselves with good quality. The other part of that is the meal experience. We do not deliver food, we deliver experiences. And there we emphasize that we work with meal environments, we work naturally with food, and we work with service. And sustainability has also been and will be the second M. We have a model called MSM. Environment, which is then divided into two parts, service and meal time. Det tycker vi att vi särskiljer oss lite granna mot våra konkurrenter. Det är naturligtvis så att många av våra konkurrenter jobbar med det här också. Men det är viktigt för oss för att få totalupplevelsen. För en person som går på restaurang, lite då som annan så vet man om att det inte spelar någon roll hur god maten har varit, om det är dålig service eller att det luktar illa eller luktar toalett på restaurangen. Å andra sidan kan man förhöja måltidsupplevelsen eller maten som sådan genom att man har bra service och En trevlig måltidsmiljö. Och i det så är ju då våra värderingar väldigt viktigt. Som jag sa, sprida glädje, överraska positivt och vara tillgänglig. The second part is the business model, and there we build the model on systematic entrepreneurship. And what is systematic entrepreneurship? It is to have what you must have. When we make agreements, for example with Volvo or Ericsson, you have a purchasing department that has a manual on what is required of a supplier, and you have to check that in all boxes. For example, GDPR policy, IT policy, quality management system, environmental management system, and so on. It sounds quite boring, but it is not necessary. What we do, and where we think we are particularly different from the big competitors, is that we have an entrepreneurial spirit in the business. We have strong union leaders who run the restaurants, almost as if they were their own, but with the problem that they have to relate to the systematization. But we put very little into the daily operations, and we have a very large mandate to develop and run the business. And above all, listen to the customer and the guests and adapt to the offer. Which means that we have a high customer and guest satisfaction. If we look at the strategy we have, it is that we work towards natural guest flows. I have a slide that explains a little more what natural guest flows are. But it's about having natural customer flows where we don't have to invest in attracting guests to our restaurant. You are at a workplace, or you are a patient, or you are a soldier. But it may not be an evening restaurant in the middle of the city, in a city where we then get to invest every day in actually doing such a performance that the guests come. And it is very difficult to predict how many guests you will have from one day to another. Here we have tried to describe, this is with the prospect also for those who want to read a little more. Men vi jobbar mot sex stycken kundgrupper. Försvar då är ju anställd, både civil och officerare, men vänpliktig personal. Och där sitter vi ju då på långa serviceavtal för driften av militärrestauranger. Och vi har ett ramavtal med NATO där vi levererar en produkt som heter MRE. Vi har företag och det kan vara antingen i form av att man har ett avtal direkt med företaget eller att man är i en campusmiljö motsvarande business park där vi till exempel befinner oss i sådana business park. Så precis på samma sätt som om man hade haft ett avtal, för det finns inga garantier idag mot ett företag hur många ätande som kommer. Det finns några fåtal sådana kontrakt som vi har men överlag så bygger det på en egen risk. And either you have a long service contract or you have a rental contract. And then you also have a property protection, which gives a protection in the long term of the business. We have students. We are now on 11 campuses. And there we are often with long-term rental contracts and it is based on that the students actually come to the university and the universities. Det gick ju ner lite efter covid här mot innan, men det är fortfarande så att, och som när vi har varit på investerarpresentationer här, att man åkte ut till universitetet för man hade sina kompisar där och man kollade på respektive. De här människorna vill ju socialisera. Och det är en hel del undervisning som faktiskt pågår numera igen efter covidet. If we look at students, it's very simple. It's the number of students at a school, times school days. And there we sit on a framework agreement with several large school companies. Hospital and elderly care, it's mainly patients who are the base volume. And it builds on the number of care places, easy to predict. And then on it you have the number of visitors and employees. And it's like any personal restaurant, any open restaurant. In the main lunch. And on the road we have the MTR X-affair. We have Arlanda, which we are currently growing on, and we will open another one after the summer. It's a bit too busy, the whole marketplace in Arlanda, but it's on the way. And then we have acquired Dinners Vägrestauranger. We made the final acquisition here during the spring of 2024. If we look at our financial goals in the medium-long term, we want to have an organic growth that is more than 10%. If we look at it historically, it is quite defensive. But it was important for us, together with the budget, to not promise more than what we can hold. Until then, a part of the acquisition will take place, but it will be a small bonus in the context. The EBITDA level should be between 8-10% and it fluctuates a little between the quarters and that's why we think it's good to have an interval. But we feel safe with that. We will have a division of 50% of possible issuable funds and we will have a debt that is lower than two times the EBITDA. Mattias, now it's your turn.

You have a few highlights left. Yes, I have.

I can see that now. Well, highlights during the quarter and the period that is from the change of year. We have succeeded with the stock market, we think. We went out as number two of listed companies during this year. It would have been a little quiet on the market, so we are very happy. And we think that the course that We landed on it right after the first day. It was a reasonable course related to what figures we had to show. So we are very pleased with it. We can see that we are increasing the turnover in the main part of our customer groups during the second quarter. And during the period we have increased in all customer groups. Vi har ett bra momentum just nu. En av anledningarna till varför vi börsnoterar var ju för att få mer massmedial uppmärksamhet kring oss. I många av de möten som vi hade i samband med noteringen så visste ju ingen vilka Nordrest var som omsatte 1,8 miljarder men alla visste vilka Dinners vägrestaurangen var som omsatte 60 miljoner. Så det var ju lite paradoxalt. Men vi ser ju här nu att vi har fått upp en större medvetenhet om koncernen som sådan och vi får ett antal förfrågningar i och med detta. If we look at the second quarter, all customer groups without defense have increased by an average of 24%, which we are very pleased with. We can also comment that defense has a negative growth during the quarter, although not during the period. But it is also the case that part of it, which is Meals Ready to Eat, is based on ordering in this NATO portal. It is neither seasonal, but it can fluctuate. It is a bit unfortunate to see it in a single quarter, but you need to see it over a longer period of time, like a year. And we can see that in that part of the NSB agreement, first of all, we communicated in connection with the note that we have received another land number 10. And it is a relatively large customer. They have not yet started to place any orders and this is due to the fact that they have storage of their previous supplier that they now need to empty out. But with the order that will come, we feel safe. And we have also communicated that we will have more than 10% in all customer groups, but not specifically more or less than anywhere else, but we feel safe with that. And the second is that our largest customer in the MRE business, we judge, it is difficult to say because there is a lot of secrecy about this, will only buy from us here in the future. And then during the second quarter, customer groups traveled and opened another dinner in Mellerud. Now it was your turn, Dramatik.

Ja, du har en sida kvar innan jag tar vid.

Vi kommunicerade i pressmeddelande att vi har fått en order från ett enskilt land från 2025 på 12,9 miljoner euro. Vi jobbar med intrimning av driften av två enheter på Arlanda. Det är ju så att vi har negativt resultat inledningsvis på enheterna. Det påverkar då andra kvartalet. We have terminated a couple of rental contracts. We haven't had any business at all, so we have a lot of costs that we don't have to deal with during the quarter three and four for this year. And then our own capital has increased to 6 million kronor in relation to new emissions.

So, then it's time for me to continue. Let's talk a little bit about the financial. In this picture you can see the summary of the quarter and the period. The net turnover is around 475 million, compared to last year's quarter of 447 million. This means that we had a net turnover of 6.2% compared to 56.5%. The reason for the high net turnover last year has to do with what Thomas was talking about. It was measured against 2022, which was still strongly affected by Covid. EBITDA for the quarter increased by 42 million, an increase compared to 38 million. This means that the margin increased to 8.9% compared to last year's quarter, 8.5%. If we look at the period, we have reached 960 million compared to 852 million. And net turnover means 12.6% compared to 82%, and it's the same thing here, that 82% is driven by the fact that 2022 was affected by Covid. EBITDA increased to 8 million, also an increase of 70 million, and the EBITDA margin was also increased during the entire period, and fell to 8.4% compared to 8.2%. In relation to debt, we have a debt ratio that has gone up to minus 0.5 times. And the reason it's negative is because we have negative net debt. We have a bigger cash than debt, which makes it negative. So we have enough space to raise debt if we need it. We also have a strong operating cash generation, which has gone up to 104.3 percent last June. Den här bilden visar då lite grann det vi har pratat om, det vill säga i kvartalet till vänster och i perioden till höger. Som jag nämnde så gjorde vi i kvartalet en omsättningsdräks på 6,2%, varav då 5,1% var organiskt på kvartalet. På perioden så gjorde vi då 12,6% som jag nämnde, varav 11,1% var organiskt. Det mesta är organiskt helt enkelt. What affects primarily is dinners, which we have consolidated since May 2023. It affects almost the entire difference in both the quarter and the period. If you look at the EBITDA margin and why it is strengthened, we started up a lot of businesses in 2023. And as Thomas mentioned, we often have a lot of costs that we then effectively remove over time. So that has made that we have strengthened the margin. Yes, we can move on. Then we have the next picture that shows that we had growth in all customer groups during the entire period. With 12.6%, which is very fun, as Thomas was talking about. I can mention a few customers down here that we open up for example in 2023. For example, Pocket SkyCity. It opened in February 2023. It's a dining hall. It's located in Södermalm, Sundbyberg. We also won the Ericsson contract for three Ericsson universities. We've also won the Swedish Defence School. We've won schools. We've won the St. Bellman. In 2024, as Tomas mentioned, we've opened up La Giraffe in Arlanda. Café Vajaykapp is also located in Arlanda. We've also opened up Stockholm Hospital. in March. So a lot is happening. We feel that it's a fun momentum.

And as I was talking about earlier, for the period, there is a little growth in defense. And it is primarily the MRF that the orders are a little uncyclic around. And as I said, at the same time we have communicated that towards 2025, then we have big orders on the way in and we assess, as I said, that the midterm goal at more than 10% in all customer groups will grow in line with what we have communicated. So we don't feel particularly uncomfortable with that.

Good. We can also just go through some important key points related to balancing and casting flows. If we talk about the need for moving capital, we have a low need for moving capital. This has to do with the fact that we have part of direct sales to consumers. We also bind a very small warehouse. We order one day and mostly produce and serve the guest more or less the same day. We say that we will be at about plus or minus 1% of the net turnover and the start of June in 2024 we were at minus 0.4%. If we look at CapEx, we also have a low need for CapEx. We make a lot of large investments. Traditionally, we go straight in with the customer who stands for kitchen and premises. It is a little different from the activities that Thomas described at Arlanda airport. There we have been able to build and invest from the bottom of the restaurants and kitchens, but it is not the usual. But that is also what makes us a little higher at the beginning of June 2024. That means that we will normally be at around 1% in the percentage of net turnover on the rolling 12. The low capital needs and investment needs lead to few capital gains. We say that we will be at around 90% over time. We were done with the presentation. We had some questions. Yes. I'll open it up. I'll ask the questions, Thomas, and then we'll go straight up and down, if that's okay? Absolutely. A question that I think you've answered, but I don't know if we can answer it anyway. Defense is down by about 15% in sales. Is it MRE, within the defense group, or other defense businesses?

We don't want to show the income streams either, but as I said, we know that there is a lot of fluctuation in our income in the MRE business. So with that said, that's how deep I want to answer the question. So there is a lot of fluctuation in the MRE business. And just to comment on defense in general, about 10% of defense grows in Sweden towards 2035. And it's not just about Sweden, it's about the whole of Europe.

Another question that has come in is about the seasonal version of the business. Om det påverkar, frågan var, förra året gjorde ni runt 163 miljoner i vita, var det 69 första halvåret och 93 miljoner i andra halvåret. Är det så det brukar? It looks like the second half of the year is stronger.

Yes, we don't have any specific season definition, at least not budgeting. Then the outcome can be completely different. It can, for example, be about practice activities in the defence force, but also the order laying in the Marie-affair. Connected to school activities, depending on when the law is in place and so on. We know that the post law for 2025 will be very late. So that affects the business. But a little stronger, I would say, is that period two is a period one.

I have a question. You mentioned that your biggest customer will buy from you in the future. It's a very qualified guess, and also linked to the fact that we feel safe with the midterm goal of more than 10%. There is another question about the MRE business, and the question is about the same profitability profile that we have had historically, and will the order come from a new or existing customer?

Again, with the thought of a lot of security, we can't really... No, but the profitability profile, we haven't said, if we comment on it, then we are roughly on what we judge that we should be on the MRE business.

And all in all, we would put about 8-10% in the bit. Satsning på Arlanda är fortfarande uppstått fasen. När tror ni att satsningen når mogen lönsamhet?

Jag skulle gissa att det kommer att vara någonstans kring årsskiftet. Det finns en liten utmaning med Arlanda just nu. Det är ju att hela byggnationen i sig är fördröjd också. Vilket gör att det är en byggarbetsplats. Den frågan måste vi adressera mot Svedavia naturligtvis. Som gör också att det är lite... tougher än vad det borde varit. Men när vi kollar på projektet som sådan så ser jag att någon gång när vi börjar närma oss december så har vi nått en mogen lönsamhet i det verksamhetet.

The last question is about MRE prices. Given that the revenue of a good deal is fluctuating with the quarter, can you expect an increase in sales from Q2 2024 to Q3 2024? That's hard to say, because it's not an even year, but it's fluctuating.

I would say that you can expect a reduction in sales over the mid-term period. And as I said, more than 10% in every business that we operate. So just that it falls under Q3, that can happen. But maybe... Q4 also. We will see. Our lead times are about one month from order to delivery. Let's see if we have any more questions here that we can take. Yes, there is. If we had some bigger contract profits during the quarter, contract profits, I assume that we would have won some bigger contracts. And then it is so that there is an official contract that we have won, which is signed, so that we can choose to communicate this. And it is that we have taken the Natural History Museum as a question mark, and it is also official information, to convert 20 million this year.

Thank you. I'm going to scroll through a little bit to see what I've covered the most. There's a question here as well. Why don't we revise segments more? For example, MRE, Altningsaffären.

We've communicated that a number of times in connection with both the prospect and the notation. First of all, it's not a self-evident segment division for us. It doesn't fit together as we see it in our business. We have done an analysis on this in connection with the notation. If you were to do a segment division, it would look completely different, I would say. And in that, we would also be very transparent in certain individual businesses, which also means that our competitors would have the opportunity to be able to count backwards and maybe take them. And that would not benefit you as a shareholder and not me as neither the founder nor the largest shareholder. So it is of no interest to be too transparent.

Another question that has come in, Thomas, is how has Q3-24 started?

Yes, we don't leave that kind of information. I understand that you would like to know, but we don't leave it. We are stuck with our midterm goals.

Exactly, we don't leave any future forecasts. Let's see here if we possibly have any more questions here. I think we have...

Yes, but we can talk about the market situation. We have received a question about the market situation and how we are able to continue to win new contracts. We feel very strong. We feel that we have positioned ourselves. And if we were unknown before, even though we are not known now, we are much more known than we were before. And we get a lot of positive things about the fact that we have now become a noted company. If you look at the market overall, we have made the assessment that or not just us, but Pareto helped us with that, that the market itself was worth about 230 billion, the addresses were about half, maybe a little less, around 100 billion. In Sweden, we converted 1.8 in 2023, so we see that we still have a lot of volume left to take, and we don't feel particularly upset about... Thank you, Thomas. I don't think we have so many questions. No, we don't have any questions.

I think we've summed it up.

We have received some questions about prognosis and expectations. We don't leave any prognosis or expectations for the future, more than our mitohormones.

That's good. Now the time is roughly 9.30 and I haven't seen... I have a quick question that came in that we can quickly answer. It's a question about what is included in interest-bearing debts. And in general, one can say that we don't have any loans in that way, but most of our interest-bearing debts are tax returns since the covid period, where you then And then we have amortized quite a lot of them, I don't know how much we have today. We have about 56 million left on them, but in general we have Yes, there is a factoring and a security claim, but in general we don't have that.

And we could actually cash in all of them if we wanted, but we don't want that because it's relatively cheap loans and also gives the possibility for continued growth and not having to sit with a lot of loans at the bank. Yes, but that's good.

I think we're done. Thank you so much, Thomas. Thank you. Nice to be here today. I hope everyone is happy. I don't see any questions, so we choose to end the presentation here. Have a good day.